Hong Kong Jewellery Industry Review in 2023

At the time of writing in early December, concrete data on Hong Kong’s jewellery market extends only to the third quarter, as reported by the Hong Kong Trade Development Council (HKTDC) and the city’s Census and Statistics Department (C&SD). The year of 2023 marks a global return to normalcy after three years of pandemic. From jewellery exports to retail sales and major trade shows, the Hong Kong jewellery industry recalibrated itself, positioning on the stage to confront a spectrum of possibilities and challenges. 

Export sentiment softens

HKTDC released its export index for the third quarter of 2023 (3Q23) on 27 September 2023. The export index fell to 40.5 in 3Q23, after a surge to a two-year high of 47.8 in the previous quarter, due mainly to weakening global demand and continued geopolitical tensions. Exporters in all the major sectors became more cautious in 3Q23, said HKTDC. The timepiece sector saw the most substantial drop, falling by 15.9 points to 32.9 and jewellery sector dropped by 11 points to 36.1 from the second quarter of the year. 

According to HKTDC, the jewellery sector’s export performance from January to October 2023 is similar to the same period in 2022. Between January and October 2023, the export of pearls, gemstones, and rough diamonds dropped by around 7 percent year-over-year, while a decent growth of close to 21 percent was recorded in fine jewellery export. Market wise, the jewellery sector’s exports have been better in the Western markets, with both the EU and US recording growth in both product categories, while exports to the ASEAN market saw a decline.

Simeon Woo, council economist of global research from HKTDC, commented that the jewellery sector’s decrease indicated a deterioration in exports sentiment compared to the previous quarter. However, he also added that the sentiment scores for exports in the first four quarters of 2023 have been better than the corresponding period of the previous year.

He said: “The cost of living pressure brought by high inflation in many economies continues to ease with the implementation of restrictive monetary policies. However, despite this gradual alleviation, market demand remains relatively weak, particularly in the high-value jewellery segment.

One contributing factor to the subdued demand for jewellery products is the cautious spending behaviour of consumers. While there has been a resurgence in tourism-driven demand, people are increasingly inclined to be more frugal and spend less on non-essential items. This trend reflects a trade-down tendency, wherein consumers opt for more affordable alternatives or scale back on luxury purchases, which may affect the city’s jewellery export value in the future.”

Based on C&SD’s external merchandise trade statistics released on 5 December 2023, the value of Hong Kong’s total exports of goods in October registered a slight increase of 1.4 percent over a year earlier to HK$379.9 billion (around $48.6), after a year-on-year decrease of 5.3 percent in September 2023. For the first 10 months of 2023 as a whole, the value of total exports of goods decreased by 11 percent over the same period in 2022.

However, this situation wasn’t in accordance with the product category of jewellery, goldsmiths’ and silversmiths’ wares, and other articles of precious or semi-precious materials. According to the report, for the first 10 months of 2023, the value of total exports from this product category rose 10.4 percent to HK$59.1 billion (around $7.6 billion) – an outstanding number compared to the export landscape of all goods from the city. In October alone, however, the value of exports from the same product category fell by 10.4 percent year-on-year to HK$6,353 million (around $813 million). 

A government spokesperson said: “While the value of merchandise exports turned to a modest year-on-year increase in October 2023, overall export performance largely remained weak. Exports to the Mainland and the United States rose, while those to the European Union continued to fall notably. Those in other major Asian markets recorded mixed performance. Looking ahead, the difficult external environment amid heightened geopolitical tensions and tight financial conditions will continue to weigh on Hong Kong’s export performance in the near term.”

Retail regains strength

C&SD released the latest figures on retail sales on 30 November 2023. The value of total retail sales in October 2023, provisionally estimated at HK$33.8 billion (around $4.3 billion), increased by 5.6 percent compared with the same month in 2022. For the first 10 months of 2023 taken together, it was provisionally estimated that the value of total retail sales increased by 17.2 percent to HK$336 billion (around $43 billion) compared with the same period in 2022. 

In terms of retail outlets, the value of sales of jewellery, watches and clocks, and valuable gifts increased by 27.4 percent year-on-year to HK$5,100 million (around $652.7 million) in October 2023. From January to October 2023, the total retail value for the sector jumped by 55 percent to HK$50 billion (around $6.4 billion).

A government spokesperson said that the value of total retail sales increased further in October of 2023 over a year earlier alongside the continued revival of inbound tourism. Looking ahead, the spokesperson added: “An expected further recovery of visitor arrivals should benefit the retail sector. Continued improvement in household income and various activities that bolster the economy including the ‘Night Vibes Hong Kong’ should also provide support. Yet, factors such as tight financial conditions and economic uncertainties would weigh on consumption sentiment.”

1. HKTDC’s export index and jewellery export index from 4Q2021 to 3Q2022
   
   

Trade show resurgence

With the lifting of COVID-19 restrictions since the early of 2023, the city saw a resurgence of jewellery trade shows. HKTDC’s March shows tested the water first and set a positive tone for the rest of the trade shows held in the city this year.

The 39th HKTDC Hong Kong International Jewellery Show and the 9th HKTDC Hong Kong International Diamond, Gem & Pearl Show gathered over 2,500 exhibitors. The five-day fairs attracted over 60,000 buyers from 130 countries and regions, with the significant increase in participation from mainland China and the Asia region. 

Sophia Chong, deputy executive director of HKTDC, said: “We are delighted to see the overwhelming support from industry buyers and exhibitors for the twin shows. The vibrant atmosphere, busy traffic and packed booths not only reflected the global jewellery market’s pent-up demand after three years and strong buying power but also reaffirmed Hong Kong’s position as the world’s premier trade fair capital in Asia which brings the world together to do business and to build relationships.”

Widely recognized as the largest jewellery trade fair globally, the September shows returned in full scale to its pre-pandemic format with two venues dedicated to specific product categories. According to show organiser Informa Markets, the 40th edition of Jewellery & Gem World Hong Kong (JGW) featured 3,422 exhibitors from 44 countries and regions. It attracted 53,879 buyers from 142 countries and regions, with approximately 70% of the visitors originating from outside Hong Kong. This level of buyer turnout was comparable to figures recorded in 2018.

Celine Lau, director of Jewellery Fairs at Informa Markets, said: “As the industry undergoes rebuilding, the challenges ahead remain significant, emphasising the increased importance of JGW like never before. It is crucial that we must seek inspiration, foster connections and forge partnerships. As the meeting point for the global jewellery community, JGW plays a vital role in helping us accomplish these objectives.”

1. Jewellery export change during January-October 2023 from HKTDC Export Index by country and region

1. Jewellery exports figures from HKTDC’s export index between January-October 2022 and January-October 2023