Bling babes invade Hong Kong

They tottered in on garish platform shoes wearing micro-minis and fishnet stockings, like fashion victims from a Versace show.

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Bling babes with big hair and money to burn stalk the glitzy malls of China's version of an adult toytown, snapping up brand names on an industrial scale.

"This is the place to be for shopping," says LuLu, a 30-something from Zhejiang near Shanghai as she strolls through Pacific Place in the chic Hong Kong district of Admiralty. "It's not really about the cost of certain brands, it's about the availability."

Labels such as Gucci and Louis Vuitton entice shoppers such as LuLu and China's new wave of fashion followers, whose appetite for style is expected to make the country the world's biggest luxury market within five years.

"Hong Kong has become a magnet for China's nouveau riche," says a bank executive in Hong Kong. "It's like Toys "R" Us for grown-ups."

Indeed, this buying binge is fuelling double-digit growth in the retail sector, with luxury labels cashing in, despite the threat of a worldwide slowdown sparked by the euro-zone crisis and fears over the global banking industry.

The China syndrome is also rippling through the hotel industry as mainland shopaholics pour into the city armed with Hong Kong dollars.

In a HSBC report earlier this year, the bling babes and their wealthy husbands and boyfriends were dubbed "walking ATMs" as they spend, spend, spend.

"Registers have been ringing non-stop in Hong Kong since the start of this year, a trend that stays firmly in place," says Donna Kwok, a Greater China economist at HSBC.

This retail phenomenon was brought into sharp focus by Bain & Company, an international management consultancy, in October.

Data showed that China's seemingly insatiable appetite for brands is expected to rise 35 per cent this year to €12.9 billion (Dh63.3bn). Startling growth, especially as it comes on the back of an increase of more than 30 per cent last year.

When you group Hong Kong, Macau and Taiwan together, the figure is expected to reach €23.5bn, according to Bain.

"Mainland visitors provide a crucial source of growth for sales of high-end luxury items," says Ms Kwok.

Hardly surprising then, that global blue-chip brands are queuing up to list on the Hong Kong Stock Exchange. Prada, an Italian luxury fashion house, raised US$2.14bn (Dh7.8bn), while Aston Martin, Burberry, Coach, Ducati and Graff Diamonds are also mulling substantial Chinese takeaways.

"Companies want to face their future, not their past," said Sam Kendall, the head of equity capital markets for Asia-Pacific at UBS, in Bloomberg Businessweek.

Quite simply, they are going where the money is, and Hong Kong is awash with mainland cash.

After 30 years of breakneck growth, a new brash and flash generation has grown up with a taste for the high life, bankrolled by China's economic miracle.

But how long it will last is open to opinion. In the rush to become an industrial powerhouse, the country of 1.3 billion has a huge environmental mess to clean up that will eat into Beijing's foreign reserves of $3.2 trillion.

Enormous spending on infrastructure projects that dwarf the building of the pyramids and a property bubble that is reaching bursting point are also blurring the economic picture.

Another potential problem is the state of the country's banking industry, particularly regional players that invested heavily during the housing boom and are now saddled with bad loans accumulated in the past 20 years.

"The Chinese banking system is built on quicksand and that's the one thing a lot of people don't realise," says Jim Chanos, the president and founder of the hedge fund Kynikos Associates.

His comments on Bloomberg Television's In the Loop highlight the fine line Beijing policymakers are walking.

"Everybody seems to think it is a free and clear open chequebook. It's not," he says. "The banking system in China is extremely fragile."

Yet the odour of gloom is stifled by the intoxicating fragrance of Chanel No5 when you stroll through the Hong Kong malls in Central and Causeway Bay.

No one loves the trappings of success more than the city's entrepreneurial elite, but even they marvel at the spending power of their mainland neighbours.

"When you walk into one of the big brands, the sales assistant immediately greets you in Mandarin," says a seasoned Hong Kong shopper. "When you answer in Cantonese, they realise you are local and move on to the next customer. They think you might be just browsing. The mainlanders are here to buy, and buy big.

"In one top name brand shop I saw a group of mainland girls looking at an array of handbags, costing around HK$10,000 [Dh4,725] to HK$15,000 each," she adds. "Pointing to two of the bags, they called over the sales assistant, and said, 'We'll take them all apart from those two.' They paid in cash."

Similar stories of excess are told in the trendy bars of Lan Kwai Fong in the business nerve-centre of Central, but no one is complaining.

While the good times roll, the bling babes are just as much a part of Hong Kong as the Hang Seng Index. But the big question is whether they are just as volatile. We may be about to find out.

gwatts@thenational.ae

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