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Farewell and good buy, say shoppers

Adelaide, 10 January 2024: The TARDIS, any science fiction fan will tell you, is the time machine in the long-running TV series Dr Who which enables the eponymous hero to flit between centuries while carrying out good deeds. Outwardly small – it is disguised as a police box, an obsolete type of telephone kiosk once commonly seen on streets in Britain – the TARDIS is famously “bigger on the inside”, its interior being a whole separate dimension containing an infinite number of rooms and corridors.

Hong Kong’s space-constrained flats seemingly have similar qualities. How else to explain the way entire families can co-exist in cramped conditions, each going about their own activities and still finding room for personal belongings? Patience, tolerance and pragmatism are paramount.

Such virtues are being tested, however, by citizens’ latest craze for bulk-buying shopping tours to Shenzhen, a short hop across the Mainland border. It’s one thing to purchase large volumes of consumer items, but where to keep them? Such problems don’t seem to concern bargain hunters who are signing up in droves for these tours, with multiple travel operators struggling to cope with demand.

The chief beneficiary is Sam’s Club, a membership-only chain of warehouse stores owned by US supermarket giant Walmart. The first Sam’s Club opened in China in 1996. The brand now has 44 shops in 25 cities across the country, including four in Shenzhen. Hongkongers love it for being spacious and packed with low-priced products. Competition is coming, however. US warehouse retailer Costco Wholesale is opening a new store in the city’s Longhua district this Friday.

What’s the appeal? Lower prices, the weaker yuan and the widespread use of electronic wallets by Mainland merchants, according to marketing professor Mandy Hu, who adds: “Superstores save consumers’ search and travel costs, making them a valuable option.” But the chances of Hong Kong following suit are slim. Professor Hu points to the high real estate and logistics costs in our city, plus residents’ limited storage space. Costco’s Mainland GM Prudence Jang confirms it has looked at opening in the city but can’t find a suitable location.

The trend of citizens heading north to shop may well continue, given that it’s not only seniors eyeing a bargain. “There were more older tourists before the pandemic but now many young people have heard there are places to visit in Shenzhen and the prices, transportation, public security and sanitation are all good there,” confirms Steve Huen of tour operator EGL Tours, which has Sam’s Club shopping trips fully booked until early next month.

Retailers in our city are counting the cost. The Hong Kong Brands and Products Expo in Victoria Park has just hosted 400 exhibitors and 900 booths offering big discounts on food, home appliances and health supplements. While event organiser Allen Shi reports “the overall vibe is good and business went pretty well”, some are less sure. Food vendor Kelvin Lee says residents heading out of town “had an impact” on falling sales while dried seafood merchant Amy Cheung remarks: “You can’t help but think people are travelling north instead.”

Perhaps the prospect of border congestion will deter would-be shoppers. Hong Kong officials insist they have “learned a lesson” and will implement measures to avoid a repeat of the transport chaos that left thousands of travellers – in this instance, Mainland residents who had visited our city for the New Year fireworks – stranded for hours. Some 26,000 souls attempted to return home through the Lok Ma Chau control point soon after the display, causing a huge traffic bottleneck. Chief Secretary Eric Chan has promised talks with his Mainland counterparts to extend operating hours at railway checkpoints and increase the number of 24-hour border crossings. Government officials caught unawares? New year, old problems.

Thankfully, there are no such travel hold-ups for your correspondent, who has just arrived in Adelaide and is looking forward to a birthday lunch with friends tomorrow in the nearby Barossa Valley which, as luck would have it, is a notable wine-producing region. Someone else who enjoys globe-trotting is corporate lawyer Ramesh Vaidyanathan, my latest guest on Law & More. Ramesh talks about practising law in his native India, the country’s growing status as a world economic power and his role as President of Ally Law. It’s a fascinating chat, please listen.

Ramesh last visited Hong Kong four years ago and is promising to return soon. Good, we need more like him. Immigration Department figures show Hongkongers took more than 1.05 million trips out of the city from 24-26 December, but visitors – including mainland tourists – made just 360,000 trips into Hong Kong in that time, 18% down on the same period in 2018. Former Chief Executive CY Leung, now a Vice-Chairman of the Chinese People’s Political Consultative Conference, is unimpressed, accusing tourism chiefs of being too passive. They are acting “like a princess who lacks no suitors”, he fumes, whereas mainland cities are aggressively wooing visitors.

Lawmaker Peter Shiu, who represents the retail sector, says local businesses must accept the “new norm” of losing patrons to membership stores in Shenzhen but, like our former leader, wants more effort put into enticing Mainland visitors, insisting: “This is an issue that needs to be dealt with as soon as possible.”

There are even sterner words from his Legislative Council colleague Doreen Kong, who believes tourism chiefs are “resting on their laurels” and “relying on the model of the 1970s”. How to drag them into the present day? Clearly, we need a TARDIS.

Until next time, everybody!

Colin Cohen
Senior Partner
Boase Cohen & Collins

38+ years of legal experience is just a click away.

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