Tsim Sha Tsui, a popular shopping area in Hong Kong, in July this year. TZIDO SUN / Shutterstock.com
Hong Kong’s major jewellery retailers reported weaker sales in the second quarter of their respective fiscal years owing to continued protests in the city and lower tourist arrivals, coupled with uncertainties in the world market.
Chow Tai Fook Jewellery Group Ltd’s unaudited key operational data for the three months ending September 30 showed a slump in sales performance in China, and Hong Kong and Macau, which could also be partly attributed to rising gold prices. Same store sales in China fell 7 percent during the period in review, compared to a 42 percent drop in Hong Kong and Macau.
Luk Fook Holdings (International) Ltd, for its part, said second-quarter sales for financial year ending March 31, 2020 plummeted 37 percent, which it traced to “a relatively higher base, strong gold price, and the continuing impact of social incidents in Hong Kong and the US-China trade war on market sentiment.” Lukfook said a substantial decline in the number of visitors to Hong Kong also contributed to lower retail sales. Data from the Hong Kong government showed that tourist arrivals in Hong Kong fell by almost 40 percent to 3.6 million in August this year from 5.89 million a year ago.
Lukfook's jewellery sales in China registered a 25 percent decrease while those in Hong Kong and Macau were down 39 percent.
Gold loses lustre
Chow Tai Fook said sales of gem-set jewellery in China were flat while those in Hong Kong and Macau declined by 35 percent as consumers held back spending. Gold products however bore the brunt of lacklustre consumer sentiment. China saw a 15 percent drop in sales of gold products while sales of these items in Hong Kong and Macau slid by 49 percent.
Average selling price also jumped to HK$4,900 from HK$3,900 in Q2 FY2019 in China and HK$9,200 from HK$8,500 in Q2 FY2019 in Hong Kong and Macau, according to Chow Tai Fook.
Lukfook’s total sales of gold products also fell 43 percent, which translates to a drop of 28 percent in China and 46 percent in Hong Kong and Macau. Overall gem-set jewellery sales were down 25 percent, with China suffering an 18 percent setback, and Hong Kong and Macau's gem-set jewellery sales declining by 26 percent, added Lukfook.