A view of Qianhai Chow Tai Fook Global Goods Shopping Centre, or CTF HOKO, on Monday - its opening day - in Qianhai, Shenzhen. Chai Hua / China Daily

Shenzhen shopping center opens as part of efforts to ease pressure on SAR

Shenzhen has taken its first bold step to tackle the problem of mainland shoppers swarming into Hong Kong's retail facilities, with the opening of the Qianhai Chow Tai Fook Global Goods Shopping Centre, or CTF HOKO - the city's new concept shopping mall.

The first phase of the project, run by Hong Kong-based property development, hotel and jewelry group Chow Tai Fook Enterprises Ltd, went into full swing on Monday on a trial basis, drawing hordes of customers lured by tempting prices that are comparable to, or even lower than Hong Kong's, as well as the wide variety of goods on offer.

The phase one of CTF HOKO boasts more than 20 stores, including Chow Tai Fook itself, cosmetics retailer Sa Sa, Maxim's Cakes, clothes retailer ISA, medicine store Eu Yan Sang and several cross-border e-commerce stores peddling global brands.

According to CTF Executive Director Adrian Cheng Chi-kong, up to 80 percent of the goods available at HOKO stores cost virtually the same as those in Hong Kong, with some even cheaper.

While a 50-milliliter Dior perfume sells for about HK$710 in Hong Kong, or about 587 yuan ($91.6), it is tagged at only 470 yuan at HOKO's Sa Sa store. Another item popular with mainland shoppers, a pack of Merries diapers, goes for 120 yuan at one of the cross-border e-commerce stores, while its regular price is about HK$179, or 148 yuan, in the SAR.

Cheng explained that the company is offering rental discounts for HOKO stores in the early stages, and will carry out random checks to ensure that prices are kept comparatively low.

However, some consumers said they found some of the products on sale at HOKO still cheaper in Hong Kong.

Some mainland consumers have also found a smarter way to save money.

Cheng Qiumei, who visited the CTF store at HOKO on its first day of business, told China Daily she had gone there to check it out if there is anything she liked, but did not plan to buy anything.

"I can buy an item online for the same price as in Hong Kong after trying it out at the store and have it delivered to my home," she said.

CTF HOKO adopts an O2O (online-to-offline) business model, combining bonded goods on display and a cross-border e-commerce platform. Consumers can select their goods on www.ctfhoko.com or its mobile phone application, and have them delivered to their addresses for free.

Under the cross-border e-commerce model, products with an import duty of less than 50 yuan are exempted from taxes under the cross-border e-commerce trade preferential policy, while mainland customs normally levy a 17-percent value-added tax on imported goods.

According to Adrian Cheng, about 100 brand retailers are queuing to set up shop under the project's second phase, which is expected to be completed by April next year and open in June.

However, Guan Wenbo, manager of one of the cross-border e-commerce stores at HOKO, said he did not see many customers snapping up baby formula milk powder or diapers although there is no limit placed on the amount that can be purchased.

grace@chinadailyhk.com

(HK Edition 12/08/2015 page8)