This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Hong Kong Luxury Sales Explode on Mainland Tourism

HONG KONG ( TheStreet) -- Canton Road sounds like the name of a commercial hub in old southern China before it was renamed Guangdong and the roads began turning into flyovers. You could imagine people crowding around for steaming pork buns, squawking chickens and chilling chats with fortunetellers.

Canton Road is in Hong Kong, a reservoir of Cantonese culture with an overlay of British laws and city planning. But most of the people who shop there come from mainland China. They throng the outlets of Burberry (BRBY.L), Christian Dior (CDI.PA), Gucci (GUCG) and Louis Vuitton (MC.PA). It's not just window-shopping.

As a result, fast-rising rents in Hong Kong's Causeway Bay shopping magnet have surpassed those of former top-ranked Fifth Avenue in New York, per findings released this month by property consultancy Cushman & Wakefield.

Who but the world's leading brands could afford to sustain there?

Tourism is all but synonymous with shopping when it comes to mainland Chinese in Hong Kong. With China on a campaign to double people's incomes from an average of $4,940 by 2020, the city that already sits comfortably as an Asian financial center is just going to grab even more money from its bigger-than-big brother to the north.

Put simply, the brands sold on Canton Road will rake in more from Chinese tourists. The Nielsen Co. says those shoppers tend to have above-average incomes and ration out their spending with an average trip bill of $1,548. Of that, 59% goes to shopping that's so intense that the last purchase may be an extra suitcase.

I spent part of an evening on Canton Road earlier this month to see how this works -- and why, given that you can get the same stuff all over mainland China.

Mandarin Chinese was the only language I heard along the festively lit street near the harbor of Kong Kong's vast Kowloon district. Groups of 20-some friends and families with infant children lined up 10 to 20 apiece, and in high spirits, at Hermes and Prada, which apparently don't want their fashion shops to get overcrowded.

I also met a storybook family patriarch who leaned against a post outside the shops with a flotilla of shopping bags. The women in my family are all inside, he said, smiling with pride that they could afford it all (consider China's legacy of poverty).

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,047.33 -23.89 -0.14%
S&P 500 1,972.52 -5.28 -0.27%
NASDAQ 4,493.9740 -11.8780 -0.26%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs