Thank you, mainland tourists!

August 15, 2011 / By

As the mother of a four-year old, there were days when I worried about not being able to purchase the right milk powder for my daughter, losing out to tourists from Mainland China who help to empty the shelves in pharmacies and supermarkets. Yet, as a Hong Kong resident and a real estate practitioner, I should say a big “thank you” to these visitors as their spending is one of the key drivers of Hong Kong’s retail sales and the growth in demand for shop space.

Statistics for 2010 show that overnight visitor spending on shopping accounted for about one-quarter of the HKD 325 billion earned from retail sales in Hong Kong for the year. Interestingly, overnight visitors spent HKD 19.8 billion on garments/fabrics last year, accounting for some 55% of Hong Kong’s total retail sales of apparel over the period. The majority of this spending (close to 70%) was by Mainland Chinese tourists. This gives a good sense as to why fashion retailers from all over the world are rushing to establish an operation in Hong Kong and tap this phenomenal market. They are also, of course, eyeing the chance to enter the Mainland market. Given this, Hong Kong is the ideal launching pad for these retailers, offering them not only the chance to earn revenue, but also to test the market and learn about Chinese shopping culture before crossing the border.

It is no longer headline news that Mainland Chinese tourists flood into Hong Kong every day, queuing up for Louis Vuitton bags and Rolex watches. However, their expenditure not only drives up the value and volume of total retail sales, but also their high per capita spending is amazing. Last year, every overnight tourist from Mainland China spent an average of close to HKD 5,500 on shopping in Hong Kong, more than 30% more than the average for all tourists. Although spending patterns are not directly comparable, Mainland Chinese tourists’ per capita spending on shopping was even higher than the HKD 5,047 spent on retail goods and services by local Hong Kong households each month. No wonder why retailers are putting so much effort into catering to the needs of Mainland Chinese tourists these days. Once again, thank you Mainlanders!


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