Hong Kong Recovery Boosts Jewelry Sales

Sales of jewelry, watches and other luxury items in Hong Kong rose in the first 11 months of 2017 as tourists returned and local consumer sentiment recovered, the city’s official data authority said.

Retail sales for the category grew 5% year on year to $8.49 billion (HKD 66.35 billion) for the January-to-November period, Hong Kong’s Census and Statistics Department said in a statement Wednesday. November proceeds jumped 8% to $783.1 million (HKD 6.12 billion), it added.

Sales across all retail products rose 1.8% for the first 11 months, and climbed 7.5% in November, reflecting the “visible growth in visitor arrivals and the [optimistic] consumer sentiment during the period,” a spokesperson for the Hong Kong government said.

Hong Kong’s luxury retail sector is largely reliant on purchases by tourists from mainland China. A slump in visitors from that location hit Hong Kong’s retail industry over the last two to three years, with sales of jewelry and other luxury items sliding 17% in 2016. However, the tourist sector recovered this year: Visitors from mainland China rose 3.6% from January to November, to a total of 40.2 million, according to the Hong Kong Tourism Board.

Meanwhile, the total number of tourists arriving in Hong Kong from all locations jumped 7% to 5 million in November compared with the same month last year. During the first 11 months of 2017, the figure climbed 3.1% to 52.9 million.

As a result, Hong Kong jewelry retailers saw significant improvements in their 2017 performances. Chow Tai Fook’s same-store sales jumped 9.5% in Hong Kong and Macau in the six months ending September 30, while Luk Fook recorded 13% growth in retail sales for the same region.

“The near-term outlook for retail sales remains positive, as consumer sentiment is buttressed by the favorable employment and income situation, and as inbound tourism continues to recover,” the government spokesperson noted.

The upturn in 2017 also affected the diamond trade, with imports of polished stones into Hong Kong growing 7% to $14.07 billion in the first nine months.