HONG KONG â€" Amid camera-wielding photographers, flower bouquets and a bustling crowd of curious onlookers, the Uniqlo opened a flagship store in the heart of one of Hong Kong’s busiest shopping districts on Friday - underlining the city’s unrelenting attraction for retailers seeking exposure to the giant mainland Chinese market.
It took barely half an hour for the store - which spans three floors and features suspended mannequins moving up and down along a central light well - to reach a semblance of normality, with shoppers eagerly snapping up the colorful casual clothes for which Uniqlo, part of the Japanese company Fast Retailing, is best known.
With a floor space of more than 37,500 square feet, or about 3,500 square meters, the store is a far cry from the far smaller shops that Uniqlo began with in the 1980s. It is also part of Fast Retailing’s strategy of rapid expansion outside Japan, whose economy has been beset by deflation and anemic growth for years.
About 25 percent of the 1,137 stores Uniqlo operated as of last August were outside Japan - 145 of them in China, where the first outlet was opened in 2002. By next August, this will have risen to about 35 percent, with 225 stores in mainland China, Fast Retailing forecasts. The aim, company executives said, is to open 100 Uniqlo stores in China each year, and to have 3,000 stores in across China in 10 years’ time.
Hong Kong, too, is a must-be-there location for international retailers - despite the fact that rents retail, office and residential rents are among the highest in the world.
Uniqlo did not say how much it is paying for the new Hong Kong store - its 16th in the city â€" which is located in the neighborhood of Causeway Bay.
According to a recent report by the real estate services firm CBRE, however, Causeway Bay is the most expensive area in Hong Kong, with an average rent of 786 a square foot Hong Kong dollars, or $101.2 per square foot in U.S. dollars per month. The most expensive locations within the neighborhood, which is home to scores of high-end clothing and jewelry stores and some of Hong Kong’s largest shopping malls, can be more than three times as expensive to rent, CBRE said.
Still, retailers keep coming: Gap and American Eagle Outfitters opened up shops in Hong Kong in 2011, Forever21, another popular U.S. brand, opened a large store just a few steps from the new Uniqlo outlet last year. Abercrombie & Fitch’s flagship store, in the heart of the financial district of Central, opened last August. And Topshop, a British brand, is due to open a large shop this summer, also is in Central.
The reason for all this activity is not so much Hong Kong’s population of 7 million, but the Chinese shoppers to flock to capitalize on the lower taxes in Hong Kong. They are also drawn by the perception that what they are buying here is, well, the genuine article.
Their numbers have ballooned from 6.8 million in 2002 to nearly 35 million in 2012 - and the growth is likely to continue.
No wonder the retail scene, too, has swelled.
