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Cosmetics retailer Sa Sa uses social media, e-wallets to attract Chinese shoppers

How Sa Sa copes with an increasingly digital world

Hong Kong cosmetic icon Sa Sa has gone digital to counter mainland Chinese tourists' dwindling interest in shopping, Guy Look, the retailer's chief financial officer, told CNBC's "Squawk Box."

Look said Sa Sa tried to establish relationships with potential customers through social media and e-wallet platforms before they arrived in Hong Kong.

"That reflects very much a changing consumer behavior; they're dictating what we have to do to attract their attention and share of their wallet," he said on Tuesday.

The number of Chinese visitors to Hong Kong grew in July, the first rise in more than a year. Their once legendary spending on consumer goods, however, apprears to have tapered off.

Hong Kong retail sales fell 7.7 percent on-year in July, with jewelry and watch sales down more than 26 percent and department store sales falling nearly 7 percent.

"While the stabilization in mainland Chinese arrivals has been quite clear, the spending is not completely reflected in terms of mainland Chinese spending, because it seems that they're spending less on a per capita basis," Look noted.

"I think basically they are spending more on experiencing during traveling, they're probably spending a bit more on hotel accommodation, spending more on peak trams, enjoying themselves and not just buying things," he added.

Nelson Ching | Blomberg | Getty Images

That has pushed SaSa to turn to digital platforms to gain Chinese tourists' interest.

"We have to work with people like Alipay, WeChat [and] UnionPay. These platforms will provide us access to their database and their customers, so that when they do plan their holidays, they would include us in their agenda," Look said.

Sometimes that has meant giving up on attracting tourists into Sa Sa's retail locations, the CFO acknowledged.

"Increasingly, we reach out to them before they come over and we give them the option to buy online and collect in Hong Kong or we deliver to them in China," he said.

Look said the digital efforts have had a proven impact on sales.

He noted that in July, when overall retail sales still fell, Hong Kong's overall cosmetic and medicine segment sales actually rose by 9 percent from a year earlier.

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—By CNBC.Com's Leslie Shaffer; Follow her on Twitter @LeslieShaffer1