The retail landscape in Hong Kong is undergoing significant changes as mainland grocery chains like Hotmaxx enter the market, offering prices that local chains struggle to match. Hotmaxx debuted in Hong Kong in September 2024, providing consumers with significantly lower prices compared to established local chains such as ParknShop. For instance, a can of Coca-Cola is priced at HK$3 at Hotmaxx, while it costs between HK$9 and HK$11 at ParknShop. Similarly, a 291g pack of Oreos is available for HK$12 at Hotmaxx, compared to HK$25.90 for a 248g pack at ParknShop [bf045d1d].
This price disparity is evident in the overall shopping basket, where Hotmaxx's total comes to HK$99.50, a stark contrast to ParknShop's HK$172.6, marking a 53% difference in costs [bf045d1d]. Economists are raising concerns that local businesses may struggle to compete with such aggressive pricing strategies, which are attributed to Hotmaxx's acceptance of mainland products and its rapid expansion plans, which include aiming for over 5,000 branches [bf045d1d].
The entry of Hotmaxx comes at a time when Hong Kong's retail sector is already facing challenges, with Uselect and CR Care announcing closures due to ongoing economic pressures. Uselect is set to reduce its locations from around 100 to only 40 by October 2024, while CR Care will close all 19 of its stores in the region by November 8, 2024 [1d97302e][b118b0e8]. The overall retail sales in Hong Kong have dropped by 10.1% year-on-year as of August 2024, indicating a troubling trend for local retailers [1d97302e].
As traditional mom-and-pop shops face increasing competition from these larger chains, the community's support for local businesses becomes even more crucial. Local residents have expressed their desire to back smaller shops despite the allure of lower prices from mainland competitors. This situation raises questions about the future of Hong Kong's retail sector and the potential impact on employment and service availability for residents [b118b0e8].