An upbeat company statement released in early June provided conclusive proof that, after two difficult years, the Asian diamond and jewelry markets are turning a corner. Hong Kong-headquartered Chow Tai Fook Jewellery Group reported that it had seen a 4.4 percent growth in revenues for the six-month period ending March 31, following a year-on-year decline of 23.5 percent during the six-month period that preceded it.
According to Chow Tai Fook, the driving force behind the recovery was its business in China, which contributed more than 60 percent of all revenues during the fiscal year. Particularly impressive was a 41.4 percent increase in online sales, which by itself boosted the firm’s sales volume in China by 9.3 percent.
The statement by Asia’s largest jewelry retailer, which has more than 2,300 points of sale in over 500 cities in China, Hong Kong, Macau, Singapore, Malaysia, South Korea and Japan, was indicative of a general improvement in the region’s luxury markets, which had seen a marked slowdown growth since the second half of 2015. But the Chinese economy grew by 6.9 percent year-on-year during the first quarter of 2017, its strongest expansion in about 18 months.
A similar picture was provided by the American jewelry retailer Tiffany & Co., which reported that its worldwide sales increased by 1 percent to $900 million during the first quarter of the year, predominantly due to growth in the Asia-Pacific region.
According to Tiffany, total sales in the Asia-Pacific region equaled $257 million during the first three months of the year, 8 percent more than during the first quarter of 2016. The company reported particularly strong growth in mainland China.
In another recently released report, the consultancy group Bain & Company confirmed that the luxury markets in mainland China are rebounding, with local consumers showing a strong preference for purchasing goods at home, as opposed to buying them abroad, which has been the case for the past several years. This, said the Bain report, is expected to drive growth of 6 percent to 8 percent at constant exchange rates.
Elsewhere in the Far East, the picture is mixed. Japan remains a safe market for luxury brands, although growth will be flat in 2017, Bain stated. The luxury markets in Hong Kong and Macau, which have been a through particularly rough two years, appear to be set for recovery, as does Singapore. The weaker spots are Taiwan and South Korea, Bain reported.
Led by China, most global economic growth over the past 15 years can be attributed to Asia, and this is unlikely to change in the immediate future. According to a study by Euromonitor International, Asia Pacific is expected to be the region with the world’s best income growth prospects, with total annual disposable income likely to increase 94 percent between 2015 and 2030.
By 2025, Bain & Co. predicted in its most recent luxury report, Asia will account for some 53 percent of the global market for personal luxury goods including diamonds and jewelry. The two largest national markets will be China, with a 35 percent share, and Japan, with a 7 percent share.
MID House of Diamonds is committed to serving the diamond jewelry markets in Asia. It currently participates in seven trade shows annually, in Hong Kong, India, Taiwan and Japan, in addition to its operating full-time regional offices in Hong Kong, Shanghai and Tokyo.