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Hong Kong
By Liana Cafolla
Despite the almost total shutdown of the city for five days during the annual Chinese New Year holiday in early February, Hong Kong wholesalers reported good activity in the days and weeks leading up to the Chinese New Year and Valentine’s Day. Retailer Chow Tai Fook said the holiday — a traditional occasion for shopping and gift-giving — had boosted retail sales. “The demand for festive products has been particularly high among the Chinese because it is a tradition of the Chinese to buy zodiac animal products in the belief that these products will bring good luck and fortune for the whole year,” said a representative of Chow Tai Fook. “These products are in different designs, including jewelry items like pendants, gold coins and gold bars, decorative ornaments such as gold snake sculptures and other nonzodiac animal products, such as god of fortune figurines, as well as sycee or yuanbao ornaments”
made from old silver and gold ingots. The company noted that Valentine’s Day this year fell immediately after the end of the Chinese New Year holiday, which was expected to help drive Golden Week sales. “We have seen Hong Kong retail sales gradually pick up since November 2012 and we believe this trend is likely to continue,” said the Chow Tai Fook spokesperson. “However, in Mainland China, we believe the retail market will take a little more time to recover.”
As Hong Kong welcomed the Year of the Snake, the tribulations facing Hong Kong’s Chief Executive, CY Leung, continued to mount. Already facing the lowest approval rating of any government since the handing over of Hong Kong to China in 1999, Leung’s first policy address in January was criticized as being an inadequate response to the city’s property and poverty problems. In February, Leung issued a solicitor’s letter demanding the retraction of a commentary in a leading Hong Kong newspaper that accused him of links to triads, or organized crime. Leung’s reaction to the piece was widely denounced as a chilling threat to freedom of the press. Further from home, tensions continue to escalate between Mainland China and Japan in the South China Sea over ownership of the islands known as the Diaoyus by China and the Senkakus by Japan. In early February, Japan accused China of locking fire-control radar onto a Japanese destroyer ship in waters near the islands. China says it used only traditional surveillance radar, but Japan countered that it would release video footage to prove its allegations.
The public sees corruption as a threat to social stability and there is growing anger at the ostentatious wealth of many government leaders. In response, Mainland China has been making a conscious attempt to stop bribery and corruption of public officials. Its latest effort spilled over into Hong Kong’s jewelry market. Shares in Chow Tai Fook, Chow Sang Sang and Luk Fook fell between 6 percent and 7 percent in the first week of February following a ban by Beijing on advertising that could be construed as encouraging “gifts for leaders,” a euphemism for bribery. The city’s watch retailers suffered even more, with shares in Emperor Watch & Jewellery down by almost 13 percent, and shares in Oriental Watch down by more than 8 percent. Watches, as might be expected, traditionally are a popular gift for government and business leaders. The advertising ban came on the heels of buoyant growth in Hong Kong jewelry sales in November and December 2012, with sales up 13.4 percent and 11 percent, respectively, compared with a year earlier, according to Bloomberg.
Hong Kong’s jewelry businesses carry out corporate social responsibility (CSR) activities in a variety of ways, but much of this activity often remains hidden from public view. Rendy Ng, gemologist and director at Hong Kong retailer and wholesaler Bee’s Diamonds, said the company has a long tradition of giving back to the community. The practice originated with her grandfather, who believed that because the company made its profits from diamonds, a natural resource of the earth, the company should return some of those profits to society. Bee’s Diamonds targets three groups: women and equality, youth and education, and crime prevention. The company’s first initiative took place two years ago in support of The Watoto African Children’s Choir, which is comprised of children who have lost one or both parents and who live in various Watoto children’s villages. When the choir came to Hong Kong to perform, Bee’s Diamonds donated 25 pieces of jewelry for a silent auction whose proceeds were used to provide food, water and education for the choir members. “Because most diamonds come from Africa, we felt strongly about helping Africa,” explains Ng. Hong Kong retail jewelry chain Chow Tai Fook also focuses on Africa for its CSR efforts. The company supports the Diamond Empowerment Fund (DEF), which benefits a range of education initiatives in Africa. “We also support the China Charity Federation (CCF), a nationwide nongovernmental charitable organization, which supports relief efforts in Mainland China,” notes the company’s website.Article from the Rapaport Magazine - March 2013. To subscribe click here.
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