Jewelry sales in Hong Kong increase 22% with demand for safe assets

Asales of jewelry and watches in Hong Kong increased by 22% in the first nine months of the year, driven by the demand for gold and precious stones for wealthy Chinese people, given the strengthening of foreign investment supervision.

According to official data cited by Bloomberg, sales of jewelry, watches and luxury goods have reached US$45,800 million (€5,100 million), the highest value since 2019.

Growth has largely surpassed that of retail trade in general, with the sector accounting for around 15% of total sales of the territory.

Jewelry sales have maintained a two-digit growth in the last quarter, although expenses for luxury goods have retreated by more than 10% in mainland China.

Development reflects a change in the priorities of the richest Chinese consumers, who seek to preserve their assets in the face of increased tax surveillance of foreign held assets and restrictions on capital outflow imposed by Beijing.

Gold and precious stones gained attractiveness as a reserve of value, at a time when the prolonged crisis in the Chinese real estate sector continues to affect the family's assets and the stock market recovery lost momentum.

“ People are increasingly interested in seeking security because they are concerned about recent changes in fiscal policy,” said Manna Wang, an insurance agent in Hong Kong, quoted by Bloomberg.

“ They want to be absolutely sure that their heritage will not be changed in the future. High incomes are no longer the priority,” he added.

In recent months, Chinese authorities have restricted the stock exchange entries of continental companies in Hong Kong, strengthened control over foreign stock trading and intensified supervision of trust funds and international insurance products.

According to Wang, clients who previously sought insurance with high incomes came to ask him for advice to buy gold jewelry, with expenses of up to $15,000 (EUR 13,300) per person.

The valuation of Chinese currency, yuan, and Hong Kong tax regime, which does not apply sales taxes, also contributed to increasing demand.

Jewelry prices may be more than 5% lower than those in mainland China, according to the agent.

The rise in the international price of gold, which reached historical peaks this year, also contributed to the increase in sales value, explained Alexis Bonhomme, executive director of luxury consultant Trinity Asia.

However, demand remained high even after the recent decline in the prices of precious metal.

The demand led several international brands to expand their presence in Hong Kong, including Swiss watch manufacturer Audemars Piguet, Italian FOPE jeweler and Tiffany & Co. and Van Cleef & Arpels.

“ Luxury jewelry and gold offer security and durability,” said Bonhomme.

“ The richest customers are giving priority to articles with intrinsic and lasting value. They reduce seasonal fashion purchases in the domestic market, but when they travel, they are willing to invest significant amounts in jewelry and gold as tangible assets,” he added.