An exploratory study on the decline of Hong Kong shopping malls: for MBA students

An exploratory study on the decline of Hong Kong shopping malls: for MBA students (information from perplexity.ai).

My question 1: "What is the decline of Hong Kong shopping malls all about with reference to the subject of retail marketing?"

The reply: "Decline of Hong Kong Shopping Malls: Retail Marketing Perspective

Key Indicators of Decline

• Prolonged Retail Sales Downturn: Hong Kong's retail sales have been falling for over a year, with April 2025 marking the 14th consecutive month of decline. Sales decreased 3.3% year-on-year in April 2025, following a 4.7% drop in March. Categories such as consumer goods, motor vehicles, furniture, and clothing have seen significant declines.

• Vacancy Rate Pressures: Prime shopping centre vacancy rates edged up to 9.2% by Q1 2025, up from 9.1% in Q4 2024, while high street shop vacancies rose to 10.6%. Oversupply from recent years means there is now excess retail space, exacerbating vacancies.

• Changing Consumer Behavior: Despite efforts to attract tourists (who increased by 18% in Q1), local consumer patterns have shifted. Many Hong Kong residents are choosing to shop in Shenzhen, benefiting from lower prices and a wider range of goods due to favorable exchange rates. This cross-border consumption is a major factor driving retail sales down, even as inbound tourism rises.

Retail Marketing Implications

• E-commerce and Online Platforms: Traditional brick-and-mortar marketing is losing ground to e-commerce platforms, with nearly half of Hong Kong users making weekly online purchases. Major product categories online include fashion, electronics, food, and furniture, with free delivery and digital coupons as strong motivators.

• Smart Retail Solutions and Technology: Retailers are rapidly adopting AI-driven analytics, live streaming, and pre-order campaigns (especially for popular character merchandise) to engage consumers. Interactive experiences and emotional connections are increasingly emphasized in retail marketing strategies.

• Intense Competition: Expansion by major Chinese e-commerce companies (JD.com, Alibaba, etc.) into Hong Kong, including opening physical stores and launching exclusive services, has heightened competition and challenged local malls. Their robust digital and omnichannel strategies often outpace traditional mall marketing.

• Price Sensitivity: Economic pressures (including inflation and high interest rates), subdued demand for luxury goods, and strong cross-border price competition necessitate that malls re-evaluate marketing tactics. Successful retailers are those leveraging digital transformation and innovative consumption experiences rather than relying solely on foot traffic.

Retail Marketing Responses

• Experiential and Thematic Campaigns: Shopping malls and retailers now invest in experiential marketing—pop-up stores, themed campaigns, and event tie-ins—to draw consumers offline and differentiate from online shopping.

• Tenant Mix Adjustments: Core shopping areas prioritize tenants that appeal to tourists or offer mass-market goods (like grocery and casual dining), reflecting shifting consumer priorities.

• Omni-channel Strategies: Integration of online and offline channels, customer loyalty programs, and digital engagement are central to current retail marketing.

Hong Kong shopping malls must reinvent their retail marketing strategies—embracing technology, reimagining in-mall experiences, and integrating digital platforms—to remain relevant in an era of declining footfall and rapidly evolving consumer preferences."

My question 2: "What are the theories to study this topic?"

The reply: "The study of the decline of shopping malls, particularly from a retail marketing perspective, can be approached using several key theories and frameworks:

1. Consumer Behavior Theory
   Examines how changes in consumer preferences, attitudes, and behaviors (e.g., shift to online shopping, preference for personalized experiences) impact the decline of physical malls. This theory helps analyze why consumers might avoid malls in favor of e-commerce or alternative retail formats.

2. Retail Life Cycle Theory
   Suggests that retail formats including malls go through stages of introduction, growth, maturity, and decline. This framework helps understand the current decline stage for many malls and the factors that accelerate it, such as digital disruption and changing social habits.

3. Channel Migration Theory
   Explores how consumers shift their shopping from one channel (brick-and-mortar) to another (online, mobile, social commerce), which directly relates to the erosion of foot traffic and sales in malls.

4. Experiential Marketing Theory
   Emphasizes the importance of creating memorable, engaging shopping experiences. This theory is used to study how malls attempt to counteract decline by transforming into lifestyle or community centers offering unique experiences beyond just retail.

5. Competitive Strategy Theory
   Addresses how malls position themselves in a competitive environment with e-commerce and changing retail landscapes, focusing on differentiation, tenant mix, and value propositions to attract consumers.

6. Marketing Mix (4Ps) Theory
   Useful for analyzing how product assortment, pricing strategies, place (location/online presence), and promotional activities affect mall competitiveness during decline phases.

7. Technology Adoption and Digital Transformation Models
   Theories like the Diffusion of Innovation explain how the adoption of digital tools (e.g., AI, live streaming, mobile apps) by malls and retailers can influence marketing effectiveness and potentially slow or reverse the decline.

8. Urban Sociology and Place Attachment Theory
   Studies the social and psychological ties consumers have to physical places like malls, helping explain the community and cultural impact of mall decline and the potential for repurposing mall spaces.

These theories collectively offer a comprehensive lens to analyze the decline of Hong Kong shopping malls from the retail marketing angle, addressing consumer shifts, competitive forces, experiential changes, and technological impacts.

For further reading on these theories applied to mall decline, the thesis "The Death of Malls: The Rise of E-commerce and Digitally Native Brands" (2022) offers relevant insights into consumer preferences and mall transformations, while recent academic articles explore changing consumer behavior and mall marketing challenges.The study of the decline of shopping malls, especially in retail marketing, can be approached through several key theories:

• Consumer Behavior Theory: Analyzes how changes in consumer preferences—such as shifting to online shopping or seeking personalized experiences—impact mall visitation and shopping patterns.

• Retail Life Cycle Theory: Describes stages of retail formats (introduction, growth, maturity, decline), helping to explain why malls are currently in a decline phase.

• Channel Migration Theory: Focuses on consumers shifting from physical stores to online or alternative retail channels, leading to reduced foot traffic in malls.

• Experiential Marketing Theory: Emphasizes creating unique, engaging customer experiences, which malls use to counter decline by transforming into lifestyle or community hubs.

• Competitive Strategy Theory: Looks at how malls differentiate themselves and adapt tenant mixes and marketing strategies to compete with e-commerce and changing retail landscapes.

• Marketing Mix (4Ps) Theory: Explores product, price, place, and promotion adjustments malls make to remain relevant.

• Technology Adoption and Digital Transformation Models: Explain how adoption of digital tools (e.g., AI, live streaming) affects marketing effectiveness and consumer engagement.

• Place Attachment Theory (Urban Sociology): Studies consumers’ emotional and social ties to malls, highlighting the cultural and community impacts of mall decline.

These theories form a framework for understanding the complex factors behind the decline of Hong Kong shopping malls and guide strategies for retail marketing adaptation and innovation."

My question 3: "What have been the research gaps and issues on this topic over the past 20 years?"

The reply: "Over the past 20 years, research on the decline of Hong Kong shopping malls has revealed several gaps and key issues:

1. Limited Longitudinal Data on Consumer Behavior Shifts
   While many studies identify shifts to e-commerce and cross-border shopping as causes of mall decline, there is a shortage of detailed long-term consumer behavior data specific to Hong Kong. Understanding the nuanced motivations and loyalty factors for different consumer segments remains incomplete.

2. Inadequate Focus on Mall Management Evolution
   Research has touched on changes in mall management and tenant mix strategies, but the dynamic adaptation processes within Hong Kong malls over time need more comprehensive study. How management practices evolve in response to competition and changing market conditions is underexplored.

3. Lack of Integration Between Tourism and Retail Impacts
   Hong Kong malls depend heavily on tourism, especially mainland Chinese visitors, but there are few integrated studies combining tourism trends, retail marketing, and mall performance over extended periods, particularly under fluctuating geopolitical and pandemic impacts.

4. Oversupply and Real Estate Investment Perspectives Less Explored
   Although oversupply is acknowledged as a cause of rising vacancies and declining rents, there is limited academic focus on the investment and financing side—how investors and landlords respond to decline and how that affects mall revitalization.

5. Insufficient Research on Experiential and Digital Marketing Effectiveness
   The rise of experiential retail and smart retail technologies is recent; thus, there is limited empirical research on the effectiveness of these marketing innovations in slowing or reversing mall decline in Hong Kong’s unique market.

6. Urban Planning and Social-Cultural Dimensions Understudied
   The role of malls as social spaces and their integration within Hong Kong’s urban fabric has not been fully addressed, leaving gaps in understanding how place attachment or community functions impact mall sustainability.

7. Fragmented Approach to Competitive Strategy Studies
   Studies often silo competitive strategies, consumer trends, and technological adoption rather than offering integrated models assessing how these factors collectively influence mall decline and potential recovery.

Overall, the major research gaps over the last two decades concern a holistic, integrated examination of consumer behavior, management strategy, tourism effects, real estate investment, and marketing innovation specific to Hong Kong's context. There is a strong need for longitudinal and interdisciplinary research that connects these dimensions to guide effective responses to mall decline."

My question 4: "What have been the Hong Kong public media-reported issues on this topic over the past 15 years?"

The reply: "Over the past 15 years, Hong Kong public media have reported several key issues regarding the decline of shopping malls:

1. Sustained Decline in Retail Sales
   Media reports frequently highlight prolonged declines in Hong Kong retail sales, sometimes spanning over a year. These declines are linked to reduced consumer spending, fewer mainland Chinese visitors, and shifts in consumption patterns due to economic uncertainty and cross-border shopping.

2. Impact of Economic and Political Factors
   The retail sector has been affected by global economic uncertainty, local political unrest, and the COVID-19 pandemic, which disrupted tourism and changed resident behaviors. These factors led to weakened retail rents and increased vacancies in malls.

3. Rising Vacancies and Falling Rents
   Retail rents in prime shopping areas have fallen sharply from their historical highs due to weaker demand and oversupply. Landlords have been offering discounts and more flexible leasing terms to retain tenants, reflecting ongoing market pressure.

4. Changing Consumer Preferences and Competition
   Media reports point to consumers seeking unique, experiential retail concepts and the rise of e-commerce as key challenges for traditional malls. Competition from nearby cities (like Shenzhen) and online platforms has intensified, forcing malls to rethink tenant mixes and marketing strategies.

5. Dead Malls and Revitalization Efforts
   The media has covered cases of "dead malls" — shopping centers with many vacancies and low foot traffic. However, some have seen niche revival efforts, such as conversion into hipster shops or creative spaces, reflecting efforts to repurpose and revitalize malls creatively.

6. Tourism Dependence and Volatility
   The reliance on mainland Chinese tourists makes Hong Kong malls vulnerable to fluctuations in visitor numbers due to travel restrictions and geopolitical tensions. This volatility has been repeatedly noted as a structural challenge in media coverage.

7. Shift Toward Experiential and Lifestyle Retail
   Coverage stresses the growing importance of experiential tenants—zoos, art exhibitions, sports arenas—in malls as a way to attract visitors and create lifestyle destinations rather than just shopping spaces.

In summary, public media reporting over the last 15 years underscores a mix of economic challenges, changing consumer behaviors, rental pressures, and efforts towards innovative mall repositioning as the main issues defining Hong Kong shopping malls' decline."

My question 5: "Propose 4 related research objectives and 2 related research issues on this topic for a part-time MBA dissertation project with a duration of 4 months. Also suggest 2 primary research methods and 1 secondary research method for this project based on pragmatism."

The reply: "For a part-time MBA dissertation project of 4 months on the topic of the decline of Hong Kong shopping malls from a retail marketing perspective, here are suggested research objectives, research issues, and research methods based on a pragmatism paradigm:

Research Objectives:

1. To evaluate the impact of declining retail tourism on the financial performance and competitive strategies of Hong Kong shopping malls.

2. To analyze the effectiveness of digital and experiential retail innovations in attracting consumers and revitalizing Hong Kong malls.

3. To investigate the strategic responses of mall landlords and managers to retail vacancies and oversupply amid market decline.

4. To identify critical success factors for sustaining retail growth and resilience in Hong Kong's evolving retail environment.

Research Issues:

1. Difficulty in correlating retail sales decline with strategic business and property management decisions due to fragmented or limited data within a short research timeframe.

2. Challenges in assessing the measurable impact of technological and experiential innovations in traditional mall environments to meet changing consumer expectations.

Research Methods (Pragmatism Paradigm):

Primary Research Methods:

• Semi-structured interviews with retail business owners, mall property managers, and tourism marketing officials to gain qualitative insights into strategic and operational responses.

• Structured surveys targeting local shoppers and Mainland Chinese tourists to collect quantitative data on shopping behaviors, preferences, and perceptions of mall innovations.

Secondary Research Method:

• Document analysis of industry reports, retail sales data, government publications, and academic literature to establish market context and identify macro trends.

These objectives and methods integrate qualitative and quantitative approaches to provide actionable insights within the practical constraints of a part-time MBA project, addressing real-world business challenges in Hong Kong's retail sector."

My question 6: "Comment on the originality, academic and practical values of this study. Also comment on the research ethics issues involved in this study."

The reply: "Originality of the Study

This study is original in its focused examination of the decline of Hong Kong shopping malls from a retail marketing perspective within the unique socio-economic and cultural context of Hong Kong. While global mall decline has been studied extensively, few studies integrate the local dynamics of cross-border shopping behaviors, tourism volatility, and rapid digital transformation in Hong Kong’s retail sector. The combination of qualitative insights from mall managers and quantitative data from local and tourist consumers further enhances its novelty. The study's integration of experiential retail strategies within the evolving mall ecosystem also contributes fresh perspectives to existing literature.

Academic Value

The research fills existing gaps by providing a longitudinal, interdisciplinary understanding of mall decline rooted in real, contemporary issues such as retail-tourism interplay, digital disruption, and urban social functions of malls. It enriches theoretical frameworks on retail life cycle, consumer behavior, and digital marketing by contextualizing them in an Asian global city known for its complex retail environment. It also offers empirical data on consumer preferences and managerial strategies in Hong Kong, supporting future academic research and theory refinement.

Practical Value

Practically, this study offers actionable insights for retailers, mall operators, urban planners, and policymakers seeking to arrest or reverse mall decline. It identifies effective digital and experiential marketing strategies and highlights critical success factors for retail resilience, helping stakeholders make informed decisions on tenant mix, marketing investments, and property management. It also provides guidance on adapting to evolving consumer behaviors amid regional competition and tourism flux, contributing to revitalization efforts in a rapidly changing retail landscape.

Research Ethics Issues

• Informed Consent: Ensuring that all interviewees and survey participants clearly understand the study’s purpose, their voluntary participation, and the confidentiality of their responses.

• Data Privacy: Protecting personal data collected from participants by anonymizing responses and securely storing data to prevent unauthorized access.

• Avoidance of Harm: Minimizing any risk to participants’ reputations or business interests, especially given the sensitive nature of discussing retail decline and strategic challenges.

• Transparency: Being open about the study’s aims, funding sources, and how the data will be used.

• Bias and Fairness: Maintaining objectivity when collecting and analyzing data and reporting findings without misrepresentation or favoritism.

By adhering to these ethical principles, the study safeguards participant rights while producing credible, responsible research outcomes."

My question 7: "Provide 6 non-academic and 6 academic references for this study in Harvard reference format."

The reply: "Non-Academic References (Media & Industry Reports)

1. Reuters (2025) ‘Hong Kong March retail sales fall 3.5%, government sees ...’. Available at: https://www.reuters.com/world/asia-pacific/hong-kong-march-retail-sales-fall-35-2025-05-02/ (Accessed: 18 August 2025).

2. China Daily Hong Kong (2025) ‘Hong Kong retail sales bounce back after 14-month decline’. Available at: https://www.chinadailyhk.com/hk/article/615102 (Accessed: 18 August 2025).

3. PwC (2024) ‘PwC forecasts a 6% decline for Hong Kong's retail sales in 2024 ...’. Available at: https://www.pwchk.com/en/press-room/press-releases/pr-171024.html (Accessed: 18 August 2025).

4. JLL (2025) ‘Hong Kong | JLL’. Available at: https://research.jllapsites.com/appd-market-report/q1-2025-retail-hong-kong/ (Accessed: 18 August 2025).

5. Inside Retail Asia (2025) ‘Hong Kong retail sales decline continues’. Available at: https://insideretail.asia/2025/03/04/hong-kong-retail-sales-decline-continues/ (Accessed: 18 August 2025).

6. Knight Frank (2024) ‘The Retail Note | Shopping centres: where did it all go wrong?’. Available at: https://www.knightfrank.com/research/article/2024-05-17-the-retail-note-shopping-centres-where-did-it-all-go-wrong (Accessed: 18 August 2025).

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Academic References

1. Ho, J. (2025) ‘An exploratory study on Hong Kong as "ruins of shopping paradise"’, Joseph Ho's Blogspot. Available at: http://josephho33.blogspot.com/2025/08/an-exploratory-study-on-hong-kong-as.html?m=1 (Accessed: 18 August 2025).

2. The Hong Kong Institute of Surveyors (2015) ‘The Successful Factors for Shopping Malls in Hong Kong’. Available at: https://www.hkis.org.hk/ufiles/RC1516031_report.pdf (Accessed: 18 August 2025).

3. Chalmers University of Technology (2023) ‘Take back our city: reclaiming shopping malls in Hong Kong’. Available at: https://research.chalmers.se/publication/537905/file/537905_Fulltext.pdf (Accessed: 18 August 2025).

4. HKU Scholars Hub (2021) ‘A Study Investigating the Preferences of Shopping Centre in Hong Kong’. Available at: https://hub.hku.hk/bitstream/10722/283527/1/FullText.pdf (Accessed: 18 August 2025).

5. HKU Scholars Hub (2021) ‘Hong Kong's Shopping Malls under Pandemic’. Available at: https://hub.hku.hk/bitstream/10722/336474/1/FullText.pdf (Accessed: 18 August 2025).

6. Kadence International (2024) ‘The Decline of Department Stores: Understanding Changing Consumer Preferences and the Future of Retail’. Available at: https://kadence.com/en-us/the-decline-of-department-stores-understanding-changing-consumer-preferences-and-the-future-of-retail/ (Accessed: 18 August 2025)."

** Please also study the follow-up note on asking poe.com to produce a proposal prototype.

A collection of blog notes on using chatgpt for research purpose.