Cross-border shopping exodus expected
Updated: 2013-05-15 01:09
By Gao Changxin in Hong Kong and Yu Ran in Shanghai (China Daily)
Shoppers from the Chinese mainland flock to stores in Hong Kong for bargains. Mainland consumers are increasingly traveling to the special administrative region as the yuan continues to appreciate. LI PENG / XINHUA
Emboldened by a strong yuan, already high-spending mainland shoppers are heading to Hong Kong - to shop even more.
Flying to the special administrative region during holidays and emptying the shelves there has become a ritual for many mainlanders.
But in recent months, the deals on offer have started to look even more attractive.
According to figures from the Hong Kong government, during the first three months of the year, retail sales rose by 6.5 percent, seasonally adjusted, from the previous quarter.
During the three-day May Day holiday, from April 29 to May 1, about 400,000 mainlanders flocked to Hong Kong, a 50 percent increase from the same period last year, according to the Hong Kong Tourism Board.
Cosmetics retailing chain Sa Sa International Holdings, which has around 80 stores in Hong Kong, said its like-for-like store sales grew 17 percent during the three-day period.
"With the help of a continued growth in mainland tourist arrivals during the May Day holiday, the group's retail sales in Hong Kong and Macao rose approximately 25 percent during the three-day holiday," said Simon Kwok, its chairman and chief executive officer.
Vincent Chow, chairman of Chow Sang Sang, one of Hong Kong's biggest jewelry retailers, also said it enjoyed a double-digit increase in sales.
And as media pictures showing long lines outside stores in some of its most popular shopping areas testified, the Chinese Gold & Silver Exchange Society reported a 50 percent surge in gold sales during the holiday period.
The continued strength of the yuan has played a major part in the Hong Kong shopping boom.
The Chinese currency has been gradually gaining on the US dollar, supported by a flow of "hot money" into the country, said analysts.
Last Wednesday, the official daily reference rate for the yuan passed 6.2 against the dollar for the first time since the Chinese government unified its official and market exchange rates at the end of 1993. It closed at 6.1410.
And as the Hong Kong dollar is pegged to the US dollar, the yuan is also breaking records against the currency.On Wednesday, the yuan powered through the 0.8 threshold, ending at a record 0.7986.
Jing Ulrich, chairwoman of Global Markets of JP Morgan Securities (Asia Pacific) Ltd, said she thinks the yuan could appreciate another 1 to 2 percent against the greenback by the end of the year.
"Overall, the yuan is stable, but a strong yuan hurts the Chinese economy," said Ulrich.
Liu Binyu, a 26-year-old white-collar worker from Shanghai, said she is going to Hong Kong next week for her second shopping trip of this year, based on the continued appreciation of the yuan.
Her list includes cosmetic products, bags and clothes. She was in Hong Kong during Spring Festival, and plans to go back again in August.
"Purchasing those branded goods in Hong Kong will save money, and the appreciation of the yuan is making these kinds of items even cheaper," said Liu.
Lei Yan, who is in charge of outbound tourists to Hong Kong region at China International Travel Service in Shanghai, said that as the traditional off-peak season for tourism comes to an end, the appreciation of the yuan will definitely increase the number of travelers heading for Hong Kong for short shopping trips during the summer.