Hong Kong retail recovers with temporary stores and new ideas
Hong Kong’s retail market is recovering from a three-year decline, and it’s partly thanks to new entrants opening temporary stores, according to reports.
Hong Kong is seeing a drop in traditional luxury labels and a rise in the kind of food and beverage, lifestyle and accessory brands that prove popular in a millennial market as China’s middle class grows in size and affluence.
Nigel Smith, MD of Colliers Hong Kong, reportedly told the South China Morning Post: “Local consumption demand is growing, but it’s mainly focused on lifestyle, health, food and beverage sectors, which require smaller size retail shops. A popular format we see around shopping centres is pop-up shops.”
According to CRBE Group, food and beverage retailers made up half of all new retail entrants to the market in 2018.
Lawrence Wan, a senior director at CBRE, told the Post: “New brands can use the pop-up format as a stepping stone into a new market at a comparably lower cost.” This is a way of offering new products and services to a changing market without having to deal with increasingly high rents in the city.
Savills has revised its 2018 forecast for rents in private malls to rise by 5%, when it had previously predicted them to fall by the same amount.
Wan added: “New concept sometimes means uncertainty and risk. Pop-up stores in big shopping malls can give a chance to small operators to test their innovative ideas at a prime location with smaller investment.”
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