Investor and retailer optimism was high ahead of this year’s
Golden Week holiday in China, which coincided with another important date in
the Chinese calendar, the Mid-Autumn Festival. The two combined to form what
was dubbed “Super Golden Week,” running for eight days — from October 1 to 8 —
instead of the usual seven.
Daily retail sales during the holiday rose at a double-digit
pace, the Chinese government reported, similar to figures for the same period
last year. Average daily sales of retailers and catering firms increased 10% to
$226 billion over those eight days, compared with an increase of 11% during the
2016 holiday period and 11% in 2015. However, the national holiday also saw new
home sales in Beijing fall to 116 units, the lowest since 2009, according to a
report from Centaline Property, which further cited a 78% drop in new home
sales in Shanghai.
Chinese tourists typically come out in force during Golden
Week, and this year was no exception: The National Tourism Administration
reported 705 million trips during the holiday, an increase of 12% compared with
last year’s seven-day holiday. Mainland visitors to Hong Kong increased 5.9%
year on year, and retailers in the city reported robust sales over the first
couple of days, although the momentum appears to have slowed after the
Mid-Autumn Festival.
Lau Hak Bun, jeweler Chow Sang Sang’s general manager for
Greater China operations, reported a 15% increase in visitors to the group’s
jewelry outlets in Hong Kong over the first three days of the holiday, and
double-digit growth in sales, with the average unit price jumping from about
$1,150 (HKD 9,000) before the holiday to approximately $1,280 (HKD 10,000).
“Sales went back to normal right after the Mid-Autumn
Festival, when visitors returned home for celebration. They left early to avoid
the peak traffic. I was surprised that the brisk sale period was so short,” Lau
said.
Meanwhile, Chow Tai Fook noted an improvement in customer
traffic at its stores recently, and expects to see high-single-digit to
low-teen growth year on year from Golden Week sales in Hong Kong.
The jeweler has also launched a new retail concept in the
municipality to provide customers with a more interactive shopping experience.
“We recently introduced two experiential points of sale in Tsuen Wan and Yuen
Long with refreshed store layouts and design concepts, to appeal to the younger
customer profile and brand positioning of their respective shopping malls,” the
company spokesperson said. “For instance, the one in YOHO Mall in Yuen Long is
furnished with a pinkish ‘gift box’ concept, projecting an energetic image.”
Retail sales in August rose 3.2% by volume and 2.7% by value
year on year, marking the sixth month of consecutive growth. Although the
figures are more modest than July’s — which were up 4.5% by volume and 4% by
value — they are indicative of an ongoing market recovery. Overall sales for
the first eight months of 2017 were 0.3% higher than in the same period last
year. August sales of jewelry, watches, clocks and valuable gifts grew 7.3% in
volume and 10.2% in value year on year, continuing the trend that saw July’s
value figures in this category jump 12.9%.
“The near-term outlook for retail sales should
remain positive, given the favorable job and income conditions and
stabilization of inbound tourism,” a spokesperson for the government said,
adding that “various external uncertainties continue to be a concern.”
Article from the Rapaport Magazine - November 2017. To subscribe click here.