HONG KONG – At the height of Hong Kong's prodemocracy demonstrations last month, jewelry chain Chow Sang Sang Holdings International had to shut down two of its five stores along a stretch of Nathan Road in Mong Kok.
The busy area, one of three locations still blockaded by protesters, commands some of the highest retail rents in the city. Yet with 56 outlets across the city selling gold and Rolexes, the company has weathered the disruptions as its other outlets benefited from displaced business.
"We lost about 350 hours of business, but truth be told, that's not very significant," said company chairman Vincent Chow. "Mong Kok is tense in the sense of people having confrontations with the police, but they are not intent on looting and rioting."
Chow Sang Sang's resilience is not an isolated case. There's plenty of evidence that belies dire warnings by the Chinese government and prominent Hong Kong business leaders that the student-led demands for free elections would spell disaster for the city's economy and international reputation.
Three busy city locations have been blockaded by protesters, snarling traffic and disrupting local commerce. Hong Kong's benchmark Hang Seng has shrugged off protests, closing little changed on Oct. 31 and up 1 percent since the last trading day before the protests. Tourist arrivals were up 11.4 percent year-on-year from Sept. 29 to Oct. 16, and property sales remain strong.
An October report by real-estate services company Savills found spending has merely shifted from occupied areas to other locations. "At the moment, it doesn't seem as if people are being turned off," said Simon Smith, head of research at real estate services company Savills who notes that mainland Chinese tour group arrivals were up 31 percent year on year from Sept. 29 to Oct. 16 period. "Even though protests are focused in core areas and represent an inconvenience, there are still other places that can be visited."
While large chains can weather the impact of slower sales at a handful of stores, small retailers are feeling the pain. A survey released by the Hong Kong Retail Management Association on Oct. 6 said sales at some small and medium-sized shops plunged during China's Golden Week at the beginning of October.
Across Victoria Harbour in Admiralty, it's business as usual at the 24-hour McDonald's restaurant. Located directly across from where protesters have erected hundreds of tents, it was temporarily closed on Sept. 29 when supplies were blocked after police attempted to clear streets with tear gas the day before.
Business has been helped by protesters like Justina Wong seeking a daily fix of fast food.
"I go there twice a day," said the 29-year-old media analyst who has been camping out most nights since protests began on Sept. 26. "It's Chicken McNuggets at night and hash browns in the morning."
Just days after the tear gas was fired Sotheby's set a wine auction record when it sold a 114-bottle lot of Romanée-Conti burgundy for $1.6 million as well as for Patek Philippe wristwatches.
"The prodemocracy movement does not appear to have an impact on the overall business climate in Hong Kong and the fundamentals remain strong," said Wendy Werner, practice manager of trade and competitiveness at the World Bank Group. "As long as we see transparency, corporate governance in order, a strong legal framework and business-friendly rules and regulations, the investment climate should stay intact."
