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Hong Kong
By Mary Kavanagh
The market for bridal jewelry in China is growing. “There are about 13 million to 14 million newlywed couples every year,” reported a spokesperson for Chow Tai Fook (CTF), a leading jeweler in Mainland China, Hong Kong and Macau, and the world’s largest jewelry retailer by market value. “Many of these couples are well educated and westernized and appreciate the wedding culture of the Western world,” the spokesperson continued. “This translates into a growing demand for bridal jewelry, diamond engagement rings and other wedding products.” Nancy Liu, president, Forevermark Asia Pacific, confirmed this. “China is a new entrant to the market for bridal jewelry and this new trend is very strong,” she said. Another emerging factor is the growing demand for pre- and post-bridal diamond jewelry, such as birthday gifts and presents for special occasions. “The pre- and post-bridal segments are huge,” Liu said. “Ten years ago, we didn’t see any of these indications and today, it is a clear trend,” she added, noting this development is “fantastic from an industry perspective.” According to Liu, the market for bridal versus nonbridal is 60 percent to 40 percent.. “Ten years ago, it was 90 percent nonbridal — a huge shift in the market.” CTF launched a bridal collection in Mainland China in 2013, supported by a viral marketing campaign to promote a “wedding proposal culture” across Mainland China and Hong Kong. The campaign, which encouraged couples to share video clips of wedding proposals online, was hugely popular and “successfully boosted the sales of wedding jewelry,” a spokesperson for the company said. “The market for diamond jewelry in Greater China is growing and expected to more than double in size in the next eight years. Greater China currently accounts for 12 percent of total market share globally and is forecast to grow to 25 percent by 2023,” Liu said. “We as a group, not only Forevermark, but the De Beers Group, are super-excited about the prospects. Despite all the challenges we see in retail, it is a fact that gem-set jewelry, diamonds in particular, is driving the growth for our retailers,” Liu said. Forevermark launched in Mainland China in November 2008 and sells through a partner network of reputable retail stores where they have a “shop in shop or brand corner,” Liu added. Hong Kong is also “very important” for Forevermark, which has a strong local clientele as well as a strong tourist base. Sixty percent of sales in Hong Kong are to tourists, the majority of whom are visitors from the Mainland.
There are some marked differences in the profile and preferences of Hong Kong local customers and those from Mainland China. “Hong Kong is a mature market,” Liu explained. “If we look into the jewelry box of a Hong Kong woman, she will have an average of ten pieces of diamond jewelry.” The majority of Hong Kong customers tend to buy stones ranging in size from 50 points to 1 carat and opt for higher color, higher clarity. Customers from Mainland China tend to buy smaller stones in the 30-point to 50-point size range, with a minority buying 1 carat. “It is a wider range and they will take up to SI, which is more difficult to sell to a local customer,” Liu added. Forevermark’s average selling price is similar in China and Hong Kong, $3,270 and $3,225 respectively. Solitaries are most popular, in particular, round stones. Rings are their best sellers, followed by pendants. Diamond solitaires are becoming increasingly popular.
Following its acquisition in summer 2014 by CTF, premium luxury diamond brand Hearts On Fire opened its first stand-alone store in Shanghai in December 2014 and a second store in Nanjing in January 2015. “Sales performance at both stores has met our expectations,” a spokesperson for CTF reported, noting the company is planning to open an additional six stand-alone stores by fiscal year 2016. “Fashionable and chic designer collections such as Aerial and Illa with an average selling price of $4,900 are popular among Chinese customers,” the CTF spokesperson said. The brand’s first “counter in shop” opened on May 1 in a CTF store in Tsim Sha Tsui, Hong Kong.
The retail market in Hong Kong continues to decline, with overall retail sales in March down 2.9 percent in value compared to a year ago, although there was a slight growth in volume of .8 percent. Total retail sales for the first quarter of 2015 decreased by 2.3 percent in value. The jewelry, watches and clocks category recorded the biggest drop of 16.6 percent in both volume and value. Swire Properties said that retail sales at its high-end shopping mall, Pacific Place in Admiralty, Hong Kong, fell 14.5 percent in the first quarter of this year. Overall sales dropped 6.1 percent in 2014, impacted by the Occupy Central protests in the Admiralty area.Article from the Rapaport Magazine - June 2015. To subscribe click here.
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