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In a recent study conducted among 25 Asian cities, Hong Kong has been rated as the top shopping destination, obtaining a total score of 68.5 out of 100. Closely following it were Kuala Lumpur and Shanghai. Singapore, Hong Kong’s arch rival when it comes to being a shopping hub, was positioned at fifth place. The sky-rocketing hotel prices and the costs of living have together succeeded in establishing Hong Kong as a relatively expensive Asian city to live in.
In terms of consumer spending power and the future growth potential of the economy, the Hong Kong luxury market is booming. Hong Kong locals are expected to spend nearly HK $34,055 on luxury goods in the next few months. In a study conducted by the Boston Consulting Group, Hong Kong’s affluent will annually spend a whopping US $3 trillion by 2020. The luxury segment includes travelling, dining, purchasing luxury goods, and availing the best in services. Hong Kong’s riches will account for 5 percent of total global consumption.
Hong Kong’s hotel stay costs are as expensive as the luxury goods. On an average, a room in a four-star hotel costs $200 per night. In data gathered by the Hong Kong Tourism Board, it has been found that tourists who stop by in the city for just one night, have spent more than HK $50.4 billion on shopping expeditions during the first half of 2012. Tourists from the mainland have indicated the strongest spending capacity, but Hong Kong’s tourism industry wishes to diversify its inflow of investment. With the mainland’s economy slowing down, the Hong Kong tourism industry may take a hit.
However, Chinese goods are in great demand all over the world, and, with domestic stimulus measures being implemented, the Chinese economy will avoid a sharp slowdown. Overseas export demands are improving and there is infrastructure investment occurring; this indicates that the Chinese economy will grow between 7 to 8 percent in the coming few years. While China’s economy is being driven towards fueling consumption, the population of Hong Kong’s affluent is set to double. This will help Hong Kong’s total consumption exceed that of Germany’s and become at par with Japan’s.
The boost in population will trigger luxury spending, causing it to leap from US $40 billion to US $190 billion. Hong Kong’s Causeway Bay is already experiencing fast-rising rents that are exceeding those of New York’s Fifth Avenue. With rising rents, the city’s Tsim Sha Tsui and Central districts are becoming the most expensive rental locations in Asia-Pacific.
People are thronging top retail brands from the likes of Gucci to Louis Vuitton. International fashion goliaths are breaking into the Chinese market through Hong Kong.
Hong Kong’s rapid growth in the luxury market segment has pushed New York’s Fifth Avenue from the top spot; a coveted spot that it held for 11 long years.