Not content with sending the UK and Europe into psychological and economic death spirals, Brexit is apparently wreaking havoc in China and Hong Kong.
It means an end to the touching ‘bromance’ between Britain’s David Cameron and China’s Xi Jinping. (People thought at the time that the Conservative government’s bid to be Beijing’s best buddy was a surprisingly cynical and inept political miscalculation. Those were the days…) Plunging UK/European currencies could derail China’s export-based economy for good, or disintegration of the Western world will enable the Middle Kingdom to divide and rule the whole planet – we’re not sure which.
Hong Kong-focused companies that nostalgically cling to the former colonial motherland’s apron strings are being hit hard. Prime victims are HSBC, Standard Chartered and our number-one tycoon Li Ka-shing, whose UK interests include retail, phone, gas, electricity, ports and other highly original sectors.
Vultures see opportunities. Hong Kong’s Chief Executive CY Leung mentions cheap real estate in London, while a top guy at Bank of China HK tempts the city with the exciting prospect of gaining at the UK’s expense as an offshore Yuan trading centre. Financial Secretary John Tsang and Monetary Authority chief Norman Chan talk of caution, prudence and monitoring the situation – honest admissions of cluelessness for which they deserve our respect.
What, we all wonder, about Hong Kong’s retail/landlord sector? Could Brexit by any chance cause it to suffer horrible pain as sales, turnover and profits shrivel up into nothing? It is a mouth-watering prospect.
An expert tries to put a brave face on the ‘crisis’ the sector is already facing. The executive summary…
Top brands need to go back to their original positioning, offering customers a premium experience with high-quality service and exclusive offerings.
This suggests that ‘top brands’ at some point started to provide sub-standard ‘experience’ and low-quality service (which is apparently different from ‘experience’) and – as the observant among us may have noticed – were all selling the same tedious crap. Disappointingly, it also suggests that the ‘top brands’ sector can reform and survive, when all right-thinking people would rather it just died, and the dust blown away with the wind.
The expert says:
It is certainly the most challenging I’ve seen since SARS. But the rents in shopping malls are not decreasing. However, nobody dares to close shops in the luxury space, but it will happen; it must happen.
The cartoon character has run off the cliff and is standing there and hasn’t looked down. Yet.
…many of the big brands set out to impress the mainland Chinese, and they rented bigger stores to show they are big brands … this killed the malls and the interest in those places … I would say reduce store sizes and bring more diversity to malls.
Could he mean ‘sell stuff people want’? This is dangerous and subversive talk.
A big part of the results [presumably ‘profits’] in Asia was gifting … generating more exclusive and over-priced products. But this is no longer the case.
Gifting! By which of course we mean ‘Mainlanders bribing each other’, as discouraged by Xi Jinping. So instead…
You need to go to local consumers and target them directly
Or, indeed, indirectly – just stop targeting people who Thank God/hopefully aren’t coming to Hong Kong any more.
However, we are still not quite getting to the radical and revolutionary stage of ‘selling people stuff they want’. The talk here is all about ‘brands’, which tends to mean overpriced junk. The expert recalls the time 60 years ago when luxury goods were authentic: family-made, high-quality and very limited in supply. Those companies (like LV) – or their names and logos – were bought by conglomerates, who mass-produced the stuff, eventually in China, and relied on marketing to con new-rich Asian suckers into believing the items were desirable and valuable. Now the market is saturated, and even Mainlanders are getting tired of the avalanche of tawdry, phony heritage/lifestyle BS. So what’s the way forward?
There needs to be an upgrade in the quality of the service … I once purchased a beautiful jacket from a luxury brand, and the salesperson asked me if I wanted to pay an extra 50 cents for a bag. I thought, “It’s raining outside, of course I want a bag. Charge me HK$500 more, I don’t care! If you go into a luxury shop, you should be treated as a luxury client. This is important.”
How to overcome Brexit: charge people HK$500 for a bag.