Personal Vehicles a Rarity in Hong Kong; Consumers Spend on Luxury Instead
Of the markets that Euromonitor covers, Hong Kong has the highest retail value sales of luxury goods per household, but it is especially striking that this is four times higher than consumer expenditure per household on the purchase of motor vehicles. Even in China, luxury goods sales only amount to 66% of consumer expenditure on buying motor vehicles. However, there are two very good reasons for this phenomenon in Hong Kong; luxury-obsessed consumers and low levels of private vehicle ownership.
Low Levels of Private Vehicle Ownership
Hong Kong has excellent mass transportation links and commuting via public transport is not time-consuming. With around 200 kilometres of railway, roughly 150 stations and four million individual users daily, Hong Kong’s underground rail (or MTR) is by far the most popular method of getting around for commuters in all social classes. Rail, buses and, for those that can afford it, taxis are the most popular other modes of transport but there are also more antiquated modes of transportation in the form of trams and ferries.
Moreover, private transportation is unmanageable in the city and parking is at such a premium that only the very affluent consider driving to work in the central business district. Even scooters and motorbikes are unpopular and, consequently, there were less than 100 passenger cars, commercial vehicles and motorcycles and mopeds in use per 1,000 people in Hong Kong in 2012.
Despite some concerns about the economy and the resultant choppy consumer confidence, demand for luxury goods in Hong Kong has shown no sign of abating. The more affluent continue to make extravagant purchases but demand for luxury is by no means exclusively coming from the elites. In fact, middle-class consumers are also significant consumers of luxury goods, particularly since the zero per cent sales tax places luxury goods within the financial means of Hong Kong residents.
Hong Kong consumers are amongst the most luxury-obsessed consumers in the world; indeed, when it comes to demand for luxury goods, it is clear that the relatively small group of Hong Kong consumers punch significantly above their weight. However, Hong Kong is also seeing more and more shoppers from mainland China. According to the Hong Kong Tourist Association, more than 120,000 Chinese people visit Hong Kong or Macao every day to shop.