Essay on "Shopping Tourism in Hong Kong"

Essay 18 pages (4928 words) Sources: 15 Style: Harvard

[EXCERPT] . . . .

" (Hong Kong Tourism Commission, 2011 p.1) This is due to the modern transportation network and "tourist-oriented authentic Chinese traditions when combined provide "both convenience and nostalgia" in tourism destinations and the time spent as well as the money spent in those locations. Cultural tourism has then served to drive the growth of tourism industry participants and moreover has driven the profitability of shopping tourism businesses in Hong Kong. Domestic cultural tourism is such that places a variety of individuals into a group experience that is voluntary in nature and based on identification with the traditional Hong Kong culture.

Visa reports a study that included representation of shopping tourists from Canada, The United States of America, Thailand, China, Hong Kong (SAR), Vietnam, Cambodia, and the Philippines. Nine individuals in the study state an income of U.S.$5,001 or above, 1 individual reported an income of U.S.$3,001 - U.S.$4,000, one individual reported an income of U.S.$2,001 - U.S.$3,000, on individual reported an income of U.S.$1,001 - U.S.$2,000, and two individuals reported no income with two individuals reporting an income of U.S.$500 or below. (Visa, 2010)

The occupation of participants in the study reviewed included the following reported occupations:

Clerical/Administrative 1

Retired 2

Executive/Managerial 4

Academic/Educator 1

Other 2

Self-employed/Own Company 4

K-12 Student 1

College/Graduate Student 1

Information on the types of goods purchased in Hong Kong was obtained from a study reported by the Center for Retail Research, which reports that purchases of non-food retail items totaled €23.45 with 7,026 million shoppers in 2010. Purchases of food items in Hong Kong are reported at €29.27 for 2010. Hong Kong is reported to have had 7 million shopping tourists in 2010. Participants in the study reviewed that cited services quality in shopping malls as important totaled 2 participants with other participants citing that more important were the following factors:

Great selection

Good prices

Great bargains

Cheap and convenient

Broad selection range

Discount prices

Those who stated that prices of products were important included five participants. When asked if they intended to shop in Hong Kong again, all individuals participating in the study reported that they did except for one participant who states that they do not like to shop anywhere.

Figure 1

Questionnaire Answers: Shopping Tourism in Hong Kong (Gender, Age, Continent of Residence, Country, Education Level, Income, & Occupation)

Source: Visa -- Tourism Outlook (2010)

Hong Kong ranks number six among shopping tourism locations in the survey findings reported by the Center for Retail Research. This survey is reported to have been published in 2011 and to have been sponsored by Kelkoo. Key results reported that London "was found to be the world's shopping capital [and] the largest retail market in non-food shopping - £64.15 billion; the largest retail sales of food and non-food - £91.90 billion; and the largest online sales - £9.9 billion." (Center for Retail Research, 2010) The survey examined the shopping size and impact and reports that comparability "is the key" in the research findings.

Figure 2

Figure 2

Shopping Capitals Non-Food Sales 2010

Ranking

Sales

(£bill)

Sales

(€bill)

Population

(millions)

London

1

£64.15

€75.72

11.917

Tokyo

2

£61.40

€72.49

12.989

New York

3

£46.95

€55.43

8.391

Paris

4

£46.58

€54.99

11.089

Los Angeles

5

£20.39

€24.07

3.834

Hong Kong

Rio De Janeiro

21

£4.57

€5.40

7.623

Johannesburg

22

£1.40

€1.65

3.888

Totals

£417.48

€492.83

Statistical Mean

£18.98

€22.40

5.212

Source: Centre for Retail Research (Blackburn House, Brake Lane, Newark, Notts) www.reteailresearch.org/worldshipping capitals.php

The city ranking for all retail both food and nonfood are reported as shown in the following table.

Figure 3

Ranking for All Retail (Food & Non-food)

Ranking for All Retail (Food & Non-food)

Ranking

Sales (£bn)

Sales (€bn)

London

1

£91.90

€108.49

Tokyo

2

£90.17

€106.44

Paris

3

£77.90

€91.96

New York

4

£66.20

€78.15

Los Angeles

5

£28.75

€33.94

Hong Kong

Rio de Janeiro

21

£6.50

€7.67

Johannesburg

22

£2.21

€2.60

Totals

£622.14

€734.44

Statistical Mean

£28.28

€33.38

Source: Centre for Retail Research

Hong Kong's ranking is shown at number 6 in this category of the survey findings. Online sales shows a different picture with Hong Kong ranked at number 10 indicating that Hong Kong is missing opportunities to increase its sales in this arena.

Figure 3

Online Non-food Sales in each shopping capital

Online Non-food

(Percent retail)

Online Sales

(£ millions)

Online Sales

(€ millions)

Online Sales

Ranking

London

15.5%

£9,923.9

€11,715.1

1

Tokyo

13.8%

£8,453.3

€9,979.1

2

New York

13.4%

£6,314.1

€7,453.8

3

Paris

12.1%

£5,639.9

€6,657.9

4

Los Angeles

11.6%

£2,358.1

€2,783.7

5

Sydney

11.1%

£1,681.8

€1,985.4

6

Manchester

12.5%

£1,521.9

€1,796.6

7

Berlin

13.2%

£1,306.0

€1,541.8

8

Singapore

6.6%

£1,207.0

€1,424.9

9

Hong Kong

5.1%

£1,015.4

€1,198.7

10

Dubai

5.9%

£962.6

€1,136.4

11

Copenhagen

13.3%

£914.9

€1,080.1

12

Amsterdam

9.4%

£879.1

€1,037.7

13

Barcelona

6.1%

£800.9

€945.5

14

Milan

5.1%

£685.2

€808.9

15

Madrid

6.8%

£683.0

€806.3

16

Oslo

12.8%

£647.4

€764.2

17

Stockholm

10.6%

£559.6

€660.6

18

Rome

4.8%

£500.7

€591.0

19

Moscow

5.5%

£374.1

€441.6

20

Rio de Janeiro

6.5%

£295.1

€348.3

21

Johannesburg

6.6%

£92.3

€109.0

22

Totals

n/a

£46,816.3

€55,266.6

na

Statistical mean

9.5%

£2,128.0

€2,512.1

Source: Centre for Retail Research

Hong Kong's ranking is shown at number 6 in this category of the survey findings. Online sales shows a different picture with Hong Kong ranked at number 10 indicating that Hong Kong is missing opportunities to increase its sales in this arena.

Reported is the most popular among global shopping centers with tourists from overseas are those of:

1. London (14.1 million);

2. Singapore (9.7 million);

3. New York (8.5 million);

4. Dubai (7.8 million);

5. Paris (7.8 million);

6. Hong Kong (7.0 million); and

7. Rome (5.5 million). (Center for Retail Research, 2010)

Specifically reported in the Tourism Hong Kong report by Visa is the following spending trends:

• Other retail 19.8% (761.8M)

• Accommodations 29.8% (362.7M)

• Remaining merchants 10.5% (314.3M)

• Department Stores 19.5% (176.9M)

• Restaurants 16.2% (126.4M)

• Health care 7.7% (43.6M)

• Other travel and entertainment 3.6% (35 M)

• Travel agencies 5.7% (25.5M)

• Airlines 11% (28M) (VISA, 2010) (Center for Retail Research, 2010)

Findings in the study reveal that the top tourism season in Hong Kong in 2010 was during November and December during the Hong Kong Winterfest, which is an event run by Hong Kong Tourism Board to attract overseas visitors to celebrate Christmas and New Year in the city. Tourist receipts are reported to have totaled U.S.$242.2 million and U.S.$239.5 million respectively for 2009 and 2010. The lowest ebb of Tourism shopping in Hong Kong is reported in February and an increase by 20% for shopping tourism is reported during October due to the Halloween celebrations taking place at the theme parks in Hong Kong.

Spending in merchant shopping categories include the following:

Other retail 19.8% ($761.8M)

Remaining merchants 10.5% ($314.4M)

Department Stores 19.5% ($176.9M)

Radio, TV, and stereo stores 32.4% ($11M)

Sporting goods stores 13.2% ($11.3M)

Furniture and equipment stores 19% (8.5M)

Miscellaneous Specialty -1.4% ($8.1M) (Center for Retail Research, 2010)

CLSA Asia-Pacific Markets reports its third survey as part of a series on PRC tourist arrivals to Hong Kong, which is stated to reinforce the SAR's "image as a major shopping destination." (2004) The report states that mainland visitor spending "continues to rise, with an overwhelming 90% of respondents affirming their intention to return…" (CLSA, 2004) Primary shopping attractions in Hong Kong include such as "…cosmetics, electronic products, clothing, gold and watches…" (CLSA, 2004)

CLSA's survey is reported to show that "per-capital shopping expenditure has risen by 52% over nine months with cash as the preferred method of payment." (CLSA, 2004) Key findings in the CLSA survey include those stated as follows:

Per-capita shopping expenditure is at HK$4,810, up 52% from CLSA's survey in August 2003, implying that mainland visitors will spend U.S.$7.4bn on retail purchases this year.

Stripping out double-counted arrivals due to side trips such as Macau, mainlanders could account for 28% of HK's total retail sales.

Based on an average 38% retail gross margin, HK is effectively capturingUS $2.6bn of this shopping expenditure, equivalent to 1.5% of estimated 2004 nominal GDP.

Using reasonable assumptions, mainlanders could be spending U.S.$16bn on shopping in HK by 2010, equivalent to 66% of this year's projected total HK retail sales and 3.5% of nominal GDP using the same average gross margin. (CLSA, 2004)

The first study reviewed in this work involved five females and 11 males who had spent time in tourism shopping in Hong Kong. Participants involved individuals from Canada, The United States of America, Thailand, China, Hong Kong (SAR), Vietnam, Cambodia, and the Philippines. The individuals in this study primarily had an income of $5,000 or above in U.S. dollars with others having lower income. Occupations of individuals in the study included clerical/administrative, retired, executive/managerial, academic/educator, other, self-employed or owner of a company, K-12 student or college graduate student.

Participants in the study reviewed cited the most important factors in shopping was: (1) great… READ MORE

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