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Hong Kong
By Mary Kavanagh
The considerable impact of the Occupy Central pro-democracy protests on customer traffic and sales in the central shopping district of Hong Kong was reflected in retailers’ third-quarter results for the three months that ended December 31, 2014. The protests began in September and were closed down in mid-December. Richemont, the maker of Cartier jewelry, reported that third-quarter revenue growth stagnated for the first time in six years. Hong Kong–based jewelry retailer Luk Fook reported that same-store sales in the third quarter fell 7 percent compared to the same period a year earlier — although this was an improvement on the 21 percent decline the company had reported for the second quarter. Chow Tai Fook (CTF), the world’s largest jewelry retailer by market value, announced a 10 percent decline in overall sales for the third quarter compared to the previous year and an 18 percent decrease in same-store sales, with sales in Hong Kong, Macau and other non-Mainland markets down 21 percent. The company’s sales in China decreased by 15 percent. October, the month of the National Day Golden Week holiday — usually a peak shopping period — was a particularly bad month for CTF in Hong Kong. It recorded a drop of 24 percent in same-store sales. A spokesperson for the company said it was not surprised by the sales figures, attributing the drop to the Occupy Central demonstrations, the ongoing crackdown on lavish spending by the Beijing government and the growing number of Chinese tourists shopping abroad.
CTF is optimistic that the market will pick up in the coming months. “Now that the high base effect has faded out, we are optimistic that sales this calendar year will gradually improve,” a spokesperson for the company said. “We expect consumer sentiment to improve gradually and to see it reflected in Chinese New Year and Valentine’s Day sales, which are traditionally two major shopping occasions.” The Chinese New Year holiday kicks off February 19 and CTF has already launched its Year of the Sheep product line that includes gold sheep pendants and ornaments. “Zodiac gold products and various gold items that symbolize abundance and luck are most popular, in particular among our Mainland Chinese and more sophisticated customers who hope to bring joy and luck to the New Year,” the spokesperson said. “Valentine’s Day is becoming increasingly popular among young people who are after more fashionable platinum, diamond and other gem-set products,” continued the CTF spokesperson. “We are promoting wedding bands, fashion jewelry and youth lines — including our Magic Square Forevermark collection, Caprice collection, Chow Tai Fook 520 collection and Disney collection — to cater to our customers’ needs.”
Hong Kong jeweler and artist Dickson Yewn, creative director and founder of Yewn Heritage Jeweller and Life Of Circle Asian Contemporary Jewellery, found himself in the international spotlight in 2011 when U.S. First Lady Michelle Obama wore his iconic Lattice ring to the royal wedding of Crown Prince William and Kate Middelton. Yewn specializes in contemporary Chinese luxury jewelry inspired by China’s cultural heritage. “My customers have always been career women so Michelle Obama is a wonderful endorsement,” Yewn said. The past couple of years have been tough for the diamond business in Hong Kong, Yewn acknowledged, but he said he has weathered the storm well. “I always say, the slower the market, the better I perform.” In 2014, Yewn’s business grew about 20 percent and he expects it to grow a further 15 percent in 2015. “Overall, during the past five years, my sales have increased steadily by about 10 percent to 15 percent annually,” he said, noting the majority of his customers are Chinese living around the world, with the U.S., Russia and Southeast Asia also being important markets.
According to Yewn, his clients still have money during tough economic times, but are more cautious about how they spend it so “they want to find something very special.” His jewelry falls into this “special” category, with prices starting above $3,000. Yewn said there is an increasing trend for women to buy gifts for themselves and this is the case for many of his customers. A spokesperson for CTF agreed that “there is a growing trend for women to buy jewelry for self-rewarding purposes.” Unlike the big retail chains in Hong Kong, Yewn has not yet focused on targeting the market in China, other than selling to a small elite. “I am slowly working on China,” he said. “I always look at China as the country I love the most, because my collection is China contemporary.” But, he added, the timing must be right and that may not be for another five to ten years “when I’m ready for China and China is ready for me.”Article from the Rapaport Magazine - February 2015. To subscribe click here.
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