Retail labels grow in cash-strapped Hong Kong

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HONG KONG -- As the economic crisis weakens the spending power of Hong Kong shoppers, low-end mass retail labels have begun to dominate the market.

The combined sales of Giordano, Bossini and G2000 alone now account for 26% of total branded retail clothing sales in Hong Kong, according to market research firm Asia Market Intelligence.

Although low-end mass retailers have also been hit by the retail slump, sales are still promising compared to those in the high-end segment, which has suffered during the past months as influential shoppers limit spending.

Total branded retail clothing sales are expected to reach $4 billion by 2000, says Angela Lee, publications manager for AMI Business Consulting. She believes the low-end mass retail segment will continue to capture about 40% of total market sales.

And that figure is expected to rise. Conservative spending behavior and the demand for low-price, quality clothing suggest that over the coming years lowend mass retailers will force changes in the branded retail clothing market.

Meanwhile, combined sales of the top three leaders in ultra high-end designer clothing now account for 3% of total sales, while high-end designer and high-end mass retail account for another 3% and 6%, respectively. These retailers hope for 2% annual growth in the high-end mass retail segment over the next three years and say the highend mass retail segment is still the most coveted in the industry.

Copyright July 1998, Crain Communications Inc.

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