Cross-border consumption becomes trend for HK young people amid reopened borders

Shopping mall managers share marketing strategies attracting Hong Kong youths

Economist Terence Chong said it is not feasible to replicate the mainland's business modes

It was 11:57 at night when Ho Tsz-lok emerged at the Lo Wu border breathlessly, clutching a bag of cakes bought from Master Bao in one hand and a cup of yogurt from More Yogurt in the other.

Master Bao and More Yogurt are both popular Mainland China brands, selling innovative styles of pastry and yogurt respectively.

After a day filled with indoor games, hot pot, and shopping with friends, Ho sprinted out of the Karaoke and hailed a taxi just in time to catch the last few minutes of the border opening back to Hong Kong.

The 21-year-old, currently a college student in Hong Kong, has picked up the habit of spending north in the mainland two to three times a month as before the Covid pandemic.

The city he visits most often is Shenzhen, where he generally just goes for food, drink and entertainment to relax.

“It’s much more expensive in Hong Kong. For a usual day in Shenzhen, I’ll spend about HK$200-300, but to do the same things back home would be over HK$500,” Ho said.

Since February 2023, Hong Kong and mainland China have fully resumed cross-border travel, sparking a wave of cross-border consumption. More locals have opted to head north for weekends or holiday leisure, which especially becomes a popular trend among young people.

The latest figures from the Immigration Department showed that in the first half of November, more than 2.64 million Hong Kong residents travelled to mainland China using land checkpoints, with significantly higher numbers observed on weekends compared to weekdays. The figure was more than three times the number of mainland visitors who came to the city during the same period.

According to HKTDC, the surging number of Hongkongers spending across the border was a form of “retaliatory consumption” to release the long-accumulated demand for northbound consumption during the Covid. The trend is a natural return to the normal state because Hong Kong and Shenzhen have already been having frequent communication before Covid.


Shenzhen’s retail market also confirmed this trend. In the first half of this year, the total retail sales of consumer goods in Shenzhen surpassed 500 billion Chinese yuan, marking an 11.5 percent increase compared to the same period last year. Retail sales and catering have grown by 11.6 percent and 20 percent respectively.

Economist Terence Chong Tai-leung, executive director of the Chinese University of Hong Kong’s Institute of Global Economics and Finance, acknowledged the trend that the entire population of Hong Kong is heading north to consume. He said the situation is mainly due to economic reasons.

“Transportation has become much cheaper compared to the past,” he said, explaining that the government has implemented new policies for the elderly - 
the $2 Scheme, allowing residents aged 60 and above to travel for only HK$2.

As another recent policy to boost cross-border communication, 
MTR is offering a time-limited northbound fare discount. From 1 November to 29 February next year, which covers Christmas and Chinese New Year that are suitable for travelling, passengers can enjoy a 30 percent fare discount if they enter the station after 9:00 a.m. via designated stations and exit via Lo Wu or Lok Ma Chau Station.

“Previously, a round trip to Shenzhen might cost over HK$50, but now it can save dozens of money for transportation,” said Chong.

Another factor contributing to the lower cost is that the Hong Kong dollar has continued to appreciate against the Chinese yuan in the second half of this year, as pointed out by Chong.

“The Chinese Yuan (CNY) is relatively cheaper now due to the exchange rates, making consumption to the north more attractive,” said Chong, illustrating with example that Singaporeans often travel to Malaysia on weekends for the same reason.

Esther Chan, 20, travelled to Shenzhen almost every weekend to enjoy a different consuming experience from Hong Kong. She often went there for a massage or manicure.

“I love to hang around the lanes while having some snacks from roadside stalls,” recalled Chan, saying that it was hard to get this kind of leisure in Hong Kong.

Rossana Lau who studies at CityU went to Shenzhen mainly to attend the performances or events she liked.

“Many singers I like are based in the mainland, so if they deliver a live concert in Shenzhen, I will definitely go,” said the 22-year-old.

The last time she went to the mainland was for a concert of Kelly Yu Wenwen, a Chinese Canadian singer.

As stated by Professor Chong, the motivation for young people to consume northward is not just about the price difference but the uniqueness of Shenzhen.

“The main focus is on consuming things that Hong Kong does not have and that are of good quality,” he said, “There are many kinds of items that young people would like, such as drinks and trendy gadgets.”

“As to the political factor that we all think will influence the cross-border consumption, that is temporary.”

“In 2019 and 2020 young people talked about the ‘yellow economy circle’ and boycotting the mainland economy, but now they are travelling north for consumption themselves,” said Chong, indicating that people’s political ground is a separate matter from seeking high cost effectiveness. If the value is good, they will go for it.

This trend of Hong Kong young people consuming north has also been noticed by shopping malls in Shenzhen, which have adopted corresponding marketing strategies towards them as well.

According to The Mixc, one of the most popular shopping malls among Hong Kong visitors in Shenzhen, its number of registered members using Hong Kong ID or Home Return Permit grew 10 percent during this summer vacation to about 660 compared to the figure in May. The total consumption value of Hong Kong consumers also increased by approximately 30 percent.

“We provided registered members from Hong Kong with no-threshold shopping vouchers and gifts such as canva bags and doll blind boxes,” said Zhong Nan, the Operation Manager of Shenzhen Mixc.

The mall also collaborates with WeChat Pay and Alipay HK, providing exclusive shopping vouchers for Hong Kong visitors, including dining discounts and cash vouchers.

The most recent report released by AlipayHK in the first week of May showed the transaction volume via AlipayHK in mainland China increased by nearly 50 percent compared with the previous week. The usage of AlipayHK’s cross-border vehicle code also increased by nearly 70 percent.

Zhong revealed that Hong Kong visitors are particularly interested in dining and entertainment activities at the malls, and these two sectors make Shenzhen stand out.

“Hong Kong already has an abundance of luxury goods and cosmetics, and mainland China does not have a price advantage in these areas. However, our dining options may be more diverse and affordable compared to Hong Kong’s,” Zhong noted.

Leisure activities such as cinema and selfie spots are also appealing to Hong Kong visitors, “Bay de Luna is one of the visitors’ favourite selfie spots. They queue up at these spots to take photos, thereby attracting more footfall to our mall,” said Zhong.

Qiao Yongcheng, the vice president of another large-scale shopping mall Teemall at Lo Wu, shared similar opinions with Zhong.

“Hong Kong’s retail is quite developed, so we don’t have an advantage in the retail sector. Our strengths lie more in the experience-oriented categories, such as beauty spas, dining, and entertainment.”

Teemall, built on the previous Kingway Brewery factory, has now integrated brewery elements and transformed the factory into a venue for exhibitions and activities.

“We have kept fermentation barrels, water towers, and sewage treatment pools, and changed the colour of the wall to brick red so it looks trendy to share on social media.”

“Many young people like to come here to take photos and check in,” said Qiao.

To attract more customers from Hong Kong, Teemall has also formed a collaboration with the Lo Wu District government which served as one stop on the food journey route of free shuttle buses for Hong Kong tourists departing directly from Lo Wu Control Point.

Earlier this month, the government lowered its economic growth projection for the full year. It now expects GDP growth for 2023 as 3.2 percent, from 4 - 5 percent in the August round of review taking into account the actual outturn in the first three quarters.

However, Chong said the trend of Hong Kong people spending north did not threaten the city’s recovering economy.

“As a financial centre, 22 percent of Hong Kong’s economy relies on finance and 17 percent on imports,” he explained. “Cross-border consumption only accounts for a very small portion, so travelling north for consumption does not necessarily affect the economy.”

He added the retail industry, and the food and beverage sector both showed growth compared to the same period last year.

“The consumption of Hong Kong people travelling north will definitely promote integration within the Greater Bay Area,” said Chong.

Chong believed the responsibility lies with businesses, not the government, to retain consumers. Measures may include lowering prices, being innovative on the products and improving the service attitude.

Chong also pointed out that mainland China is more advanced in terms of technology applications.

“For example, you can directly pay on your phone after ordering, while the synchronisation of electronic payments and electronic ordering in Hong Kong is not as common.”

“The KTV rooms in mainland China are larger, with bigger screens and AI assistance for scoring, for which Hong Kong has not been that developed.

However, he noted that popular mainland companies with innovative and proactive business approaches such as No.79 Yuchuan Seafood Theme Restaurant may face challenges of high cost if opening in Hong Kong.

“Directly replicating popular mainland business modes may not be feasible. Hong Kong needs to develop based on its own situation,” he said.

Thanks for reading.
Guided by Denise Tsang.