China’s enthusiasm for luxury jewelry will be top focus as Asia’s largest spring jewelry fair gets under way next week. The 28th Hong Kong International Jewelry Show at the Hong Kong Convention and Exhibition Center will run from March 4-8.
Hong Kong’s jewelry retailers are getting stellar business thanks to China’s growing number of big spenders.
Jewelry sales in China last year made China the third biggest market globally, just after the U.S. and Japan, with sales totaling $30 billion US.
An example of the China opportunity is Hong Kong jeweler, Luk Fook’s most recent six-month profit surge in which mainland shoppers accounted for about 80 percent of its HK$3.26 billion revenue.
The drive to own beautiful and expensive jewels goes beyond fashion to cultural significance. Marketing and social science gurus often point out that in China owning jewelry is a way of telling the world one has arrived. A diamond ring, for example, is a sign of achievement.
That desire to own fine jewelry was especially evident during the Lunar New Year, with large numbers of Chinese visitors to Hong Kong buying up luxury goods. Chow Sang Sang Holdings’ jewelry revenue rose 17 percent in the first seven days of the Lunar New Year and 12 days leading up to it, said Dennis Lau, director of sales operations. The biggest-ticket item sold by Chow Sang Sang during the period was a HK$300,000 ($38,500) diamond bought by a customer from mainland China.
Meanwhile, the Hong Kong jewelry market is hardly dependent on the next New Year rush of tourists or even the next month’s tally of tourists from China. Like clothing retailers, they are showing aggressive signs of taking root on the mainland. Some recent examples:
Chow Tai Fook, which is the largest seller of jewelry and watches, will double the number of its outlets in China to 2,000 over the next five years. This year alone it expects to open 100 outlets. Asia Times Online reports same-store sales jumped 20 percent in 2010 thanks to mainland customers.
Luk Fook Holdings has been opening about 110 stores either directly run or licensed over the past six months, most of them are on the mainland. It operates 630 stores on the mainland, 31 in Hong Kong and five in Macau.
The company expects some 15 to 20 percent annual growth in same-store sales.
As for total market share of jewelry sales in China, Chow Tai Fook has a 10 percent market share. Chow Sang Sang follows, according to the China General Chamber of Commerce.
image credit: luk fook