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Hong Kong
By Mary Kavanagh
Retail sales in January declined for the twenty-third consecutive month, yet showed a narrower decline in both sales value — .9 percent — and sales volume — 1.4 percent, — year-on-year, as well as a smaller decline than the 2.9 percent drop in sales value in December 2016. The January figures may be somewhat affected by the difference in timing of the Chinese New Year holiday period, which fell in late January and early February in 2016. “It would be more meaningful to examine the figures for January and February combined, when available, to have a clearer picture of the underlying trend,” a government spokesman said. “Looking ahead, the near-term outlook for the retail sales business will continue to depend on the performance of inbound tourism and on whether local consumer sentiment would be affected by the various uncertainties in the external environment,” a spokesman said.
Although the number of Mainland visitors to Hong Kong has increased again recently, spending is down. Mainland visitor numbers grew 6.1 percent in December and 7.7 percent in January, compared with a 6.7 percent drop for the entire year of 2016. But the strong Hong Kong dollar — pegged to the U.S. dollar — has driven up prices for goods and services in the city, negatively impacting their spending. Thomson Cheng, chairman of the Hong Kong Retail Management Association (HKRMA) said, “Currency fluctuations have a bigger impact on valuable products than smaller items,” noting Mainland Chinese are now buying these luxury goods in places with a favorable local currency, such as Japan. “With the city’s currency linked to the U.S. dollar, valuable goods have become more expensive, especially for visitors from the Mainland,” he added. Last year, more than 6 million Chinese visited Japan, spending an average of $2,000, more than twice that of the average tourist. The HKRMA said it expects sales to continue to fall this year, although at a slower pace. Jacques Branellec, CEO of Jewelmer, a French-Filipino company specializing in golden South Sea pearls, told CNBC Asia’s Squawk Box program recently, “What we’ve seen in terms of the Mainland luxury shoppers, a lot of them have actually migrated to Japan. So in our location in Ginza, we’ve seen a huge growth from the Chinese Mainland tourists that we used to see in Hong Kong.” Chow Tai Fook (CTF), the world’s largest jewelry retailer by market value, recently announced a plan to open its first retail store in Japan in partnership with Laox, a Japanese tax-free store operator. Rather than Japanese customers, the target market is Mainland Chinese tourists. “Seeking to tap into the growing demand for leisure spending of Chinese, we are thrilled to partner with Laox to provide our customers in Japan with high-quality products,” said Kent Wong, managing director at CTF.
The fourth edition of the Hong Kong Trade Development Council (HKTDC) Hong Kong International Diamond, Gem & Pearl Show and the 34th Hong Kong International Jewelry Show took place at two venues in the city from February 28 to March 4. The shows attracted a combined total of more than 85,000 buyers, up 6 percent on 2016, according to HKTDC. David Nazer, managing director of Haywards, a bespoke jeweler specializing in engagement and wedding rings, said the show is useful for learning about the latest technological developments or new design equipment and new trends. He doesn’t tend to source his diamonds there. “For diamonds, it’s very rarely that you get any added value,” he said. “You could meet new suppliers, but it’s not a necessity with so many people cold calling. The only added value might be if you were looking for something more unusual, such as a 5-carat or 6-carat diamond in an unusual cut, there might be more stock,” he added. Tayma Page Allies, founder and creative director of Tayma Fine Jewelry, exhibited at the show for the first time, using it as a platform to launch her gemstone collection. “I’m not a gem trader, I’m a collector looking to sell my collection,” she said, noting there was a lot of interest in her stones, but people were not buying. Tayma is known in Hong Kong for her one-of-a-kind jewelry pieces using precious and semiprecious gemstones, which are sold at her shop in Central. Her presence at the fair was primarily a brand-building exercise to generate interest in her finished jewelry.Article from the Rapaport Magazine - April 2017. To subscribe click here.
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