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.
Two things. First, “gifting”, a word I never knew existed! Second, what’s all this about shopping “experiences”? Whitewater rafting down the Zambezi is an experience. Hiking the Inca Trail to Machu Picchu is an experience. Buying some overpriced luxury tat in a gawdy mall, is not an experience, premium or otherwise.
(The Financial Secretary is in Legco)
Long Hair: What’s with this Brexit? What’s happening? Should we be worried? What about the workers?
Big John: After a frank, vigorous and wide-ranging meeting with the CE this morning I would just like to say that during the present situation we are constantly aiming to maximize our conceptual resources to provide a secure basis for all stakeholders to undertake a calm, careful and honest appraisal of any future ramifications of the extant occurrences as they unfold, with a view to bringing a solidly-based and realistic approach to ongoing developments. Thank you.
Long Hair: Where’s my banana?
Moustache’s comments, as quoted by you, are as or even more serious, profound and valuable as anything I have heard come out of the UK whether Cameron or Carney and are stellar compared to the vacuous wind from Boris Johnson or his black shirted assistant Mr Gove
You don’t get it. It’s the end of neo-liberal orthodoxy. This was a protest vote against all the books you have read and every magazine you pore over. The revolution goes on. Burn your books and start over.
@ Big Al
Doncha know? Its all about the “Customer Centricity and The Importance of the Customer Experience” these days mate… that would be why I would purchase in a small organic shop over a ParknShop any day…
Classic Hemlock insights today. I can almost hear the mirthful chuckling from here … from a quantum physics perspective, collapse of superimposed states is always necessary for the creation of new possibilities (and new universes of possibilities, a.k.a. paradigms).
And I would recommend to everyone talking about the “importance of the mainland retail segment” to Hong Kong do a brief study of basic economics and risk management. A diversified and vibrant local economy which generates returns on financial and human capital that are shared in a fair manner between ALL stakeholders – employees, customers, suppliers, investors (in order of importance) – is the only sustainable way forward for Hong Kong as an economy *and as a society*.
A message to Hong Kong tycoons – you can still be pirates, just friendly, socially responsible pirates (think Jack Sparrow) who care about creating a fair, equitable, prosperous society to the same degree, or even MORE THAN (heresy!) you care about your treasure (i.e. your narrow family interests, like corp profits). The long-term alternative … well the Peak is not a defensible position (not bad terrain, but pretty terrible in terms of power, water and other resources).
I see the ghost of Margaret Thatcher lingering over the smoldering mess that is the UK. The communities that she devastated, and Tony Blair defenestrated, have taken their revenge; when you’ve got nothing left, you’ve got nothing to loose. The untruths, the distortions, the outright lies and the hypocrisy are no longer going to be enough to hold on to power. The game has changed. The poor folks have woken up, taken the red pill and now want someone to answer for this shambles.
Immigrants. They want immigrants to answer for this shambles. People may be justifiably angry but human nature is such that they’ll direct it at the next poor bugger they can kick in the teeth.
Polly Toynbee’s Guardian article on Brexit has some interesting insights.