The Department Store in Hong Kong: Local Institutional Changes and the Concession Business Model

As a declining retail format, how is the department store managing to survive in Hong Kong? How has it transformed itself in response to contemporary retail environments? Are these institutional transformations different from those observed in the US and Europe? In what ways are they different and how have they shaped local department stores? This essay explores these questions through examining recent institutional changes of department stores in Hong Kong. Data for this study were collected through qualitative observation, documentary analysis, and in-depth interviews of department store managers and consultants. I find that Hong Kong’s department stores have pursued a major and successful institutional transformation between 1998 and the present: they strategically abandon the conventional department store format and develop a concession-oriented one. I illustrate the special characteristics, structural benefits, and potentials problems of the concession-oriented department store format through analyses of the power relationship between concessionaire and department stores, the changing work processes in department stores, and the cost and risk implications of concessions in the contemporary retail context of Hong Kong.