Jewelry sales decline, as well as luxury items in Hong Kong, fell during the month of August. Thus making it the largest month of jewelry sales decline on record while protests rage in the city. Furthermore, their tourism industry has seen a large decrease in volume as well. While jewelry sales decline revenue from watches, clocks and other valuable gifts dropped 47 percent year on year to HKD 3.93 billion ($501.3 million) during the month. The report by Hong Kong's municipality’s Census and Statistics Department read on Wednesday. This is a steep monthly decline for jewelry since the department started publishing its results in 2005. Thus, according to the public data archive, overall jewelry sales decline, as well as luxury items categories, decreased 23% to HKD 29.36 billion ($3.74 billion).
Due to the bevy of demonstrations in Hong Kong jewelry sales decline. The protests stem from a proposed extradition bill and have been steadily increasing since June. All the while, luxury stores, train stations, and the city’s airport have been periodically shut down. Furthermore, while the bill has been removed, tremendous unrest continues to permeate. With the police force reportedly shooting an 18-year-old protester Tuesday. Also, more than 100 people, including 30 police officers, are currently hospitalized due to the increase in violence.
The situation in Hong Kong The situation has led to a large decrease in travelers and prospective buyers from China and abroad. Thereby causing tremendous damage to the local economy and thus leading to jewelry sales decline. The number of tourists visiting Hong Kong was down 39% to 3.6 million in August. Furthermore, of those, 2.8 million came from mainland China, a steep decline of 42% over the same time the previous year. A government spokesperson explains that "the overall retail decline was “even worse than that recorded in September 1998 during the Asian financial crisis. Apart from the weak consumer sentiment amid subdued economic conditions, the plunge in August mainly reflected the severe disruptions to inbound tourism and consumption-related activities caused by the local social incidents.”
“Retail sales will likely remain in the doldrums in the near term, as the worsened economic outlook and local protests involving violence continue to weigh on consumer sentiment and inbound tourism,” a government spokesperson explains. Therefore the government expects a continue in weakness as conditions persist. Furthermore, the Swiss bank UBS also predicts a continuation of jewelry sales decline in the market. Also, they note that a more difficult and challenging outlook for hard luxury is on the horizon. This includes luxury jewelry and watches, as well as designer bags, leather and clothing.
A bank spokesperson explains that "this is particularly prevalent in the Chinese market, with hard luxury more exposed to recent [yuan] depreciation and protests in Hong Kong. Because of their long-term availability and high price tag, these are less likely to benefit from repatriation of demand in case of short-term disruptions in Hong Kong. Note that 50% of Chinese diamond jewelry was purchased in Hong Kong in 2018, [so] the near-term disruptions to sales [are] likely to be significant.” Thereby leading to the jewelry sales decline. Furthermore, in just the first eight months of the year, retail sales of jewelry, watches, clocks and other valuable gifts fell a whopping 14 percent to HKD 50.06 billion ($6.38 billion). Therefore, one can estimate that the sales in all retail categories for the January-to-July period fell 6% to HKD 305.05 billion ($38.9 billion).
Diamonds and gems, as well as jewelry sales decline as protests rage.
Jewelry Sales Decline for Engagement Rings and other luxury goods.
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