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Hong Kong shops shut amid post pandemic downturn

Hong Kong shops shut amid post pandemic downturn
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STORY: Jacky Yu is closing his Japanese gift shop in Hong Kong after 12 years.

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He has made the difficult decision to move it online.

His store is located in the city’s shopping district of Mong Kok, a once bustling hub packed with stalls, street food and tourists.

But now, parts of the area are struggling to stay afloat.

It’s due to a combination of customers emigrating, locals heading across the border to shop in China, or traveling to Japan to benefit from a weak yen and dwindling tourists numbers.

“I almost want to cry when I talk about it, because I’ve been doing this business for a long time and I’m really reluctant to let it go. But there’s no choice. The overall (economic) situation has forced me to do this because if I don’t close the shop, I simply don’t have the money to pay the rent.”

Hong Kong has been struggling to recover since the global health crisis.

Edmund Wong, an accountancy sector lawmaker, told the city’s legislature on April 19 that more than 20,000 companies had deregistered in the first quarter of 2024, up more than 70% from the same period last year.

Even with the Golden Week holiday starting on Wednesday (May 1), a traditionally busy time for shopping and entertainment, many businesses are not optimistic.

But on Tuesday (April 30), the city’s leader John Lee played down concerns about businesses closing.

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“The world is always changing, and different industries will need to adapt, so there will be operators who are not so successful but newcomers are getting into the market.”

The number of mainland Chinese tourists in Hong Kong has plunged.

After the city reopened its border with China last year post-pandemic, the Tourism Board recorded a nearly 39% drop in mainland visitors in 2023, compared with 2019 before the global health crisis.

Spending by same-day mainland tourists dropped from an average of about $281 per person in 2019 to about $179 four years later.

Jacky Yu: “Since the pandemic passed and the border reopened, our business has actually been worse than during the pandemic, decreasing by another half in terms of sales.”

At the same time, Hong Kong residents are also deserting local shops.

They are increasingly traveling across the border to Shenzhen for food and entertainment, where they say prices and services are better.

Vera Yuen is a lecturer in Economics at the University of Hong Kong.

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“First it’s about the integration with the Greater Bay Area. More Hong Kong people now find it, you know, great and cheap to, you know, just consume in the Greater Bay Area. In return, when tourists come to Hong Kong, they will find it very expensive. The services are not that good. It’s unattractive.”



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