Luxury stores suffer, but Chinese brands tap market
奢侈品销量遭受冲击

Luxury retail stores in Hong Kong are suffering from the dramatic drop in Chinese mainland tourists. But it has also presented an opportunity for some entrepreneurs.

Here one day gone the next. Amid a slump in sales...luxury retailers in Hong Kong are shutting up shop.

But not all. Chinese jeweller Lao Feng Xiang recently opened two outlets here, including this 80 square foot boutique in one of the city's prime shopping districts.

It says it plans to open 20 more... over the next three years. A dip in commercial real estate has seen a flurry of mainland luxury brands expand into Hong Kong.

And with shop rents expected to fall a further 15% this year... more could follow.

This is Canton Road, it's lined with some of the most-recognized brands in the luxury segment and is a favourite shopping destination for many who come to this city. An economic slowdown in China coupled with a clampdown on flashy spending has put a squeeze on many businesses here, but it's also paved an opportunity for new players... from across the border... to enter the market.

Lao Feng Xiang's foray into the city comes despite a challenging outlook. Visitors from the mainland who account for a large share of luxury spending have plummeted.

Homegrown jeweller Chow Tai Fook saw its full-year profits plunge by 25 percent.

With leases due to expire, it plans to shut four shops in the coming months, and hasn't ruled out closing more.

Lao Feng Xiang's own profits rose to more than 80 million dollars in the first half of this year, but sales outside of China accounted for less than 1% of its business… meaning there's huge room for growth, if it manages to raise brand awareness abroad.

And if the likes of Lao Feng Xiang succeed, it may not be long before Chinese luxury brands are scattered across the globe.