HONG KONG: Three years of democracy protests followed by a pandemic have devastated Hong Kong retailers who had grown used to relying on cash from mainland Chinese tourists.
In a city that once boasted some of the world's highest retail rents, the market has cratered, reports AFP.
Sheung Shui is the first town from the main overland border crossing and once thrived as a place where tax-free goods could be snapped up for resale back in mainland China -- a process known as parallel trading.
"People's impression of Sheung Shui is of parallel traders and mainland China," said Eugene Chan, 22, who has lived in the neighbourhood since childhood.
Chan recalled pavements swamped by people filling their luggage with cosmetics, baby formula or household supplies to meet huge demand across the border.
But all that vanished in the wake of huge democracy rallies followed by pandemic-related border closures.
In January 2019, just before the protests began, arrivals from the mainland reached an all time high of 5.5 million, a remarkable figure given Hong Kong's population is 7.5 million.
"That's a huge loss of demand," Simon Smith, senior director of research and consultancy at Savills, told AFP.
"That wave of mainland spending, particularly focused on luxury, watches, jewellery, designer goods, it really propelled rents to world-beating levels."
Hong Kong's popular shopping districts previously boasted "golden streets" where store rents were more expensive than those in New York City's Fifth Avenue.
Now, Smith said, shop rents in prime locations have undergone a "substantial correction" and regressed to 2003 levels, down more than 75 percent from peak levels in 2013.
Analysts have noted a rebalancing to more local consumption, with some prime location stores in shopping areas taken over by more budget-friendly businesses.