Designer-clad women browse the new arrival racks of a French couturier store; well-heeled gents snap up suits from a US outfitter; and trendy youngsters fill a club-like European sports gear store.

Hong Kongers of all ages fill this mall in search of the world's most prestigious -- and expensive -- labels.

But contrary to appearances, this is not one of the glitzy emporia of the fashion-conscious downtown district. Nor is it in the rarefied atmosphere of the super-rich Peak neighborhood.

This is Festival Walk, a sleek suburban-style shopping arcade in the middle of the grimy Kowloon district.

While shoppers in the rest of the world must travel huge distances to find stores selling such items, Hong Kongers' huge demand for big-name labels means luxury goods are sold all over the city in places you'd expect to find bargain stores and fast-food chains.

"Hong Kong is an advanced, business-minded, materialistic city: as long as they exist, Hong Kongers will always love their designer labels," said Keith Chan, manager of Milan Station, a chain of stores that specialize in restored designer handbags.

Hong Kong is jammed with high-end shopping malls: a walk through downtown needn't once involve stepping onto the pavement as all major buildings contain malls linked by overhead walkways.

Each of them bristles with the highest-profile brand names like Christian Dior, Chanel, Louis Vuitton and Hermes. Road-level stores boast prestigious car marques like Rolls Royce and Jaguar.

And all of them brim with wealthy people who have money to burn.

"We don't buy out of necessity -- as long as it's something that is up-to-date and stylish, something that we like, we would buy it," said May Kwok. In the local parlance, Kwok is known as a tai tai -- the non-working wife of a wealthy businessman.

As a senior civil-servant, Kwok's husband not only has the income to pay for his wife's lavish lifestyle, he also has the social position to justify it.

"We like clothes, shoes and cosmetics but we are not looking for anything particular here," said Kwok, who is in her mid-50s.

Kwok's day is spent immersed in luxury. After a two hour lunch with a friend at an exclusive buffet restaurant overlooking leafy Hong Kong Park she spends four hours shopping in Pacific Place, arguably Hong Kong's swankiest shopping center.

She is typical of label lovers here, and spends an average of 20,000 Hong Kong dollars (2,600 US dollars) a month on luxury goods. She has seven wardrobes full of clothes at home, she said.

"I have too much, sometimes I have to give them away," she says, clutching a bag of Gucci goods. "My husband sometimes complains that I have too many clothes and handbags. He also moans that I don't wear everything I buy. But I don't care what he says."

Asia accounts for 40 percent of world luxury brand sales and outside of Japan, Hong Kongers buy more luxury items than any other Asians.

That demand and the city's proximity to China's huge emerging market are the reasons brands like LVMH, Prada, and Dolce and Gabbana have their Asia-Pacific headquarters here.

Sales have been boosted by a surge in the number of mainland Chinese tourists visiting Hong Kong courtesy of a relaxed travel policy in China.

High tariffs on luxury goods in China make the cheaper prices in Hong Kong a big attraction for Chinese visitors. Government figures show they spent 6,018 Hong Kong dollars per capita in 2003 compared with 5,502 dollars from overseas tourists.

Morgan Stanley consumer analyst Angela Moh estimates Chinese tourist spending in Hong Kong accounts for about 20 percent of retail sales a year.

"If you are going to the stores like Gucci, the chances of running into someone from the mainland China is very high," she said.

Shanghai resident Tan Xueping, 41, and her five friends took a special three-day shopping trip to Hong Kong.

Although Shanghai has no shortage of its own luxury stores, Tan explains that new products are launched here before going north.

"There are also more foreign brands here, which we like," she said.

Milan Station's Chan understands the city's obsession with luxury: he has made a success out of selling the upper classes' cast-offs to a middle class desperate to get on the social ladder.

"Some consumers may not use their expensive handbags more than a few times," he said. "Some women buy new handbags all the time -- some use them for a few days and some don't even use them at all. Then they sell them to us.

"For some, owning something is more important than actually using it."

(China Daily/Agencies November 30, 2004)