Post the ‘Occupy’ protests, tourists from mainland China are ditching Hong Kong as travel and shopping destination, resulting in a major sales slump for Jewelers across Hong Kong. Emperor Watch & Jewellery Ltd. witnessed a decline in its season sale by as much as 40% and the full year sales decline of 30%.
Its competitor, Chow Tai Fook – world’s largest jewelry retailer, which depends on around 60% of its HK sales from mainland Chinese shoppers, also is about to register around 30% sales decline, according to Albert Yeung Sau-shing – Group Chairman of Emperor Watch & Jewellery. Similar results are also expected at Luk Fook Holdings International Ltd.
Following the negative sentiments, there was a drop of 80% in tour group from mainland China coming to HK, who are now visiting new destinations including Japan and South Korea. Chow Sang Sang has mentioned that after the recently recorded double-digit drop in sales, local jewelry retailers may register a single-digit sales decline during the May holiday period.
Recently released Credit Suisse report has cut the growth forecast for Hong Kong economy from 2.4% to 1.6%, suggesting that any retail revival in HK is not around the corner. Though, the adverse scenario, biggest since 2003 SARS pandemic, has affected all retailers, HK jewelers who highly rely on the Chinese tourist spending have been badly hit.
Apart from the negative sentiments resulting from the protests, stronger Hong Kong Dollar and rise in outbound tourists have also been cited as some of the reasons contributing to the declining retail economic landscape in Hong Kong. But the geopolitical cross-border tensions remain the prime driver behind this retail slump.
Despite the recently concluded 32nd HKTDC Hong Kong International Jewellery Show 2015, jewelry retail sales in HK have failed to pick up and any continued retail slump will develop in injurious problems for Hong Kong Jewelers.