Hong Kong’s retail sector is pinning hopes on a recent increase in duty-free shopping quotas for Chinese tourists, aimed at revitalizing the city’s struggling retail landscape. However, reports suggest that despite these efforts, many mainland visitors find prices in the city less appealing compared to the mainland.
Effective from July 1, Chinese tourists entering Hong Kong via six designated land border control points saw their duty-free shopping limit raised from 5,000 yuan ($688) to 15,000 yuan per trip. This measure is set to expand to all border control points starting August 1, with the government projecting an increase in shopping spending between HK$8.8 billion ($1.13 billion) and HK$17.6 billion.
Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, emphasized that while these changes are expected to benefit the retail sector, it will take time to gauge their full impact. The optimism is tempered by recent government data showing an 11.5% decline in May’s retail sales year-on-year, influenced by increased outbound trips and the strength of the local currency.
Harbour City, a prominent shopping destination in Tsim Sha Tsui, expressed optimism that the policy change will drive up retail sales and attract more tourists. However, challenges such as high operational costs and a strong Hong Kong dollar continue to weigh on the industry, as highlighted by Bond Law, an executive director of the association.
Visitors like Hong, 49, and Chen, 43, from Guangxi province, echoed concerns about high costs in Hong Kong, particularly for dining. Despite the allure of tax-free shopping, Chen noted that food prices were significantly higher compared to their hometown.
The evolving visitor profile also reflects changing consumption patterns, with cost-conscious tourists increasingly opting for free walking tours and culinary experiences rather than luxury shopping. Sienna Zheng, 29, from Shenzhen, remarked that while Hong Kong offers tax-free shopping, product prices remain comparable to those on the mainland, affecting purchasing decisions.
As Hong Kong strives to regain its footing in the post-pandemic era, the effectiveness of these measures in revitalizing the retail sector remains contingent upon addressing price competitiveness and adapting to evolving consumer preferences.
