(Updates with Apple store protest in final two paragraphs.)
Sept. 24 (Bloomberg) -- Apple Inc. opened its first store in Hong Kong today, paring reliance on sales agents to market its iPhones and iPads as Chinese tourists drive a retail boom in the city. Some customers queued two nights for the event.
Charanis Chiu, a 58-year-old photographic-equipment business owner was among hundreds waiting outside the store with its white Apple logo in the International Finance Centre mall in the city’s Central district. The shop, which opened its doors at 9 a.m., has a spiral staircase joining two floors and offers views of Victoria Harbour with a floor-to-ceiling glass facade.
“I started using Apple Mac products in the 1970s,” said Chiu, who secured fourth place in the line by joining the queue at 7:30 p.m. on Sept. 22. “As a fan, I must come and witness such a big thing in Hong Kong.”
The Hong Kong store is opening more than three years after Apple started its first self-operated shop in mainland China as the Cupertino, California-based company expands in a region where revenue surged sixfold last quarter. Retail-sales growth in Hong Kong exceeded 20 percent for a fifth straight month in July, bolstered by spending from Chinese visitors.
“You can’t ignore Hong Kong, it’s a great retail market,” said Paul French, founder of Shanghai-based market research company Access Asia. “There is a lot of money in Hong Kong,” he added.
Visitors from China staying one night or more spent an average of HK$7,453 ($955) each per trip last year, the highest amount of any group, according to the Hong Kong Tourism Board. The nation also provided the top spenders in the same-day category at HK$2,356 each.
Apple opened its third store in Shanghai yesterday, the biggest in China. With the Hong Kong outlet, the company’s total in the China region reached six, compared with the 25 stores that Ron Johnson, then Apple’s head of retail, said last year it targeted by February 2012.
Delays in store openings may give makers of smartphones and tablets equipped with Google Inc.’s Android software room to gain market share in the world’s biggest mobile-phone market, said Shaun Rein, managing director of China Market Research Group.
A gain in the past two years of about 7.5 percent in the yuan against Hong Kong’s dollar, which is pegged to the U.S. currency, has boosted the spending power of Chinese shoppers.
“I have never used Apple products before,” said Ms Yu, a 42-year-old executive from Changsha City in Hunan Province, who gave only her surname. “I want to try and see if Apple is really as fantastic as I heard,” said Yu, who had budgeted about HK$9,000 to buy a Macbook.
The local operations of investment banks including UBS AG and BNP Paribas SA are based at the offices of the International Finance Centre. The IFC commercial complex, developed by Sun Hung Kai Properties Ltd. and Henderson Land Development Co., includes the 88-story IFC 2 office tower.
“Hong Kong is an international financial center and has many users, Apple should have a store here,” said Sammy Wong, 31, a telecommunications supervisor who turned up at 6:30 a.m. today for the opening. “I’m very excited.”
Apple has more than 100 resellers in Hong Kong, and its iPhone is distributed by mobile carriers including billionaire Li Ka-shing’s Hutchison Telecommunications Hong Kong Holdings Ltd., according to the U.S. company’s website.
Revenue in China, Taiwan and Hong Kong increased six times to $3.8 billion last quarter, Apple Chief Executive Officer Tim Cook said in July.
Apple is in negotiations with Hysan Development Co. to open a store in Hysan Place in Hong Kong’s Causeway Bay shopping district, a person with knowledge of the matter said in May.
A group of labor activists protested outside the Hong Kong store after its opening today, footage from Cable TV showed. The TV reported that the protesters, mainly university students, urged Apple to protect workers’ rights.
Labor groups including China Labor Watch called Foxconn Technology Group, which makes iPads and Hewlett-Packard Co. computers, a sweatshop that tramples workers’ rights last year, allegations denied by Foxconn.
--With assistance from Kelvin Wong in Hong Kong. Editors: Jake Lloyd-Smith, Paul Tighe
To contact the reporters on this story: Mark Lee in Hong Kong at email@example.com; Jasmine Wang in Hong Kong at firstname.lastname@example.org
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