The tourist boom has got Hong Kong's retailers smiling again and the prospects for 2005 look better than ever
Ask any tourist to name three reasons for their visit to Hong Kong and you can guarantee the word "shopping" will be mentioned within the next ten seconds! There may be rumours circulating lately about some form of sales tax, but in the meantime, Hong Kong is maintaining its reputation as a shopper's paradise, with a vast array of quality goods and international brands attracting first-time tourists from the mainland and repeat visitors from throughout the region.
The impact of tourism on overall retail sales is enormous. According to the Hong Kong Tourism Board, a single event-the Hong Kong Shopping Festival held from late June to August-successfully attracted over four million visitors who spent at least HK$1.5 billion in local stores and restaurants.
Statistics show that much of this is attributable to the increase in mainland visitors. Almost 60 percent of inbound tourists in the first eight months of the year were from China, with a significant proportion taking advantage of the Individual Visitor Scheme.
Local retailers are only too aware of the opportunities that this presents. Gold jewellery is on the shopping lists of many mainlanders and one major jewellery retail chain reckons that Chinese tourists account on average for 30 percent of their total revenue. "At individual stores in tourist districts, it is even higher at well over 50 percent," says Sallus Wong, corporate manager of Chow Sang Sang Group.
"We used to think of mainland visitors as being rather price-sensitive," continues Ms Wong, "but they are now more conscious of quality. Most are looking for distinctive, high-quality products that they are unable to find at home." Instead of just buying pure gold items, such visitors are also snapping up well-crafted diamond and 24-carat gold jewellery of stylish designs, and this trend is confidently expected to continue.
Meanwhile, Eu Yan Sang and Fortress, retail chains respectively for Chinese medicine and personal electronics and home appliances, believe that mainland tourists will play an even bigger role in driving renewed business growth in the coming months.
"Such customers are very clear about what they want," says Teresa Pang, public relations manager at Fortress. "They ask for specific new models of digital cameras, mobile phones, MP3 players, PDAs and notebook computers." Their main reasons for being keen to shop in Hong Kong, Ms Pang explains, are the customer service standards of local retailers and the knowledge that genuine product guarantees are provided.
Noting similar factors, Alice Wong, managing director of Eu Yan Sang, points out that her company's most popular products among mainland tourists are their flagship Chinese medicines for women and babies. If bought in China as imported goods, they sell at much higher prices.
Retailers are responding to these changes in a variety of ways. They keep larger stocks of the products most popular with mainlanders and assign salespeople with knowledge of Mandarin and other Chinese dialects to shops located in tourist districts. Besides that, much greater emphasis is being placed on staff training and demonstrating greater courtesy towards both local and overseas customers.
In fact, many retailers have set themselves the target of offering a new level of shopping experience. Fortress, for example, has recently introduced several value-added services. These include photo printing, MP3 downloads and wireless Internet connection, all of which allow customers to use the products they have just bought straightaway. "The new brand strategy, which we call 'inspiring smart living', is to provide the latest models and innovative services that inspire customers to better utilise the products they buy and really get the most out of them," says Ms Pang.
With next year's opening of Hong Kong Disneyland and the Beijing Olympic Games in 2008, tourism within the region should continue to boom. As retailers open more stores and strengthen their frontline sales teams, more jobs will undoubtedly be created. Eu Yan Sang already has plans for two more outlets by the end of December and Chow Sang Sang is recruiting staff for a new flagship store in Tsim Sha Tsui and one in Disneyland. In order to prepare thoroughly, Ms Wong says they will take longer to select and train staff to make them familiar with the work and culture of both the theme park and their own company.
Within the retail sector generally, it is expected that candidates should be pleasant, proactive and proficient in Cantonese, English and Putonghua. Relevant sales experience is an advantage but attitude is the most important thing. "Applicants must have a passion to serve, no matter who the customer is," notes Ms Pang.
Training in up-to-date product knowledge is obviously critical. The focus for each chain is on the functions and features of all products and is supplemented by courses in general sales skills. Eu Yan Sang, in particular, goes even further. It has a detailed course in Chinese medicine consisting of seven modules and lasting for two and a half years. Frontline staff must pass the related examinations before getting promoted and shop managers are usually registered Chinese medicine practitioners. With such comprehensive training, salespeople have a clear career path leading to senior management positions and opportunities to grow with the company.
Power of the tourist dollar
- Tourist spending has done much to revive Hong Kong's
- Visitors are looking for quality products and expect high
- Recruits for sales positions need good language skills
and a passion to serve
- Prospects for retail growth and new store openings in
2005 look good