NOVEMBER is the perfect season for Shanghai hairy crabs, prized for their creamy roes.
Traditionally grown in freshwater in the Yangtze Delta, these palm-sized crustaceans are sought after in Hong Kong, too.
One can indulge in a crab feast tasting menu at a fine restaurant for HK$2,280 (US$292) per person, or choose to buy live ones from specialty shops and prepare them – often steamed – at home. Last weekend, I bought two pairs for HK$1,000 at an establishment near the central business district.
Many would say that’s too expensive, but what I paid for was convenience.
This year, Hong Kong residents have been flocking to the mainland for cheap hairy crabs, taking advantage of the border reopening and a deflationary mindset that is enveloping China, as the hoped-for resurgence from years of Covid restrictions has turned into one of 2023’s greatest disappointments.
In Shenzhen, crabs of unknown origin sold by Alibaba Group Holding Ltd’s supermarket brand Hema were going for as little as 27 yuan (US$3.80) apiece.
For 10 yuan more, customers could have crabs cooked on the spot and served in the store’s dining area.
On social media, merchants claimed they could deliver female crabs weighing about six taels (227g) for HK$76 each, a fraction of what I paid in Hong Kong.
This year, hairy crabs are almost “as cheap as cabbages” – a Chinese description for luxury items that are losing their appeal.
Thanks to mild weather, the yield at the Yangtze Delta is at a three-year high. New producers from northern Shandong and northwest Xinjiang provinces are also coming to market.
On the demand side, Chinese consumers are fearful of a weak economy and simply not in the mood to spend, preferring to save their money instead.
After all, who wants to pay US$10 for such tiny species that essentially offer just a small spoonful of roe? As a result, prices in the mainland are tumbling by as much as 40% from last year.
A culinary venture ensues. “I’ve never eaten them before in Hong Kong because they’re so expensive,” a resident told the South China Morning Post after visiting Shenzhen and paying 218 yuan for four crabs.
Many were seen packing caseloads into ice boxes to bring back to the city and share with family and friends.
Hong Kong residents taking northbound weekend trips is perhaps the most profound example of retail sentiment shift the financial centre has witnessed this year.
Everything feels cheaper on the mainland. The Chinese yuan is hovering near a decade-low, while the economy verges on deflation. People have been going to the adjacent Shenzhen for better dining, cheap spa treatments and even private yoga lessons.
On their way home, some stop by megamarts such as Sam’s Club, owned by Walmart Inc, to stock up on supersized goodies. Residents’ border crossings have pretty much returned to pre-pandemic levels.
Hong Kong residents are resuming their travel to Shenzen.
But this consumption trend has left many Hong Kong restaurants out in the cold. Night life and bars are suffering even more. While residents take long weekend trips, the much-anticipated mainland tourist spending has not materialised.
Young Chinese are visiting, but they are practical and value-oriented. They prefer taking Instagram-worthy photos in Central to swiping their parents’ UnionPay credit cards at the high-end Landmark mall.
Hong Kong’s restaurant industry is struggling despite full reopening.
Despite a full reopening in January, retail sales in Hong Kong have been struggling, prompting soul-searching among business owners.
A few mall landlords are experimenting with new concepts, hoping to transform people’s shopping experience. Instead, they should consider offering more coupons and sales events.
A deflationary wind is blowing from the north. Hong Kong, being so close to mainland China, can’t avoid that powerful force. — Bloomberg
Shuli Ren is a Bloomberg Opinion columnist covering Asian markets. The views expressed here are the writer’s own.