With Louis Vuitton bag costing just US$100 more in China, will mainlanders still head to Hong Kong for shopping expeditions?
Tax cut and weakening yuan could affect the way Chinese tourists spend their money in the city, say analysts
China’s decision to cut import tariffs and the rapid depreciation of the yuan pose a serious threat to Hong Kong’s status as a shoppers’ paradise for tourists from the mainland, say analysts.
Visitors from the mainland account for a third of the total visitors to the city, and have been instrumental to the recovery of its retail sector since last year. The tax cut could affect the way Chinese tourists spend their money in Hong Kong.
French luxury goods company LVMH Moet Hennessy Louis Vuitton (LVMH) this week became one of the first companies to cut prices in China following the government’s decision to reduce import duties from July 1 on nearly 1,500 consumer products ranging from cosmetics to home appliances.
LVMH has lowered prices ranging between 3 to 5 per cent, according to mainland media Beijing Business Today.
According to prices on its China and Hong Kong websites, its popular Néonoé Monogram Canvas handbag is now available for 11,800 yuan (US$1,779) from 12,300 yuan previously. The same bag costs HK$13,200 or 11,163 yuan (US$1,683) – a difference of US$96.
The difference in prices between the two places has narrowed because of China’s tariff cut and the yuan rapidly losing value.
