The retail sector in Hong Kong continues to show no signs of recovery as overall sales keep falling. Hong Kong consumer sentiment and disappearing visitor numbers have led to the 16th consecutive month of declining retail sales.
Recent statistics are a clear indicator, year-on-year, retail sales have dropped 13% and tourism numbers from Mainland China have gone down by 18%. Watches and jewellery, popular items with affluent Chinese tourists, are facing a decline of 24%.
Despite a bleak outlook for the retail landscape, a new opportunity has presented itself to overseas fast fashion and mid-priced brands. With shop rents down an average of 25%, these new fashion houses are leveraging the low cost to enter or expand their operations in Hong Kong, a tactic that was previously very cost-prohibitive.
Small companies have also made moves to test new waters through this new trend by testing the marketplace with pop-ups stores, which have been gaining in popularity over the past year. Historically, not quite so popular, pop-ups are gaining recognition by smaller brands as a good way to drive awareness as well as test the viability of longer term arrangements.
Paul Shelton, Director for Sales & Marketing, Supply Chain & Procurement and Construction, Property and Engineering, Randstad Hong Kong noted, “The traditional retail landscape has looked particularly poor this year and sales continue to fall and diminishing tourism numbers, especially from Mainland China, a key driver for revenue in the past. We’re currently in the midst of an adaptation of the retail landscape. No longer are big names, retail brands dominating the market. The current slump has allowed smaller players to emerge and innovate.”
Fast Changing Consumer Demands Drive Need for Merchandisers
With the changing retail landscape as well as the increasing speed of change and variance of consumer tastes, senior merchandisers have emerged as sought-after candidates. Retail organisations have a growing need for experienced merchandisers who are able to select the right products and adapt the product line ups to suit the fast changing consumer demands.
Sights Set On E-Commerce
Retail organisations have clearly understood the need to move onto digital platforms. Key players are making moves and scrambling to implement new e-commerce platforms to complement their business strategies. Digital skills have become highly sought-after and the rush for candidates with digital and analytical experience has led to a larger talent gap.
E-commerce focused organisations have continued to take market share from traditional retailers who have failed to implement their own digital strategies.
Traditional retailers, who have recognised the gap, are seeking candidates with experience in supporting and managing the implementation of e-commerce platforms. With the sharpened focus on e-commerce from new and traditional retail players, digital marketing skills are also increasingly in-demand.
“With this opportunity for smaller organizations to stretch their legs, it will be interesting to see how the retail landscape will change in the longer term as small to medium retail companies compete with the larger organisations on a more level playing field,” added Shelton.