Retailers hope for a boost as mainland tourists get a hike in duty-free quota

Stacy Shi

Hong Kong's retail sector is hoping that the increase in mainland tourists' tax-free quota can boost its performance.

This came after the central government increased the tax-free quota to 12,000 yuan (HK$12,900) for mainland visitors in Hong Kong from yesterday.

Also, mainland tourists visiting Hong Kong through six land ports can enjoy a 15,000 yuan tax-free quota, with an additional 3,000 yuan worth of goods at duty-free stores at border crossings.

The new measure will be extended to all control points from August 1, and the government expects that it will bring an additional shopping spending of up to HK$17.6 billion annually in Hong Kong.

However, Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, said it will be difficult for the measure to boost the economy in the short term due to declining businesses and the rising costs of rent and labor.

"If retailers cannot balance their books, they will need to shut down," she said.

A pharmacy representative in Tsim Sha Tsui said the adjustment would serve little help as "there are no customers at all."

At Harbour City, Canton Road, mainland tourists were spotted queuing at luxury goods stores such as Chanel and Louis Vuitton, with 70 percent of them walking out with shopping bags.

A tourist from Hangzhou spent more than HK$100,000 at a luxury store, and believed the new measure will encourage more mainland tourists to shop in Hong Kong.

However, other tourists considered the 12,000 yuan tax-free quota to still not be enough.

A tourist, Zhang, said the low tax-free quota has repressed her friend's desire in purchasing electronic items. She hoped it could be further relaxed to HK$30,000 to HK$40,000 gradually.

A Beijing tourist, Wang, who bought cosmetics worth over 3,000 yuan at a name-brand shop, also considered there is still room to further increase the quota, as the purchases could easily add up to exceed the 12,000 yuan threshold.

"One of the purposes of our visit to Hong Kong is shopping, and the service here is good. But we will not intentionally spend that much money, just to purchase goods in need," Wang said.

stacy.shi@singtaonewscorp.com