HK businesses losing out as tensions continue over 'parallel traders'

By Michelle Yeomans

- Last updated on GMT

Chinese shoppers accused of parallel trading. Source: CNN
Chinese shoppers accused of parallel trading. Source: CNN

Related tags Hong kong Mainland china

As some Hong Kong protesters continue to harass tourists, retailers are baring the brunt, as shoppers from the mainland and even local residents are put off by the confrontation at malls.

Parallel trading in Hong Kong involves shoppers from mainland China stocking up on everything from cosmetics to alcohol and food which they are not charged goods and services tax for - and take them back across the border in small quantities to avoid paying import duties, to ultimately sell back home.

With tensions high, the number of tour groups visiting from China plunged by about 80 per cent in early March. This is affecting local business as the number of visitors from the mainland reached 53 million in 2013.

According to the Hong Kong Tourism Board, these shoppers contributed 34% to total retail sales in the country in 2013.

Publications on the region have been reporting 'thugs' to be acting in the name of anti-parallel trading, and harassing tourists outside Sheung Shui, Tuen Mun, and Tsim Sha Tsui.

A mainland mother and even local residents were confronted by a group of youths earlier in the month, a video posted online showed them insulting a mother and her young daughter, to which she responded telling them; “We are all Chinese”.

L’Oreal restricts staff from travelling to Hong Kong

International cosmetics player, L’Oreal announced back in October that it would be restricting its' staff from travelling to Hong Kong for business due to the mounting unrest there.

The subsidiary is an important Asian hub for the company.

"It concerns all staff that would have to travel to Hong Kong,"​ said a spokeswoman for the French beauty behemoth, adding that an email was sent around to all staff.

Since 2012, tens of thousands of pro-democracy campaigners have taken to the streets in protest and refused to move until China grants the democratic reforms promised when Beijing took back control of Hong Kong.

Chinese shoppers are among the biggest spenders

Hai tao' shopping, otherwise known as online buying from overseas, is fast growing in China as consumers are eager to buy products that are either unavailable or over-priced in their own country.

The most popular product categories bought from overseas includes skin care, colour cosmetics, women’s clothing, perfume, toys and health supplements.

According to market researcher Nielsen; 18 million Chinese shoppers spent 216 bn yuan by 'hai tao' in 2013, buying numbers that are set to rise to 35.6 m by 2018, with spending of up to 1 tn yuan.

Chinese online buyers bought the most goods from the United States followed by Hong Kong, Malaysia, Netherlands, South Korea, Denmark, Japan, Taiwan, United Kingdom, and Sweden.

Thumbnail image source: (AFP/ANTHONY WALLACE)

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