Hong Kong’s retail industry is undergoing significant changes, with many brands shifting strategies as residents increasingly shop online and head across the border to mainland China for better deals. Jeanette Chan, senior director of retail at JLL in Hong Kong, predicts that more shops will close or pause expansion plans in 2025.
“Before Covid, online shopping only came to about 3 to 4% of Hong Kong’s total retail sales,” Chan said. “But during the pandemic this percentage increased to double digits. After Covid, the percentage dropped back to single digits, but now we actually see this trend increasing again in the second half of this year as more people shop online.”
Despite the online shopping boom, some retailers, like local beauty brand JaneClare, are finding success both in the digital world and in physical stores. Founded in 2012, JaneClare has 30 kiosks in Watsons shops and four standalone outlets, selling skincare products priced from HK$200 to HK$1,500.
Angela Lee, the company’s founder and chairwoman, emphasized the importance of live-streaming for sales. In July, JaneClare launched live-stream selling on Facebook, which proved highly profitable. “A single Facebook streaming session can rack up sales of a few hundreds of thousands of dollars,” Lee said. “It’s something that would be difficult for a physical store to achieve.”
Despite JaneClare’s online success, physical presence is still key for the brand. Lee recently opened a flagship store in Tsim Sha Tsui, one of the world’s most expensive shopping districts, to complement their online efforts. “After the pandemic, we have become used to shopping online and also communicating online, but it’s difficult to meet your clients without that physical presence,” Lee noted.
The 8,000-square-foot store features a dedicated floor for VIP members to relax, enjoy tea, and even have their makeup done. Although Lee doesn’t plan to open many physical stores, this flagship allows them to connect with clients and showcase premium products.
With tourists’ per capita spending declining, JaneClare focuses on offering high-quality products to differentiate itself from mainland Chinese competitors. “We cannot compete with our brothers up north in terms of pricing, it’s impossible. So, I say we have to compete in quality and go for premium products,” Lee said.
The changing landscape highlights a growing reliance on online sales, even as physical stores continue to provide valuable experiences for customers.
