Hong Kong’s declining retail market has impacted beauty-products retailer Bonjour Holdings, with first half sales down 11.5 per cent.
The sharp decline caused the company to swing from a HK$7.4 million (US$944,000) profit in the first half of last year to a loss of $29.5 million ($3.76 million) this year.
While Mainland Chinese visitor numbers were up 14 per cent in the six months to June, to about 35 million, the spending per capita by overnight visitors fell 13.6 per cent to HK$6010 ($766), and the number of visitors staying overnight fell by 18.5 per cent.
Chairman Wilson Ip said the changing habits of tourists, particularly those from the mainland, has put a damper on the retail sales growth.
“Tourists are now inclined to take short trips to Hong Kong and spend lesser than before. Bonjour has noticed such changes and has enriched our product mix and promotional offers to boost sales. For instance, we have an ongoing joint promotion campaign with Union Pay to offer special discounts to the Mainland visitors who use Union Pay card for payment. Also, we endeavored in planning proper store layout to strategically direct shoppers to high-priority products and drive impulse sales as well as to make good use of our space to let customers easy to navigate, which are important for providing a good customer experience,” said Ip.
Changes to China’s e-commerce laws early this year require Daigou merchants – who used to declare their imports as personal items to avoid taxes – to obtain licenses and register as businesses. This had brought a knock-on effect on the group as cosmetics were a popular category for daigou merchants.
However the e-commerce law change had created an opportunity for Bonjour Holdings which has upgraded its own online store and joined platforms such as Tmall Global, Kaola and Xiahongshu.
Ip said Hong Kong retail sales had been impacted by the US-China trade war which had slowed economic growth and sapped consumer confidence.
“Political and economic instability looms over the city, which brings uncertainties in tourism and the retail market,” he said.
Group revenue reached $824.8 million this year, compared with $932.3 million during the same period last year.
Bonjour Holdings operates 39 stores in Hong Kong, Macau and Guangzhou.