Research note
Tourism shopping and its contributions to Hong Kong
Introduction
Tourism plays a very important role in the economy of Hong Kong. It is now earner of foreign the biggest exchange. The number of visitors has increased from 3.7 million in 1986 to nearly 10.2 million in 1995. Total tourism receipts in 1YYS were HK$74.9 billion, four times as much as in 1986.’ Tourism revenue represents consistently about 6% of the GDP (Gross Domestic Product). Half of the tourist expenditure is on shopping. Tourism industry is contributing significantly to the retail trade in Hong Kong. For some visitors, shopping in Hong Kong has become the sole purpose of their visit. Tourism shopping*, therefore, is not only a major source of income from foreign visitors, but can itself provide a powerful attraction to bring them to Hong Kong. There arc seven major market areas for Hong Kong tourism: Europe (the UK, Germany, France and Italy), North America (the USA and Canada), Japan, Oceania (Australia and New Zealand), South East Asia (the Philippines, Indonesia, Thailand, Singapore and Malaysia), Taiwan and mainland China. In the 1980s North America, Europe and Japan were the three major tourist markets. Changes have been taking place over the past decade in terms of tourist markets, visitor characteristics, purpose of visits, choice of accommodation and visitor spending patterns. In recent years, Taiwanese and mainland Chinese tourists have led European and American tourists as the major markets for the Hong Kong tourism industry. The Asian markets (visitors from Taiwan, mainland China and Japan) have taken over from the Western markets (visitors from North America and Europe) as the major contributors. In 1995, over 70% of visitors came from Asia and mainland China, compared with 25% from North America, Europe and Oceania. These three markets contributed over 50% of the total receipts from tourism in 1995. Hong Kong has been the gateway to mainland China for many Taiwanese travellers since the Taiwanese government lifted the bans on Taiwanese nationals visiting China in 1987. Previously, Hong Kong could be visited. but only on the way back to Taiwan from another place, and any travel to China was totally banned. With the lifting of these travel restrictions, the number of visitors increased from 176,617 in 198.5 to 1,761,lll in 1YYS(an almost ten-fold increase). The rise of China’s economy and living standards, plus closer links with China, have crcatcd significant new opportunities for Hong Kong tourism over the past few years. According to the HKTA (Hong Kong Tourist Association) Visitor Arrival Statistics in 1995, mainland China led Taiwan as the largest single market for Hong Kong tourism, with 2.2 million visitors, which accounted for 22% of arrivals. The HKTA sees total mainland China as one of its biggest growth markets, with ever-increasing visitor arrivals from the mainland as the key to the long-term health of its tourism industry.

Method
In order to gain insights into the profile and levels of contribution by different market areas, the HKTA conducts regular surveys on the tourists’ spending patterns and main shopping items. The surveys were conducted inside the restricted areas of the departure hall at the Hong Kong International Airport, where tourists were waiting for boarding. Surveys were also conducted at the Kowloon terminus of the Kowloon Canton Railway and the China Hong Kong City Pier for visitors from mainland China. Quota sampling methods were adopted in which tourists were categorized by their country of residence and gender. Personal interviews were used. Subjects were asked about main items bought, amount spent, first-time or repeat travellers, lengths of stay and future intentions of returning to Hong Kong. The data collected were analysed by descriptive statistics.

Results
In 1976, Japan was the largest contributor to shopping expenditure (28%) followed by South East Asia and North America. In 1985, Japan, North America and South East Asia were still the three largest contributors, with North America in first place. However, in 1995, Taiwan had become the biggest contributor, accounting for 25% of the total tourist spending on shopping (7&h/e I). Visitors from the mainland (Hong Kong’s largest source of tourism in

*Tourism shopping is defined as ‘the expenditure on goods purchased in Hong Kong, by international visitors, either for consumption in Hong Kong or for export but not including expenditure on food. drink or grocery items’.’

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Tourisn~ shopping and its contributions to Hong Kong: V C S Heung and H Qu
Table 1 Regions

Percentage of shopping contribution by major markets in 1976, 1985 and 1995
1976 1985 1995

Japan S.E. Asia N. America Europe Oceania Taiwan China S. Korea Others To tal

28.46 17.6 16.54 9.21 12.24 6.14 N.A. N.A. 9.81 100.0

18.23 17.6 26.88 8.94 12.16 4.88 N.A. N.A 11.28 100.0

2//.45 13.87 4.89 6.75 2.16 25.18 22.62 2.53 1.55 100.0

Source: HKTA, A Statistical Review o[" Tourism, 1977, 1986 and 1996. terms of arrivals) spent HK$8.4 billion in shopping in 1995, an increase of 39.6% over 1994. Japanese tourists spent 7.7% more than in 1994, with shopping receipts totalling HK$7.5 billion. The biggest spenders in 1995 were the Taiwanese, whose shopping contribution amounted to HK$ 9.3 billion. Europeans showed a 12% increase, compared with a drop of 2.4% in 1994 over 1993. North American market showed an increase of 8.6% in 1995 over the previous year, which had the biggest negative growth of 18.9% over 1993. European and American tourists spent HK$2.2 billion and HK$1.8 billion in 1995, respectively. In terms of per capita spending, the Taiwanese had the biggest increase over the past decade while the North Americans showed the biggest decrease. Taiwanese tourists spent an average of HK$5299 per person on shopping in 1995. A comparison of the spending patterns by these market areas in 1995 indicates that Asian visitors (S.E. Asia, China, Taiwan and Japan) spend the majority of their money on shopping, while visitors from Western countries (the USA, Canada and Western Europe) spend more on accommodation (Table 2). Taiwanese and mainland Chinese spent 61% of their money on shopping, while North Americans spent about 28%, with European and Australian in the middle, accounting for 32 and 37%. In terms of expenditure on accommodation, North Americans spent 52% of the money, followed by Europeans and Australians. Taiwanese and mainland Chinese showed 18.9% and 18.7%, respectively.

Shopping patterns of tourists in Hong Kong
According to the Hong Kong Tourist Association (HKTA), over 1.7 million mainland Chinese visitors came to Hong Kong in 1993, representing a 50.8% increase over the previous year,

and was the second largest source of visitors to the territory, accounting for 19.4% of total arrivals, slightly less than Taiwan's 19.9%. As shown in Table 3, the most popular tourist shopping product category in 1976 was jewelry, followed by garments and clocks/watches. These three product categories together accounted for over 60% of total tourist spending on shopping. In 1985, the most popular product category was garments. Tourists spent a total of HK$ 1.78 billion on this category, or 27% of total tourist shopping expenditure. The second and third most popular items were jewelry, leather goods and clocks/ watches. In 1995, the most popular category continued to be garments, again followed by jewelry and leather goods. These three categories accounted for 73% of total tourist shopping expenditure. Garments have been the most popular shopping items in the past 10 years, which may be due to the wide variety and competitive prices that are offered in Hong Kong. Hong Kong, for many years an entrepot for goods entering and leaving China, has been the chief beneficiary of increased travel within Greater China. Since 1987, when the Taiwanese government relaxed its prohibition on visits to the mainland, thousands of Taiwanese residents have flocked to China, usually via Hong Kong. In recent years, Taiwan has been the territory's largest source of tourists and tourism revenue.' In 1996, 1.8 million visitors from Taiwan were recorded, a 3.4% increase over

Table 2 Regions

Visitor spending pattern by major market area 1995
Shopping % Hotel Bills % Meals Outside Hotels % Tours % Other % Total %

Japan S.E. Asia N. America Europe Oceania Taiwan China S. Korea Other Total

7580.93 5143.22 1813.78 2501.03 798.64 9332.16 8386.39 936.80 575.44 37068.39

53.7 51.0 27.9 31.9 37.1 61.7 61.0 42.9 48.5 50.8

4030.04 2976.55 3388.10 3595.54 931.08 2850.29 2566.63 687.03 377.60 21411.86

28.6 29.5 52.0 45.9 43.5 18.9 18.7 31.5 31.8 29.4

1239.38 1183.45 765.97 1022.74 233.97 1702.80 1783.43 290.18 131.67 8353.59

8.8 11.7 l 1.8 13.0 10.9 11.3 13.0 13.3 11.1 11.5

728.4tt 246.25 144.66 234.92 56.17 258.18 346.28 87.64 35.95 2138.65

5.2 2.4 2.2 3.0 2.6 1.7 2.5 4.0 3.0 2.9

531.85 532.90 396.96 490.27 127.84 976.85 663.56 180.65 66.24 3967.12

3.7 5.3 6.1 6.2 5.9 6.5 4.8 8.3 5.6 5.4

14.110.60 10,082.37 6509.47 7847.50 2153.70 I5,120.28 13,746.29 2182.50 1186.9/I 72939.61

100 1110 100 100 100 100 i00 100 100 100

Note: Figures in HK$ Million. Source: HKTA, A Statis'tical Review (Jf Tourism, 1996.

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Tourism shopping and its contributions to Hong Kong." V C S Heung and H Qu

Table 3 Expenditure on main shopping categories
1976 Million HK$ % 1985 Million HK$ % + % 1995 Million HK$ % + %

Clothing and footwear :' Garments Jewelry Leather Perfume Cosmetics Sub-total Foodstuffs/AlcohoP Alcohol Foodstuffs Medicine/Herbs Sub-total Other durable goods' Clock/watches Camera/Optical goods Sound Eqp./Electrical Souvenirs/Handcrafts Toys Sub-total Total

316 525 108 40 N.A. 989 82 N.A. N.A. 82 237 167 91 113 17 625 1696

18.6 31.0 6.4 2.4 N.A. 58.4 4.8 N.A. N.A. 4.8 14.0 9.8 5.4 6.7 1.0 36.9 100.0

1783 1552 578 148 91 4152 273 121 114 509 462 540 366 479 81 1928 6588

27.1 23.6 8.8 2.2 1.4 63.1 4.1 1.8 1.7 7.6 7.1t 8.2 5.6 7.3 1.2 29.3 100.0

+462 + 196 +435 +270 N.A. +320 +233 N.A. N.A. +519 +95 +223 +302 +324 +376 +208 +288

12,886 6966 5498 570 1237 27,157 548 833 588 1969 2//111 1406 968 1090 N.A. 5474 34,61/0

37.2 20.1 15.9 1.6 3.6 78.4 1.6 2.4 1.7 5.7 5.8 4.1 2.8 3.2 N.A. 15.9 100.0

+623 +349 +851 +285 + 1260 +554 + 101 +588 +416 +288 +335 + 16(t + 165 + 128 N.A. +184 +425

"Clothing, footwear and allied products. "Foodstuffs, alcoholic drinks and tobacco. ~Other durable goods and consumer goods. Source: HKTA, A Statistical Review of" Tourism, 1977-1996.

the previous year. Taiwanese tourists accounted for 15.6% of total visitors to Hong Kong and 16.7% of total tourist spending in the territory, the third largest single market in 1996. In 1993, over 1.7 million visitors from China came to Hong Kong, a 50.8% increase over the previous year. In 1994 and 1995, the increases were 12.2 and 15.4%, respectively. A relaxation of Chinese travel restrictions and an increase in entry quotas granted by the Hong Kong Immigration Office are the likely reasons for this increase. In the past, the Chinese government granted passports only to citizens travelling abroad to study, conduct business or visit relatives. Now, Beijing is easing travel restrictions and allowing more Chinese travel agencies to lead tour groups abroad. Hong Kong and Macau, along with other Asian countries, clearly stand to profit from this liberalization. In 1996, China was the largest spender in shopping, followed by Japan and Taiwan. Overseas visitors from Japan, Taiwan and the mainland in particular, lead the spending spree, so even when the local market is

depressed, the overseas factor keeps the luxury end of the market afloat? For 1996, 49.5% or HK$ 40.9 billion of total visitor spending in the territory went to retailers. China was the second largest source of visitors to the territory in 1995, accounting for 19.7% of total arrivals, slightly less than Japan's 20.4%. As China further reduces its travel restrictions on its people and on foreigners, Hong Kong is expected to reap the benefits of tourist traffic to and from China? It is not surprising therefore, that China will continue to be the dominant market for the Hong Kong tourism industry and tourism shopping in the near future.

Conclusions and implications
Rcscarch into the shopping patterns and shopping behavior of tourists provides us with useful information for tourism planning and promotion. As tourism shopping is closely related to retail trade, there is a need to foster co-operation between tourism

and the retail industries. The information is of particular use for training personnel in the tourism and related industries. Consumcr laws should bc enforced to protect tourism shoppers. Tourism shopping should form part of the overall tourism development and marketing plan. Tourism shopping malls or villages should be developed to further strengthen Hong Kong as a shopping destination. As Jansen Verbeke" pointed out, 'the competition between the shopping paradises is becoming extremely fierce to the extent that only those which can offer a complete tourist product will survive. This reality needs to be faced by many tourism promoters, who tend to see shopping as a tourism resource'. The economic significance of tourism shopping should not be neglected, particularly at times when there are slumps in the resident retail markct.

Further research
Further research on the reasons for the decline of Western markets on

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Tourism shopping and its contributions to Hong Kong. V C S Heung and H Qu tourism shopping expenditure, their levels of satisfaction on shopping and the determinant factors influencing shopping demand could provide more information for tourism planners. 3. Shopping Implementation Committtee, Australian Govt. Publishing Service, 1990, 8-9. Lung, S Y, The China tourism triangle. The China Business Review 1993, 20(5), 52-53. Stewart, R, Bumpy ride for retailers. Executive 1995, 16(3), 20-26. Heung, V C S, The Hong Kong tourism industry in transition: challenges and opportunities. Cornell H.R.A. Quarterly 1997, 38( 1), 51-59. Jansen-Verbeke M, Leisure Shopping: A magic concept for the tourism industry. Tourism Management, 199k March, 9-14.

Vincent C. S. Heung Department of Hoteland Tourism Management The Hong Kong Polytechnic University Hung Hom Kowloon Hong Kong Hailin Qu Department of Hospitality Management San Francisco State University San Francisco California USA

4. 5.

References
1. HKTA, A Statistical Review of Tourism, 1977-96. 2. AGPS, Tourism shopping in the nineties. Report of the Tourism 6.

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