The charm of luxury shopping is in the experience and few personalities are as equipped to speak on the magic, marvels and myths of Hong Kong’s luxury retail market than KARIM AZAR, General Manager of Retail Leasing in Hong Kong’s premier shopping mall – IFC (International Finance Centre). Excerpts.
It’s not just all about competition, nor is it only about volumes and margins as many would imagine. It’s not about just location, nor is it only about shopping trends or price placements. It is a combination of all these factors and much, much more says Karim Azar, General Manager of Retail Leasing in Hong Kong’s IFC Mall.
His is the unenviable task to sustain a rate of rental for Hong Kong’s premier shopping mall that keeps his customers profitable. On the other hand it’s his job to lower costs, exceed expectations and keep us all visiting and shopping. Managing such a wide range of personalities amidst constant change across a range of brands and their markets is no mean feat and one is intrigued to know just what makes Karim Azar tick and how.
Touch & Go
It’s not easy when you have some of the world’s best brand as your tenants. We have the No. 1 Apple store and fantastic brands like J. Crew, Givenchy, Moncler, Victoria’s Secret, Leica Store, L’Occitane and many more, says Karim proudly of the host of luxury brands that comprise the wonder, charm and excitement of IFC Mall.
“Every day brings excitement, challenges and the opportunity to do my best for my fellow being, I guess that’s what keeps me going,” says Karim. “Sometimes I often feel the job is more like a conductor of an orchestra and you have to work with so many different people to produce an applause-worth symphony for the shopping lovers to enjoy and for our tents to profit by. My job is to sustain the bigger picture without letting the colours run into each other unless they promise a beautiful blend.”
The Main Issues
“I think the more serious issues begin with price parity because these brands have been taking advantage of the Chinese and Hong Kong consumers for too many years. The price differences of some of these brands ranges from 20% to 100% higher here in Hong Kong than they are in their home markets.
With the Internet, this is definitely affecting their business, and they definitely have to take the long term view of price parity worldwide. The days are over where you can charge the Chinese significantly more. Now they (the Chinese) are going to Europe, America, and other places abroad where prices are much lower.
The situation is further exasperated by the weak Euro at the moment, and Hong Kong being linked to the US dollar makes this issue even higher.”
For the first time, there were more Korean visitors last year in Hong Kong (1.2 million) vs only 1 million Japanese. This has never happened before. So things are changing. It’s all about being the fastest, being on the ball. It’s all about staying in touch with your customers. I feel a lot of brands have no idea what their customers are looking for. They don’t know where the customers are coming from and they don’t know the profile of the customers well enough. These factors should be better studied in order to take sales up.”
“There is a demand and supply situation. You’ve got more people coming to Hong Kong. You’ve got a massive influx of retailers around the world coming here. That tends to push up prices. You can’t push up rents recklessly though simply because you have to keep your tenants profitable for them to be willing to stay and pay.
This has been happening which is why today you see many landlords in Causeway Bay ending up with higher vacancies than we’ve seen in Hong Kong for a long time. Less people are taking those shops at those crazy rents.
The watch retailers are doing much less business than they were before because fewer people are going there nowadays. Hong Kong used to be one of the cheapest places for watches in the world. The second biggest market worldwide, and now we have been seriously affected by the strong dollar and the weak Euro. So it’s becoming very tough to survive. The days of charging high rental from these people are over, and it’s definitely going to slow down. You look at Central. Street landlords are charging too much. They’ve gotten too greedy so we have to find better ways of making money while helping our tenants flourish. This is the tight-rope we have to walk every day.”
“Aside from trimming the fat, being more environment-friendly, offering new looks and products and keeping it fresh for the shopper, brands have to be more proactive in getting the word out. Gone are the days where consumers would seek out brands. Today, competition ensures that brands have to reach out to the shopper and attract him/her into shops. Many brands understand this concept all too well and ensure maximum visibility.”
“IFC is full of stories you wouldn’t imagine. Each store has a unique flavor, a special essence, a unique offering that is served up with a truly extraordinary level of service. You have got to uncover the gems here for your readers to enjoy. Remember, shoppers don’t just buy the brand. They buy the heritage and history of the brand. They buy into the brand’s future and past DNA. I trust this report will flesh out the spirit behind these amazing brands and help bring more of your readers to explore the treasure IFC Mall in Hong Kong has to offer.”
For additional information please visit www.ifc.com.hk
Hong Kong’s Business Leaders share market and interest intelligence in the pages of HKMVC 2016