Retail sales in July increased by 4% in volume and 4.6% in
value — the highest year-on-year growth since February 2015. Sales of jewelry,
watches, clocks and valuable gifts grew 12.9% in value, compared to a decrease
of 0.8% in June. This was the biggest increase in this category for almost four
years.
The Hong Kong government attributed the improvement to an
increase in local consumption and an uptick in inbound tourism to the city.
While the government was positive about the trend continuing in the second half
of the year, a spokesman noted that “the near-term performance of retail sales
will also hinge on the recovery pace of inbound tourism amid various
uncertainties in the external environment.”
The Hong Kong Retail Management Association (HKRMA) was also
pleased with the July performance.
“The growth is much better than we expected,” said
association chairman Thompson Cheng, predicting that full-year growth for 2017
would be around 1%, in spite of a 0.6% decline in the first half of the year.
“HKRMA members are looking forward to steady growth for the
coming months,” he added.
Industry leaders participating in a press conference at the
September Hong Kong Jewellery & Gem Fair also pointed to signs of recovery
in the market in recent months and appeared hopeful the trend would continue
through year’s end.
Kenneth Cheung, director of Edelweiss Jewellery Company — a
Hong Kong diamond-jewelry manufacturer and wholesaler — reported a slight
improvement in the local retail market, and a stable European market for
exports. However, he noted a drop of 10% to 20% in exports to the US compared
with last year.
Meanwhile, jeweler Chow Sang Sang saw an upswing in sales
for the first half of 2017, following a three-year decline. Jewelry retail
sales increased 2% year-on-year, accounting for 87% of overall group sales,
which rose by 3%. Same-store sales for the period fell 3% in Hong Kong and
Macau, although three of the six months recorded positive growth, including
June. This decrease was still a vast improvement over the 26% drop for the same
period in 2016. Same-store sales in China for this year’s first half jumped 8%,
with gold performing particularly well, as it was coming from a low base.
Chow Sang Sang continued to realign its sales network in
Hong Kong and mainland China to meet changes in consumer patterns and
preferences. In Hong Kong, it opened one new store and closed three, while in
China, it opened 29 and shut eight, bringing the total number of stores at the
end of June to 395 in 116 cities.
The trend toward increased online sales continued in the
first half, with such sales accounting for 13% of Chow Sang Sang’s total sales
in China. The company plans to continue expanding its e-commerce business.
Kent Wong, chairman of the Hong Kong Jewelry Manufacturers
Association, reported steady retail growth in Hong Kong over the past couple of
months, driven by the rise in tourist numbers. He noted even better improvement
in China, with growth in e-commerce leading the way. “Companies are
increasingly adapting online/offline strategies,” he said. “We also need to
offer customers an in-store experience, not only sell to them. Customers want a
themed experience, and this will play an important role in the future in
attracting them to the store.”
Article from the Rapaport Magazine - October 2017. To subscribe click here.