Jewelry sales in Hong Kong saw a decline in the quarter ending 2018 and this is likely to continue to the first quarter of 2019.
According to reports, Chow Tai Fook, the largest jeweler in the world in terms of market value, logged a 6 percent drop in sales for October to December compared to the previous year. Factoring in sales in its Mainland China and Macau businesses, it dropped a total of 11 percent. The weak numbers come despite having opened five new branches in Hong Kong in 2018, writes Retail News Asia. In its filing with the HK Stock Exchange, Chow Tai Fook attributed the drop to market uncertainty on a macro level.
Luk Fook, one of the largest jewelry companies in Hong Kong, shares the same fate, reporting a 9 percent decline in gold product sales and 8 percent drop in gem-set products in Macau and Hong Kong for the same period for its self-operated stores. In an article on Diamonds.net, the firm said that its weak performance was largely affected by the China-US trade war, pressure on the property and stock markets in the country, as well as the depreciation of the Chinese currency. In the Mainland alone, same-store gold products saw their sales plunge 16 percent, while gem-sets dropped 5 percent.
The negative effects of a tightening Chinese market have been pinching consumers' buying ability, at least in terms of their attitude towards jewelry. Even with new infrastructure set up in the form of two high-speed rails that connect Hong Kong too many key destinations in the Mainland, consumers traveling into the city have been observed to spend their money more on their necessities and experiences than on accessories and jewelry.
In 2019, the outlook for jewelry consumption remains cautious as the China-US trade war continues to be unresolved and property prices remain unpredictable. The jewelry, clocks, and watches industry make up almost 1/6th of the total nominal value of retail sales logged towards the end of 2018. Its reported 3.9 percent drop in November 2018 is said to be the largest contraction among the key retail categories. The presence of the new rails should be able to bring in big spenders as 2019 moves forward.
