LCQ9: Long-term development of the retail industry


Hong Kong (HKSAR) -      Following is a question by the Hon Shiu Ka-fai and a written reply by the Secretary for Development, Mr Eric Ma, in the Legislative Council today (May 17):
 
Question:

     Regarding the long-term development of Hong Kong's retail industry, will the Government inform this Council:
 
(1) of the total floor area of the retail shops in Hong Kong in each of the past 15 years, with a breakdown by the capacity (i.e. private entities, the Hong Kong Housing Authority and the Hong Kong Housing Society)of the owners of the properties where the shops were located;

(2) of the projected total floor area of the retail shops in Hong Kong in each of the coming 10 years, with a breakdown by the capacity (i.e. private entities, the Hong Kong Housing Authority and the Hong Kong Housing Society) of the owners of the properties where the shops are located;

(3) whether it assessed, in the past five years, the demand for floor areas of retail facilities and shops; if so, of the assessment method and outcome;

(4) of the percentage of tourists' spending in Hong Kong in the value of total retail sales in each of the past five years (with a tabulated breakdown by major type of retailers);

(5) given that the Planning Department conducted in 1996 and 2005 respectively the Review on Shopping Habits (which comprised surveys on households and retailers as well as structured meetings with major stakeholders) with a view to understanding the shopping habits of Hong Kong people and the perceived retail hierarchy, whether the authorities have plans to conduct such a review afresh to provide reference information for the long-term developmentof the retail industry; if so, of the details; if not, the reasons for that; and

(6) given that in announcing the outcome of the Review on Shopping Habits conducted in 2005, the authorities indicated that online shopping was not prevalent and was not expected to become popular in thefuture in Hong Kong, whether the authorities have plans to conduct in-depth studies on online shopping; if so, of the details; if not, the reasons for that?

Reply:

President,

     The retail industry, constituting one of the major economic activities in Hong Kong, is categorised as a commercial use in terms of land use.

The Government has been monitoring the market demand for commercial floor space and is committed to increasing the supply of sites, space and hardware for economic uses in order to facilitate the developments of different economic activities and maintain Hong Kong's competitiveness. At present, the Government does not have any specific policy for retail as part of the commercial activities. The development and choice of commercial uses for economic land and floor space would more appropriately be market-driven, which allows business operators to respond to the fast-changing market situations and make timely and flexible decisions.

The existing planning system, including the statutory plans, has embodied sufficient flexibility to facilitate retail activities in many land use zones. For example, "retail shops" is an always permitted use on the land zoned "Commercial" in the Central Business District and major shopping areas. In the "Residential (Group A)" zones, retail shops are also always permitted in the lower three storeys of buildings. Developers can also propose change of land use for sites considered suitable for development of retail business via planning applications.

     Having consulted the Commerce and Economic Development Bureau, Innovation and Technology Bureau, Office of the Government Chief Information Officer, Rating and Valuation Department (RVD), Census and Statistics Department (C&SD), Housing Department (HD) and Planning Department (PlanD), my replies to different parts of the question are as follows:
 
(1) and (2) According to the information of RVD, statistics of the total stock for the private retail premises at the year-end of 2003-2016 are listed in Table 1 below.

Table 1: Private Retail – Stock at Year-end (2003 - 2016)*
                    Floor Area ('000 sq m)#
 
District 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Central & Western 983 976 977 975 968 968 972 972 979 989 982 986 992 964
Wan Chai 821 825 826 804 809 813 812 828 863 893 900 900 920 972
Eastern 651 651 651 651 652 657 656 658 658 657 658 659 663 617
Southern 183 184 186 187 187 187 189 189 195 203 202 203 202 202
Hong Kong 2638 2636 2640 2617 2616 2625 2628 2647 2696 2742 2742 2748 2778 2755
Yau Tsim Mong 1523 1562 1565 1603 1616 1618 1674 1707 1719 1725 1728 1733 1731 1754
Sham Shui Po 559 562 569 572 579 587 587 588 588 592 594 602 611 611
Kowloon City 631 591 592 601 601 603 616 610 611 617 615 614 623 630
Wong Tai Sin 284 282 284 286 287 288 288 305 295 311 312 312 310 316
Kwun Tong 553 579 581 637 648 654 574 577 577 597 592 595 629 636
Kowloon 3549 3576 3590 3699 3730 3751 3739 3786 3790 3841 3841 3856 3904 3947
Kwai Tsing 313 313 313 313 309 312 312 312 312 313 314 315 322 322
Tsuen Wan 416 435 443 444 464 459 468 453 455 455 455 462 465 465
Tuen Mun 373 375 378 378 378 386 378 378 378 397 397 395 394 396
Yuen Long 404 404 406 406 413 413 408 421 424 424 429 427 431 469
North 214 214 213 214 215 215 214 215 215 215 215 228 227 227
Tai Po 209 209 211 211 211 211 211 211 211 210 213 212 216 216
Sha Tin 428 432 432 432 437 438 441 441 441 442 451 451 463 469
Sai Kung 251 253 255 271 271 271 272 272 285 285 285 290 292 305
Islands 187 190 191 209 286 290 292 293 293 297 295 295 300 299
New Territories 2796 2826 2842 2878 2983 2996 2996 2995 3015 3037 3054 3075 3109 3168
Overall 8982 9038 9073 9195 9330 9371 9363 9429 9500 9621 9637 9679 9791 9870

* RVD does not have the relevant statistical data in 2002 or the breakdown by ownership.

# Measured on the basis of "internal floor area" which is defined as the area of all enclosed space of the unit measured to the internal face of enclosing external and/or party walls.

Notes: Private retail stock is based on rating records.

The sum of individual items might not add up to the respective total because of rounding.

Source: RVD

     Retail as part of the commercial activities is an industry with ever-changing market conditions, and the use of economic sites and floor space for retail purposes is a market-driven commercial decision. The Government does not have a forecast of retail floor space in the future.
 
     On the other hand, from 2006-07 till now, the total internal floor area of retail shops under the Hong Kong Housing Authority (HA) is listed in Table 2 below. Since HA only maintains the relevant information from 2006-07 onwards, we are unable to provide the information before then.

Table 2
 
Year Total Internal Floor Area
of Retail Shops under HA (sq m)
2006-07 141 800
2007-08 153 400
2008-09 145 200
2009-10 154 200
2010-11 155 000
2011-12 163 600
2012-13 185 300
2013-14 192 900
2014-15 197 100
2015-16 201 700
2016-17 213 000
Source: HD

     The estimated total internal floor area of retail shops under HA for the period from 2017-18 to 2020-21 is listed in Table 3 below. However, the figures are subject to change due to alternation or renovation of existing premises or change in the detail designs of new projects.

For HA projects estimated for completion in 2021-22 and afterwards, most of them are still at the stage of preliminary planning and design, thus we are unable to provide the relevant information at this stage.
 
Table 3
 
Year Estimated Total Internal Floor Area
of Retail Shops under HA (sq m)
2017-18 226 900
2018-19 239 500
2019-20 254 800
2020-21 273 400
Source: HD

     The total internal floor area of commercial (including retail) use in properties under the Hong Kong Housing Society (HKHS) in the past 15 years and the estimated total internal floor area of commercial (including retail) use in properties under HKHS in the coming 10 years are listed in Tables 4 and 5 below respectively.
 
Table 4
 
Year Total Internal Floor Area of
Commercial Use under HKHS (sq m)
2002-03 92 703
2003-04 92 703
2004-05 92 703
2005-06 92 703
2006-07 92 703
2007-08 92 703
2008-09 92 703
2009-10 92 703
2010-11 92 703
2011-12 92 703
2012-13 92 703
2013-14 93 312
2014-15 93 312
2015-16 95 759
2016-17 98 913
Source: HKHS

Table 5
 
Year Estimated Total Internal Floor Area of
Commercial Use under HKHS (sq m)
2017-18 100 077
2018-19 100 077
2019-20 101 217
2020-21 101 866
2021-22 101 866
2022-23 107 256
2023-24 109 009
2024-25 109 009
2025-26 110 269
2026-27 110 269
Source: HKHS

(3) and (5) PlanD conducted a "Study on Shopping Habits" in 1995 with regard to the development of the society at that time. The aim of the study was primarily to look into the shopping habits and trends of Hong Kong people at that time in order to facilitate appropriate revisions to the standards and guidelines on retail facilities in Chapter 6 of the Hong Kong Planning Standards and Guidelines (HKPSG). Subsequently, PlanD conducted another study called the "Review on Shopping Habits" in 2004 to identify the shopping choice habit and expectation of Hong Kong people.

It also explored the new trends in the retail sector at that time, including assessment of the impact of the cross-boundary shopping activities and new shopping modes such as e-shopping, on the provision of retail facilities, in order to facilitate further revision of the relevant planning standards and guidelines.
 
     In light of the findings and recommendations of the two studies on shopping habits, the standards and guidelines on retail facilities in Chapter 6 of HKPSG were revised in 1998 and 2009 as appropriate. The revisions included setting out the shopping preference and trend of the general public; the retail hierarchy; the broad approach for estimating the demand for retail facilities; and the main considerations of retailers and developers in the development of retail facilities. The guidelines stress that retail development is primarily market-driven and should be effectively addressed by the private sector in response to market situation. In this connection, the relevant planning standards and guidelines mainly serve as a reference and should be applied with flexibility.

At present, the relevant bureau and departments do not have any plan to further revise the said standards and guidelines concerning retail facilities, and PlanD has no plan to carry out another study on shopping habits. The Government will continue to make reference to the data compiled by C&SD and relevant market researches to closely monitor the development of retail industry in different aspects.
 
     It is noteworthy that the above studies were not intended to assess the demand for retail facilities and their floor space. As mentioned above, the Government has been working vigorously to increase land supply for different economic activities, including land and floor space for commercial uses.

The existing planning system has provided retail business operating on commercial floor space with adequate flexibility. Since the use of commercial floor space for retail use is a market-driven commercial decision, solely assessing the demand for retail floor space is not meaningful.
 
(4) According to the information of C&SD and the Hong Kong Tourism Board, the total spending on goods in Hong Kong by visitors is estimated to be around 35 per cent to 42 per cent of the total value of retail sales in Hong Kong from 2012 to 2016 (Table 6 below). In addition, as the categorisation of the total visitors' spending on goods is different from that of the total values of retail sales, the respective share by broad type of retail outlet is not available.
 
Table 6
 
  HK$ (million)
2012 2013 2014 2015 2016
(i) Total spending on goods in Hong Kong by visitors 158,131 189,345 208,883 182,833 150,889
(ii) Total value of retail sales 445,498 494,451 493,236 475,156 436,623
Share (i)/(ii): 35% 38% 42% 38% 35%
Source: C&SD and Hong Kong Tourism Board

(6) C&SD has conducted a series of the "Thematic Household Survey on Information Technology Usage and Penetration" on an annual basis since 2000.

Information on usage of online purchasing services has been collected once every two years and the latest round of the survey was conducted during April to July 2016. Based on data collected through the latest round of the survey, some 1 701 200 persons aged 15 and over in Hong Kong had used online purchasing services for personal matters during the 12 months before enumeration, constituting 27.8 per cent of all persons aged 15 and over in Hong Kong.

     On the other hand, C&SD has also conducted a "Survey on Information Technology Usage and Penetration in the Business Sector" to collect information relating to information technology usage and penetration from establishments in the business sector. The survey was conducted annually from 2000 to 2009, and has been conducted once every two years since 2013.

Based on data collected through the latest round of the survey, the value of business receipts from selling of goods, services or information through electronic means amounted to $400.6 billion in 2014, representing 4.7 per cent of the total business receipts of all selected industry sectors in 2014.



Published on: 2017-05-17

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