The King of Retail

According to the Macau Immigration Authority, tourist arrivals during the holiday grew 4.01% year-over-year, showing about 1.298 million border crossings during the May 1 to May 3 holiday period; 2 of those were my wife and myself.

And while there was a lot to do and see, a visit to the Venetian was in order. My small gambling budget was burning a hole in my pocket, and it didn’t last long once I got there. But after my wife dragged me away from the blackjack table, I saw it in its full glory. The Venetian is amazing, simply amazing, and you don’t have to spend a dime in the casino to enjoy it. This stunning masterpiece of architecture is not just a casino, it is in a class and category all its own. The artificial sky in the “Grand Canal” area truly gives the impression of being in Venice at twilight. The performers and singers in period costumes, and the gondoliers going gently down the water, really round out the experience. If you are anywhere near Macau, this is the no. 1 “must see” destination.

But are people spending money? We dropped quite a few patacas there, and the shopping opportunities are plentiful and rapidly expanding. But here’s an interesting statistic that can be taken for both good news and bad news by equity investors and venture capitalists, the number of new companies incorporated in Macau during the first quarter was down 8.2% year-on-year. Out of 732 new companies recorded during the quarter, 212 were in wholesale and retail, 147 in business services, and 131 in construction. The gigantic casino business isn’t growing, but it serves as the greatest catalyst for growth in these other areas, especially retail. Most of the capital for those new businesses came from within Macau, followed by Hong Kong and mainland China. Although there is some US-based investment, the US economy is stalled and investors there are putting their dollars into save haven investments. US-based investors may want to re-think this strategy, and put some of that money into some of the larger Macanese growth areas of retail and construction. Growth in the US is hard to come by these days, so those looking for a good return will have to look to the East over the next couple years.

But while there were fewer companies being incorporated (the bad news), the total registered capital increased (the good news). Total registered capital increased 117.6% to MOP169 million in the period. This implies that the newer projects going on are larger in scale and better funded, which is positive for Macau’s economy in general and is a good indicator of a greater level of success in new ventures.

What is interesting and good for the local economy is that the big is not pushing out the small—which I’ve seen happening all over the world. We enjoyed plenty of first-class shopping destinations and high-end restaurants, but the traditional Cantonese café, where locals spend a leisurely morning reading the paper, eating dim sum and drinking tea, are still plentiful. The menus are not in English and the waiter had to take my wife back into the kitchen so she could point to what we wanted. The food was excellent, and when we were finished, I misunderstood the waiter about the bill. I know about 6 words in Cantonese, and I thought it came to 365 patacas. I thought it was a little steep, but was in no position to try to argue. As I started pulling out hundreds, he laughed and corrected me—it was only 36.5 patacas. This tiny establishment—tourist-free except for us—was one of the most memorable.