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Hong Kong
By Mary Kavanagh
Retail sales in Hong Kong grew in September for the second consecutive month following several months of decline, according to the Hong Kong Census and Statistics Department. Sales grew by 4.8 percent in value and 6.6 percent in volume compared to the same month in 2013 and were up from the 3.4 percent and 2.8 percent monthly increases, respectively, recorded in August 2014. Sales of jewelry, watches and clocks, and valuable gifts increased in sales value by 2.7 percent in September over September 2013 — marking the first increase in this slumping category since March 2014. The overall retail numbers in the consumer durable goods category reportedly were boosted by the introduction of the popular new iPhone models. The government cautioned that the September figures did not reflect the effects from the Occupy Central pro-democracy demonstrations, which have disrupted sales and traffic in key business districts in the city since late September. The impact of those disruptions could be assessed more comprehensively after the release of October sales figures.
The ongoing Occupy Central protests also prompted the government to lower its full-year 2014 economic growth forecast to 2.2 percent in spite of the fact that the city’s growth was strong at 2.7 percent in the third quarter, surpassing the 2 percent rise that had been expected by economists. The revised forecast is at the lower end of the predicted annual estimate of 2 percent to 3 percent growth issued in August. The Hong Kong Trade and Development Council (HKTDC) reported that the seasonally adjusted unemployment rate for July through September 2014 was 3.3 percent — close to the lowest level in 16 years. It also said that consumer prices increased 4.2 percent year on year in the first nine months of 2014, with consumer prices for the year as a whole forecast to increase by 4.4 percent.
Business is starting to pick up as the Christmas holiday season approaches. “We had a good summer, then it went a bit quiet and now we are getting busy again,” said David Nazer, managing director at Haywards. The company specializes in the design and manufacture of custom jewelry, including bespoke engagement and wedding rings, for the expatriate market. Nazer noted that the run-up to Christmas tends to be a busy time for engagement rings and wedding rings, which account for approximately 50 percent of the company’s business. This holiday season, Haywards is expanding its ready-to-wear Christmas collection, which it introduced on a small scale in 2013. “I am hoping that the Christmas range we are putting together will do well,” said Nazer. “As a bespoke jeweler, Christmas can be difficult because our projects take us three weeks to four weeks to make, so if someone walks in a week before Christmas to buy a pair of earrings — unless we have something ready to hand him, there is nothing we can do for that customer. Retailers, on the other hand, can sell right up to and including Christmas Eve.” A special collection ready for immediate sale, he said, should help satisfy last-minute requests from customers.
Nazer said his company witnessed a trend of increased interest in yellow diamonds firsthand at a wine-and-dine event it recently hosted for a select group of affluent clients from Mainland China who are living in Hong Kong. Fancy yellow stones in 4-carat to 5-carat sizes were very popular, as were radiant cuts. According to Nazer, demand for yellow gold and rose gold jewelry also has increased. “Two years ago, we sold one item in those colors a year and now we sell one a month,” he said. More and more clients, predominantly female, are also having jewelry they already own redesigned and updated using the old diamonds and stones. “The resale market for diamonds in Hong Kong is not particularly good,” Nazer said, adding that his own company does not “buy back” its jewelry and the price clients receive when reselling older diamonds tends not to be very good. “I usually advise my clients that they are better off to remodel an old engagement ring as a pendant or something else rather than resell it,” said Nazer. People get more value out of spending money on creating a new piece of jewelry using their existing diamonds than in reselling the item and buying a new piece of jewelry. “If the resale market for diamonds was better, people would be more incentivized to sell,” he said. Nazer has also seen a continuation of the trend for vintage-style jewelry, especially with fancy shapes such as emerald and cushion cuts. “Vintage is still very popular among all age groups,” he said. “One-quarter or perhaps even one-third of the engagement rings we make have a vintage character to them.”Article from the Rapaport Magazine - December 2014. To subscribe click here.
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