Mixed Retailers in Hong Kong, China

TRENDS

Variety stores in Hong Kong registered significant growth in 2016, rising in current value by 7%, a rate of growth which was in line with the current value CAGR of 7% registered over the review period. Dollar shops, which are categorised under variety stores, saw rising growth in outlet number across the city, with some of these retailers taking up prime retail spaces in shopping centres and on major shopping streets. As such, value sales and selling space increased rapidly in variety stores in 2016, with dollar shops riding on the growing popularity of Japanese retailers as well as their evolutionary development in retail formats. This growth is also being supported by the strong cultural ties to Japan that many Hong Kong consumers have, as many of them often make regular shopping trips to Japan, a country which is widely regarded as the ideal source for unique items that are not available in Hong Kong.

COMPETITIVE LANDSCAPE

Uny (HK), the operator of the Apita department store, ventured into variety stores during the review period and executed an aggressive expansion plan for its Japanese-themed dollar shops, branded under a Japanese name which translates into English as “Me and my life”. The popularity of these shops surge among local consumers during 2016 thanks to frequent sales promotions, merchant reward schemes and the availability of exclusive and popular Japanese branded products.

PROSPECTS

The strong performance of variety stores is expected to remain in effect throughout the forecast period. By offering an expanded range of products at competitive prices and by expanding their chains of outlets, Hong Kong’s leading variety stores have started to actively compete with other retail channels such as drugstores/parapharmacies, food and drinks specialist retailers and supermarkets. As such, discount stores are likely to remain among the biggest beneficiaries of expanding demand among Hong Kong’s low-income and middle-income population, many of whom continue to struggle due to the difficult economic conditions.

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