Hong Kong: Chinese tourists visiting Hong Kong in record numbers over the Lunar New Year holidays boosted retail sales by splurging on diamonds, cosmetics and watches.
Chow Sang Sang Holdings International's revenue climbed 17 per cent during the first week of the Lunar New Year and the 12 days leading up to it, according to Dennis Lau, the jeweller's director of sales operations.
Greater China will be the world's biggest market for high-end products in a decade, growing 21 per cent a year on average, according to Aaron Fischer, a Hong Kong analyst at CLSA.
That growth is a boon for Hong Kong, a favoured destination for Chinese shoppers, where tax-free luxury goods cost 30 per cent less on average and the risk of counterfeit products was low, Fischer said.
"Per-capita spending on watches in Hong Kong is off the charts," Fischer said in a briefing. While the Chinese have been big buyers of luxury goods for several years, "growth seems to be accelerating," he said.
Visitor arrivals to the former British colony from mainland China during the country's February 2 to 8 holiday period reached a record 663,000, surpassing last year's 570,000, according to data from the Hong Kong Immigration Department.
That helped retailers such as Chow Sang Sang, where the biggest-ticket item sold during the period was a $300,000 Hong Kong (Dh141,351) diamond bought by a customer from mainland China, Lau said in a phone interview.
"Our sales representatives at the Rolex and Tudor boutique in Tsim Sha Tsui were so busy with customers that they had no breaks at all," said Anna Luk, Emperor Watch and Jewellery's investor relations manager.
LVMH Moet Hennessy Louis Vuitton, the world's biggest luxury goods maker, owns a 7.4 per cent stake in Emperor, whose market value more than doubled last year. Breguet watches selling for more than $1 million Hong Kong dollars were among the items snapped up by mainland Chinese, Luk said.
Across the border
Hong Kong, a southern Chinese city with a population of about seven million, is the biggest market for Swiss watchmakers as retailers sell the timepieces to visitors from across the border.
About 20 per cent of last year's 16.2 billion Swiss francs' worth of watch exports from Switzerland were to Hong Kong, or about double the share of the US, according to data from the Federation of the Swiss Watch Industry. Sales in mainland China — which doesn't include Hong Kong, Macau or Taiwan — accounted for another seven per cent.
"Chinese consumers love watches and jewellery for their intrinsic value, and accessories are great vehicles to display wealth and success," CLSA analysts Fischer and Mariana Kou said in a research report last month.
"Some 24 per cent of people we surveyed that earn around 41,976 yuan ($6,400) per year said they would be willing to spend more than 50,000 yuan on a watch."