“Low rents can be very attractive because they create a level playing field not just for big brands but also local retailers. Tong says that the city’s low uptake to online shopping - online shopping accounts for around 26 percent of total retail purchases made in China versus 8 percent in Hong Kong - has also placed additional pressure on retailers and brands to think outside the box and create more unique shopping experiences for customers. Even prior to the pandemic, the city was experiencing stiff competition from other Asian markets including mainland China, Thailand, and Korea. Looking ahead, different challenges arise, especially if Hong Kong wishes to retain its status as a premier shopping hub in Asia. It allows them to target new customers and sell different items,” says Tong.
“In the past few months we have seen brands forgo the idea of opening permanent spaces in favor of large-scale pop-up stores in districts where they don’t have a presence. They are also aware that what has worked in the past may not work for the future, which is why they need to add some magic to the experience. “Luxury brands are still actively seeking opportunities but need certainty from the government before they can make any concrete decisions. In December 2020, Hermès unveiled a new store on Canton Road that is nearly double the size of its original site. In a recent interview, Dior’s chief executive and chairman Pietro Beccari said that the new flagship, which is due to open later this month, showed the brand’s commitment to its “loyal clientele” and is “optimistic” about the city’s future. Popular luxury brands like Hermès and Dior are among the elite few that have recently seized the opportunity to invest in bigger flagship stores on Tsim Sha Tsui’s Canton Road, which in its heyday was a magnet for Chinese mainland tourists. It comes down to the brand itself and whether they are still resonating with the local customer,” he explains. While it’s true that many luxury brands have consolidated their local retail networks, others have also expanded or opened new flagship locations. “Yes, the luxury market overall isn’t doing well since COVID, but certain brands are still on the up in Hong Kong,” says Oliver Tong, head of retail at property giant Jones Lang LaSalle Hong Kong and Macau.
In just the past few months, brands like Burberry, Valentino, Tiffany & Co., and Coach have shuttered stores in what was once considered prime retail space in the city.Īccording to experts, however, the future isn’t all doom and gloom.