A woman walks past a high end fashion store in the Causeway Bay, the HKSAR on May 23, 2020. (ISAAC LAWRENCE / AFP)
HONG KONG – Consumers’ desire for luxury goods in the Hong Kong Special Administrative Region (HKSAR) and on Chinese mainland is recovering, with the appetite for such goods back to pre-pandemic levels, a new survey says.
According to the survey, released on Wednesday by the global integrated communications consultancy Ruder Finn Asia and Consumer Search Group, 41 percent of the respondents on the mainland and 33 percent of those in the HKSAR said they will spend more on luxury goods in the next 12 months, which will bring spending back close to what it was before the COVID-19 pandemic.
Only 9 percent of mainland respondents said they will spend less on luxury goods, which is basically the same as the 10 percent who said this at the end of 2019. But in the HKSAR, 28 percent of respondents said they will spend less, up from the 20 percent who said this before the pandemic.
Sixty-eight percent of respondents in the HKSAR and on the mainland agreed that the HKSAR is still the luxury hub in Asia, even though mainland consumers have not been able to travel to Hong Kong as easily as before because of the pandemic
The January survey interviewed 2,000 consumers. The 1,500 on the mainland had an average annual household income of 1.43 million yuan (US$224,000), and the 500 in the HKSAR had an average annual household income of HK$1 million (US$129,000).
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Sixty-eight percent of respondents in the HKSAR and on the mainland agreed that the HKSAR is still the luxury hub in Asia, even though mainland consumers have not been able to travel to Hong Kong as easily as before because of the pandemic and compulsory quarantine measures implemented by the city’s government last year.
Asked about possible travel destinations during the next 12 months, 23 percent of mainland respondents chose the HKSAR, which ranked second only to the mainland (43 percent).
The mainland luxury consumer market revived in 2020 because of restrictions on overseas travel. Driven by the development of Hainan province’s open economy, duty-free stores in Hainan are becoming more popular as a major shopping destination for consumers, with Sanya surpassing all second- and third-tier cities to become the fifth-largest luxury shopping city on the mainland.
The other four top shopping sites are the country’s first-tier cities: Beijing, Guangzhou, Shanghai and Shenzhen.
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Although the mainland luxury market has been on a course of rapid growth, with the stabilization of COVID-19 infections and normalization of international travel in the coming years, the part of the domestic luxury consumption growth that is due to border controls is expected to subside, said Gao Ming, senior vice president and managing director at Ruder Finn Group’s Luxury Practice Greater China,
Sanya is more of a complementary duty-free shopping city and will not affect the country’s luxury goods market, as Sanya's annual duty-free limit of just 100,000 yuan is far from enough to satisfy the needs of consumers for luxury goods, Gao added.