iPad for 13 US cents: Hong Kong mall operators pull all stops to attract local consumers amid weak spending
- Many of Hong Kong’s mall operators are offering eye-catching promotions of up to 90 per cent off
- Such promotions are better for generating revenue for both landlords and retailers than rental relief: Cushman
If you’re interested in getting an iPad for HK$1 (13 US cents), look no further than East Point City shopping centre in Hong Kong’s Tseung Kwan O district. The catch? Shoppers must have spent HK$50,000 at any of the mall’s stores to get the offer, which is valid until Wednesday.
Many of Hong Kong’s mall operators are offering eye-catching promotions of up to 90 per cent off, in their latest bid to aid tenants by drumming up sales amid a worsening economic outlook.
“Retailers are facing a life-or-death moment,” Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, said in a letter last week addressed to Hong Kong leader Carrie Lam Cheng Yuet-ngor.
The campaigns, ranging from steep discounts on electronics to just HK$1 for Boston abalone, are aimed at boosting spending over the next few weeks, as shoppers cautiously return amid easing social distancing measures.
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Analysts said that with the latest offers, developers and retailers were trying to tap into local consumer spending, with tourism all but halted.
Such large-scale promotions were rare before, said Waldemar Jap, consumer market deals lead partner at PwC (Hong Kong). And they might not be enough, particularly in sectors such as luxury goods and beauty and care products. “If you look at the high-end luxury spending category, the local spending will not be enough to overcome the shortfall in tourists,” Jap said. “The new normal is we have to accept that there’s less foot traffic.”
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As its latest response, Sun Hung Kai Properties (SHKP), the city’s largest property developer, is offering a range of discounts at its malls. At Mikiki Mall in San Po Kong, for instance, shoppers who live and work in the area can get a HK$50 food voucher for every HK$50 spent at the mall. APM mall in Kwun Tong is offering a HK$300 voucher for athletic wear on purchases totalling HK$500 or more. The developer, which operates 21 malls, said last month its shopping centres were launching promotions from now until the end of June “to help stores return to normal operations”.
SHKP said it was seeing positive signs. “We have seen a marked increase in footfall and revenue in many of our malls,” a spokesperson said.
Swire Properties’ CityGate Outlets, located in the city’s Tung Chung district, is offering as much as 90 per cent off on apparel and household goods.
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The promotions come on the heels of other measures that developers have taken to try and save the retail sector – SHKP slashed rent at its malls by as much as 50 per cent in February.
The discounts and deals will function as short-term relief, said Cushman’s Lam. Landlords will be hopeful that travel restrictions will ease in the next six to nine months, allowing tourists to return and spending to recover.
Even if that were the case, retailers may have some thinking to do as far as their longer-term operations are concerned, Lam said. “It’s time for people to rethink and rescale themselves to pay for the future at a more sustainable level,” he said.
