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Hong Kong
By Mary Kavanagh
Business Picking UpAfter six months of declining retail sales in Hong Kong, with the jewelry sector being particularly hard hit, there appears to be a pickup in the market. “We’ve seen a definite increase in business, which is typical come September,” said Sally Ryder, owner of Ryder Diamonds, whose main area of business is custom-made engagement rings. “September and October are our busiest months for engagement rings, which might sound odd, but we have definitely seen an uptrend to those months over the past few years. People are preparing now for proposals around the Christmas and New Year time frame, given the four- to five-week period it takes to craft a custom ring.” Although the overall sentiment in the market was “sluggish” over the summer months, Ryder said her business did better than expected, mainly due to the purchase of some large stones. “Business year to date is comparable to the same period in 2013, but I would have expected a growth in sales had it not been for difficulties in recruiting staff,” she said, noting that the government had rejected a visa application she submitted for a skilled new hire from the United Kingdom. “It’s really difficult finding local talent for diamond jewelry design,” she added, pointing out that her customers are predominantly expatriates, who come to her for a personalized tailor-made service where they can be involved in the design and production process from start to finish.
Demand for gem-set jewelry among customers of Chow Tai Fook (CTF), the world’s largest jewelry retail chain, remains strong. “Gem-set jewelry is increasingly popular among customers, in particular the fashion jewelry and youth line products,” said a company spokesperson. In a very successful recent product launch, the company partnered with G-Dragon, a famous Korean artist and fashion icon, in August 2014. The jewelry collection of bracelets and necklaces designed by G-Dragon targeted both his fans and young fashion-conscious customers. “The market response was so overwhelming that all products were sold out promptly on the launch day on both our etail platforms and at our brick-and-mortar stores, generating lots of discussion on social media,” said the spokesperson. Sales for the first half of CTF’s fiscal year were “not as robust as the same period in 2013,” according to the company, but the 2013 period was boosted by the rush to buy gold when there was a worldwide slump in prices. Business performance over the summer months in Hong Kong was also negatively impacted by the slowdown in growth of inbound tourists from Mainland China and a decrease in their spending in the city. “However, the market sentiment has been picking up since August this year, with the Mainland China market performing better than Hong Kong and other regions in recent months,” the CTF spokesperson added.
The Asscher cut has been in demand recently — mostly for use in engagement rings and earrings — and fancy yellow stones have also been popular, Ryder reported. “Interestingly, we had a strong interest in fancy yellow diamonds in July,” she said. “It’s not been a popular item for our type of clientele to date, but we have seen the trend improve and we made a number of sales in fancy yellows between 2 carats and 3 carats in July.” The trend continued through August for Ryder, when “we sold a couple of fancy yellows over 5 carats,” she said, noting that one was for a sixtieth birthday celebration and the other was an anniversary gift. She has also noticed a recent trend in more flexible pricing by dealers, who are “obviously keen to do more business and accept offers.” In 2013, Ryder launched a special collection of finished jewelry for Christmas and she plans to use existing inventory to produce a new collection again this year, mostly earrings and bracelets. In addition, Ryder said she also was “buying larger quantities than usual, mostly of stones smaller than 1-carat round. I’ll buy some more stock at the Hong Kong jewelry show if I can find good deals.”
On September 14, the Occupy Central With Love and Peace activist pro-democracy movement staged a march to the city’s financial district. The demonstration was a protest of China’s decision to screen all candidates for Hong Kong’s next chief executive in the first popular elections to be held in 2017. Pan-democratic lawmakers and pro-democracy activists in Hong Kong say this does not meet international standards for a truly democratic and open election and have vowed to veto the decision. Hong Kong’s Chief Executive CY Leung said on local radio that the protesters will need to explain themselves if they vote down the plan for universal suffrage, South China Morning Post reported. The government needs to secure the votes of at least four pan-democrats to pass the bill, yet all 27 have said they will vote against it. No date has yet been set by the Occupy Central movement for the mass sit-in it is said to be planning in the city’s financial district. Business owners are concerned as to how such a protest would impact retail business in the city.Article from the Rapaport Magazine - October 2014. To subscribe click here.
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