(Reuters) — Hong Kong retailers’ sales in January were the lowest since 2003 and revenue growth this year will likely be the slowest in at least four years, hit by a drop in visitors from the mainland who have been put off in part by rising hostility among Hong Kongers.
Fifteen listed Hong Kong retailers with a market value of at least $100 million, including Emperor Watch & Jewellery Ltd , the distributor of brands such as Rolex and Tag Heuer, are forecast to post 7.5 percent growth in combined revenue this fiscal year, according to Thomson Reuters data. That would be the slowest pace in the four years for which comparable data is available.
“Hong Kong for a long time has been the shopping destination of choice for mainland Chinese, but there is a strong backlash and a perception of real negative sentiment toward the mainlanders, turning a lot of mainland Chinese off,” said James Roy of China Market Research Group in Shanghai.
More than 40 million mainland Chinese visited Hong Kong last year, vastly outnumbering the former British colony’s population of 7.2 million, but the pace of growth in arrivals slowed sharply at the start of the year, data show. In early March, mainland Chinese tour groups visiting Hong Kong were only about one-fifth of the levels before mid-February, said Paul Leung, chairman of The Hong Kong Inbound Travel Association. China’s anti-corruption crackdown dampened luxury spending and Chinese tourists are also looking to other destinations, drawn for example to Japan by a weak yen. They have been soured on Hong Kong by rising hostility among local residents, who accuse mainland tourists of driving up prices, clogging traffic and creating a nuisance, while pro-democracy protests stirred up anti-China sentiment.
Cosmetics firm Sa Sa International Holdings Ltd, with a market value of $1.5 billion, and jewelry retailer Luk Fook Holdings International Ltd, which has a market capitalization of $1.7 billion, were among firms included in the Thomson Reuters data.