The forecast for the Hong Kong diamond market as well as jewelry in 2014 is looking promising. The Hong Kong Trade Development Council projects that exports will increase by 5.5% in value. A significant increase from the 3.5% predicted for the 2013 year. This is welcome news and a positive indication that Hong Kong exports are back on the path to pre-recession growth. The South China Morning Post reported that the UBS financial services expect that the Hang Seng Index to gain at least 15% in 2014. Due to improved earnings, growth in consumption, and a rise in Internet commerce and increased profits by non-bank financial firms.
Hong Kong Diamond Market and the Gold Rush
In April 2013 there was a sharp decline in gold prices. And this directly affected the Hong Kong diamond market. The subsequent results of this price decline brought about a gold rush for consumers. And spending as prices for items suddenly became more profitable. This translated into gains for major Hong Kong retail jewelers such as Chow Tai Fook Jewelry and Lukfook Jewelry; both companies recorded impressive profits and revenue for the six months that ended on September 30, 2013.
Chow Tai Fook announced a 92.3% increase in profit from year-to-year. And an increase of 48.5% in revenue over the same period in 2012 and a 72.9% increase in net profit. Both record highs. Chow Tai Fook Diamonds and Jewelry will be opening 118 new retail stores during the first half of the 2014 fiscal year; bringing their total amount of store locations to 1,954. The company said it will look to increase its presence in the Tier III and lower tier cities throughout China. Lukfook recently opened 110 new outlets during the same time. Bringing the number of its store locations to a total of 1,188.
Mainland Visitors Keeping Hong Kong Diamond Market Business Afloat
The major contributors to the Hong Kong diamond market are mainland Chinese consumers. Chow Tai Fook and attributed 60% of its retail sales in Hong Kong and Macau to mainland Chinese consumers and reported that total 80% of its business came from mainland Chinese customers. Its largest rival, Lukfook Diamonds & Jewelry shares a similar customer profile as that of Chow Tai Fook.
Hong Kong again to be a key market contribute to 64.1% of the companies total increase of 67% compared to 2012. Approximately 60% of the sales were to visitors from mainland China. Hong Kong also is a popular destination for tourism and was predicted to reach 54 million in 2014 up 11% from the previous years. The number of mainland visitors increased 18% in the first 10 months of 2013 to 33.5 million.
Holiday Season
Director of Brilliance Trading Company (BTC) a diamond manufacturer, wholesaler and retailer says. "Christmas sales were steady but not very exciting, we are making money but not as much as before" said Vincent Yiu, speaking of the 2013 holiday season. Yiu also maintained that sales volume were similar to that of the 2012 season and that margins were smaller than predicted. The company Chow Tai Fook was considerably more enthusiastic about its sales.
"Christmas sales were steady but not very exciting, we are making money but not as much as before" said Vincent Yiu, speaking of the 2013 holiday season. Yiu also maintained that sales volume were similar to that of the 2012 season and that margins were smaller than predicted. The company Chow Tai Fook was considerably more enthusiastic about its sales.
Retail and the Hong Kong Diamond Market
A spokesperson for the company reported that sales in the run-up to Christmas were better than expected following the rollout of the company's annual sales campaign in Hong Kong in early November; a spokesman added that "the market picked up momentum gradually, sales during the Christmas holiday to rise by a double-digit percentage compared to sales in 2012.
Hong Kong diamond market experts predict mass luxury jewelry segment, including gold products. As well as gem set jewelry and platinum and karat gold products to continue to drive the growth momentum. Several factors are contributing to this positive growth. Retailers note that wedding jewelry in China are strong sellers as well as an influx of mainland Chinese buyers. Other contributing factors. Including a rising middle class with disposable incomes as well as an increase in tourists with lenient tourism laws. The Chinese New Year, the year of the horse in 2014 officially begins January 31 and is expected to bring about even more consumerism.
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Hong Kong Diamond Market is strengthening.