Hong Kong Luxury Goods Sales Continue to Boom

Not by chance are the Asia-Pacific headquarters of LVMH, Prada, and Dolce and Gabbana based in Hong Kong. In addition to the city's proximity to China's enormous emerging market, Hong Kongers show no sign of cutting back on their luxury goods spending.

From designer-clad women checking what is new in French couturier stores to men eagerly snapping up tailor made suits from a U.S. outfitter and trendy youngsters overflowing out of European sports gear shops, locals of all ages seek out the world's most prestigious and expensive labels.

What distinguishes buyers in Hong Kong from other luxury goods consumers around the world, however, is that they are substantially members of the middle class rather than the super rich, and having big-name labels close at hand is another reason for rising luxury goods sales.

In a city packed with high-end shopping malls, shoppers don’t even need to step out into the rain or heat and humidity since many major buildings contain malls linked by overhead walkways.

Living in such a business-minded, materialistic city also helps boost sales, with high-profile brand names such, as Christian Dior, Chanel, Louis Vuitton and Hermes, Rolls Royce and Jaguar, on every corner.

Asia accounts for 40 percent of world luxury brand sales and outside of Japan, Hong Kong residents buy more luxury items than any other Asians.

Sales have received a further boost by a rise in the number of Chinese tourists from the mainland visiting Hong Kong due to a relaxation in the communist giant’s travel policy.

In addition, high taxes on luxury goods in mainland China make the cheaper prices in Hong Kong a big attraction for Chinese visitors. Government figures show mainland Chinese spent 6,018 Hong Kong dollars ($774) per capita in Hong Kong in 2003 compared with 5,502 dollars ($708) from overseas tourists.

Consumer analysts estimate spending by Chinese tourists in Hong Kong accounts for about 20 percent of annual retail sales. A figure that is certain to rise further as the Chinese economy continues to gallop ahead.