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Hong Kong
By Mary Kavanagh
Retail sales in Hong Kong in March increased for the first time since February 2015. Sales grew 3.1 percent in value and 2.7 percent in volume year-on-year, reversing an extended period of decline. Sales in the jewelry, watches and valuable goods category increased by 8.4 percent in value in March compared to an increase of 2.5 percent in February. “The March sales are encouraging. We are very close to the end of the tunnel,” said Thomson Cheng, chairman of the Hong Kong Retail Management Association (HKRMA). Cheng attributed the positive March numbers largely to short-term factors, such as the increase in Mainland visitors to Hong Kong because of a weaker Hong Kong dollar and worsening relations between China and South Korea. Although it’s uncertain if the recovery is sustainable, HKRMA members were more positive than in the past and most of them predicted a mild positive growth in April and May, and reported better sales in April and during Mainland China’s May 1 Labour Day public holiday. Mainland visitors to Hong Kong over the May 1 holiday were up 3.7 percent year-on-year, the highest rise in five years, and increased 8.8 percent in March compared to a 2.7 percent decline in February. A government spokesman attributed the moderate growth in March sales to “the continued recovery in visitor arrivals and partly the robust local consumption demand underpinned by favorable job and income conditions.”
Sally Ryder, founder and creative director of Ryder Diamonds, acknowledged the past year has been challenging for business. “We have definitely seen a downturn over the past 12 months,” she said. “We’ve had to work harder to reach the same targets of a year ago. All of our dealers have been pushing for business with us, so it tells me we’re not alone with the challenges of the current market. Our target market is expatriate executives and I’ve heard of many job redundancies and expatriates leaving Hong Kong over the past 12 months. This has definitely had an impact on our business and made us pay closer attention to the efficiencies in our business.” Ryder’s core business is engagement rings, but an equally important focus area is upgrading old jewelry. “We love doing the big stuff, but the $12,000 to $26,000 —100,000 to 200,000 HKD — budgets are still our bread and butter,” she said. Ryder has seen fewer customers compared to 2016, but they have not reduced their spending. She likes to offer value for money. “Our advice to clients is value for money and beauty, so we tend to only recommend high color and lower clarity to achieve this.” Luk Fook, one of the city’s popular jewelry retail chains, reported its first quarterly growth for same-store sales in three years for the fourth quarter that ended on March 31. Same-store sales overall rose 2 percent, driven by an increase of 11 percent in sales of gem-set jewelry and an improved performance by stores in Hong Kong and Macau.
Focusing on customers’ needs and customizing jewelry designs to their specific requirements is a competitive advantage for some of Hong Kong’s jewelry manufacturers, including Ryder Diamonds and Bee’s Diamonds. “Bee’s has always prided itself on its award-winning customer service that focuses on personalization,” said Bee Ng, founder and CEO of Bee’s. “We believe that businesses should focus on meeting customers’ needs and making an impression at every encounter instead of trying to push for sales. The diamond market will improve if all merchants believe that the quality of customer service will benefit sales in the long run and not try to be too pushy,” he added, noting that this approach has worked very well for them even in tough economic times. “That’s how we were recently awarded — as the only diamond wholesale company — the Award of Merit from the Quality Tourism Services (QTS) Scheme for five continuous years of ranking in the top 10 percent of serviced jewelers in Hong Kong,” he added.
According to Ng, market conditions will remain similar in the second half of 2017, and “customers will stay positive yet conservative.” In order to effect change in the market place, Bee’s encourages people in the industry to instill confidence by building inventory of quality diamonds instead of being fearful and not moving forward, which Ng says, “will not do the industry any good as a whole. We all need to support each other by making some purchase to get the market moving.” Ryder is upbeat about the rest of the year. “The current economic conditions have been challenging, but we’re using the downturn to focus on business efficiencies and strategy planning. I’m feeling positive about the outlook,” she said.Article from the Rapaport Magazine - June 2017. To subscribe click here.
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