Hong Kong cosmetics chain blames drop in Chinese tourists for declining profits

As Chinese people are changing their tourism patterns towards more exotic destinations instead of going to the special administrative regions of Hong Kong and Macau, retailers in Hong Kong are seeing declining profits and lower numbers of mainland Chinese customers. The Hong Kong cosmetics chain SaSa saw its half-year net profit drop by 55%, mainly blaming decreasing numbers of mainland Chinese customers and a strong Hong Kong dollar for the result.

Hong Kong remains the number one destination for mainland Chinese tourists, but has lately seen the arrival numbers decrease month-by-month as Chinese tourists are starting to explore more exotic destinations further away.

Despite the recent decline in mainland Chinese tourist arrivals to Hong Kong, the group still represent 77% of all tourists visiting Hong Kong and has been the main driver behind retail spending in the city, with luxury shopping being one of the main draws for mainland Chinese visitors to Hong Kong. As COTRI has previously reported, Chinese customers prefer shopping abroad, and although tax-free shopping in Hong Kong is still an attractive option, other destinations such as Japan are actively competing for Chinese tourist shopping expenditures with an increasing number of product categories being tax-exempt and more services that cater specifically to Chinese customers.

COTRI provides expert insights into the worldwide developments of China’s outbound tourism market. As Chinese outbound tourists are travelling to a large range of destinations, our publications cover a number of different regions. Important Chinese visitor activities are analysed, and detailed insights are presented.

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Source: Reuters

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