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Hong Kong people spending habit polarized in Chinese New Year

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Hong Kong people spending habit polarized in Chinese New Year

source: takungpao

translated by cici@AsianEU

 

Poon Kuen-fei says that business is surprisingly good

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Siu Wing-Chuang says that under poor economy, customers pinch to the last dollar and cent when buying candy

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The Lunar New Year is fast approaching, and the street is crowded with people to prepare for the New Year. Although under the impact of economic instability, some dried foods stores said business this year is better than last year, and they believe it has to be more Hong Kong people staying in Hong Kong to celebrate the New Year, in addition to sharp price cuts of dried foods that many business revenue increase. Hong Kong Dried Goods and Grocery Merchants Association President Michael Mak says that current consumer spending polarized that some people reduce spending and some buy expensive goods as usual. When two sides balance, they have confidence to maintain revenue.

 

Lunar New Year is coming only in a few weeks, and dried goods store on Sheung Wan Street is packed with people preparing for New Year. Poon Kuen-fei in charge of On Gei Dried Foods says they worried about this year's market since September last year of the outbreak of the financial crisis. They were so anxious that they couldn't sleep thinking that if revenue drops 30 percent is most fortunate, which is why they come up with price cuts to keep the business. He says they have never expected such a positive response and they have been busy starting from December, to which December turnover is more than the revenue of the same month in previous year, which is a double-digit growth. He estimates that New Year sales will have a 5 to 10 percent growth this year selling in small sale and quick sale.

 

Poon Kuen-fei says that this year products are at discount prices to attract customers. The more popular traditional New Year foods such as mushrooms, fish maw, dried scallops and Japan abalone are in prices lower than cost to benefit the customers. "For example, canned abalone from Australia, the usual sale price of 250 dollars is now sold as 198 dollars, that is cheaper than the cost price; also, Japanese abalone sold at 8000 dollars per 500 grams last year, at present, price cuts down to 4800 dollars per 500 grams that customers are eager to buy".

 

"Although the increase in turnover, but because many goods are price promotions, revenue is little, so they can only gain revenue selling frequently.", Poon Kuen-fei says that employees are too busy, and business rebounds this year, so he will be distributing double pay and bonuses, also, bonus amount this year increases more than last year.

 

Hong Kong Dried Goods and Grocery Merchants Association President Michael Mak says that the industry's business is initially affected by the economy, but business has gradually picked up. "Hong Kong people are still rich, so they will not save when buying goods in the New Year." He says that high prices dried seafood has never been universal that it is not common festive food while the rich will not save just because the economy is poor. "Price promotion is only merchants gimmicks, dried goods prices has been raised too high in previous years due to the economy boom, this year price is only dropped back to moderate price, so I believe the industry business will be similar to last year's business".

 

"At present, spending is polarized. Some reduce spending to save, some continue to buy expensive goods as usual that they will not save on several thousand, hundred thousand dollars", Michael Mak says that there is confidence in the business to keep revenue when there's a balance. "There are still frequent customers buying expensive seafood for New Year. Some spend more than 50,000 dollars to buy dried abalone, shark's fin and dried scallops that they are not affected by the economy."

 

Some people of course would like to take the opportunity of a financial crisis to purchase goods at a great price. Mrs. Ko who has shopped around 2 to 3 times says she will buy after assessing prices and expects this year's spending to be slightly reduced. On the other hand, Mr. Leung who has spent hundred thousand buying dried seafood says that holiday can't have without dried abalone and scallops, and he goes to Shang Wan to shop for New Year goods every year. Even if the economy is poor, New Year meal has to be nice. He says that this year's high prices goods is indeed much cheaper than before, so he will buy more to stock.

 

On the other hand, businesses that sell only candy and other New Year snack shop say customers change spending patterns, to which they will assess and calculate down to one dollar and cent. Snack owners say this year's Chinese New Year candy businesses will be down by 20 percent compared with last year, but businesses refuse to have price cuts.

 

Shun King Trade Co., Ltd., in Sheung Wan has the franchise of New Year candy and snacks. The shop owner, Siu Wing-Chuang, says this Chinese New Year's business is poorer that the average spending is lower than last year, and he anticipates the business during Chinese New Year will fall 20 percent than last year. "Impacted by economy, many customers have changed spending patterns who will only choose low-priced Chinese New Year candy spending an average of only tens of dollars.", Siu Wing-Chuang says in the past many mainland Chinese customers have bought candy at his place, spending two thousand to three thousand dollars each time, which is several tens of dollars more than local customers. But due to the financial crisis, number of Mainland Chinese customers have been reduced. But he is most baffled by customers not saving on higher price goods, they would pinch to the last one dollar and cent, yet they are willing to buy expensive goods such as dried seafood. Siu Wing-Chuang says that although business has dropped, but he refuses to have price cuts, because products have a value of up and downs, so he does not want to sell lower than products cost. He admits that he is not concern about New Year business, but business after New Year because business will become slow.

Edited by cici

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I wonder if ichiban will be packed.They always seem to have some sort of discounts going on.

just wondering do you have any news reports on the cold weather in hong kong?

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There're some news on cold weather a few days ago, but I don't recalled having any yesterday.

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Prices cut or not ... people will buy products when they have money. Some items people deem it to be necessary and valuable for Chinese New Year, they will spend their hard earned money to buy it ... even if its prices are expensive.

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