The summer months are typically quiet for the jewelry
industry in Hong Kong. Retail sales in June continued to show signs of
recovery, following an increase for the fourth consecutive month. This was a
positive change after two years of decline. Overall sales in June went up 0.1%
in value year on year, and total sales volume expanded by 0.4%. Sales of
jewelry, watches, clocks and valuable gifts dropped 0.8% in June, compared to
an increase of 1.4% in value in May.
Seeing some improvement on the market, jewelers are
optimistic about the September jewelry show and the rest of the season.
“There is more active interest, but it has not yet
translated into sales,” Simon Zion of Hong Kong-based jewelry supplier Dehres
said, noting that there was still some uncertainty given the market’s
unpredictability. “There have been no big changes in buying patterns. It is
still very sporadic and random in terms of what people are buying — there is no
specific trend or pattern.”
June sales performance was better than expected, considering
that visitor numbers from the mainland were down and there were many rainy
days, noted Thompson Cheng, chairman of the Hong Kong Retail Management
Association (HKRMA). He predicted that retail sales for the whole year would
grow slightly — in the region of 1% — or remain flat.
Meanwhile, jewelry retail chain Luk Fook reported overall
same-store sales growth of 5% year on year for the first quarter ending June
30. Same-store sales in Hong Kong and Macau rose 3%, whereas sales in mainland
China jumped 23%, driven by a 32% increase in gold products. The company said
its strategy of enhancing offerings of good value-for-money gold products had
been effective. Same-store sales of gem-set jewelry products went up 9% in the
Hong Kong and Macau market, whereas sales of gold products remained flat.
“The traffic for the September show is usually quite
decent,” Zion said. “We expect an increase in demand, and more transactions
this time from Asian customers…. We’ve only seen our old US customers return to
the show in the past two years for the first time since the financial crisis in
2008,” he added, declaring this a sign that the US market had improved.
Since there are now many more local shows than there were in
the past, it is no longer as necessary for US and European customers to travel
to the Asia show, Zion continued.
“I think there has been a negative effect on the
finished-jewelry show since they split the shows some years ago,” he added.
“The AsiaExpo show has a clear advantage, as it starts earlier, so customers
come early to attend it and don’t always stay around to visit the second venue,
which starts later. They buy what they need and leave.” It would make more
sense, he said, for the finished-jewelry section to start first, and then the
jewelers could stock up at the loose-stones section.
The 35th edition of the fair will take place at two
different venues in the city from September 13 to 19. At the materials section
at the Asia World-Expo from September 13 to 17, more than 1,700 contributors
will exhibit diamonds, gemstones, pearls and loose stones. Fine jewelry
exhibitors will showcase finished jewelry from September 15 to 19 at the Hong
Kong Convention & Exhibition Centre.
Article from the Rapaport Magazine - September 2017. To subscribe click here.