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Andrea Pawlyna

Despite its small size, Hong Kong is a giant among jewellery markets. 'We have products from all over the world, all of the top international brands, the widest price range, the latest styles and the best jewellery in the world,' said Winston Chow,  chairman of the Diamond Federation of Hong Kong  and deputy general manager of Chow Sang Sang Jewellery.  
Hong Kong's status as a duty-free port makes shopping for jewellery a bargain compared with countries that have high import tariffs and sales taxes on luxury items. 
By buying in Hong Kong instead of other places in Asia, Chow estimates people could realise savings of 10 to 20 per cent on jewellery purchases. 
Hong Kong's potential jewellery-buying population of seven million people is considerably inflated by the 30 million visitors who come to the city annually, 60 per cent of whom are from the mainland. 
'By comparison, Taiwan has a population of 30 million but far fewer tourists. If you put Hong Kong's population and its number of visitors together, the total is greater than the population of Taiwan - and they're all concentrated in a small place,' Chow said.
Not only are people in Hong Kong exposed on a retail level to many brands and types of jewellery, but the territory is one of the world's leading jewellery manufacturers and exporters. 
The combination has helped make consumers in Hong Kong among the world's most sophisticated buyers of jewellery. 
'People here love jewellery and they know about the latest trends,' said Vicki Chan,  general manager of Continental Diamond,  a jewellery manufacturer and retailer.
Unlike Western countries, where design and the ornamental value of jewellery tend to be a priority, buyers in Hong Kong place more emphasis on the intrinsic value of the gemstones and precious metal content.
'Diamonds are preferred and the bigger, the better. People see jewellery as a good investment, something that has a store of value,' Chan added. 'Buyers here want higher diamond colours, good clarity and good cutting. In the United States, they go for more commercial diamond qualities.'
On average, diamond values have appreciated 3 to 5 per cent per year over the past five years. 
Gold has more than tripled in value over the past few years. White gold is preferred for settings because it shows off the diamond the best, followed by black gold and either yellow or rose gold, Chan said. 
Long necklaces set with many small diamonds or diamonds and pearls, are one of the latest trends at Continental Diamond.
'Ladies can wear a single strand or wear several strands together. Some chains can be as long as 40 inches,' she said. 
Self-purchases of jewellery by working women are a major factor in the local market, with the average amount spent for a piece of diamond jewellery at about HK$10,000. 
The sky's the limit for high-end jewellery, however. At Chanel, a first-time jewellery customer might spend US$30,000 to US$100,000. 'A local VIP buyer might spend US$100,000 and above,' said a Chanel spokesman. 
'Buyers want big iconic pieces with comets or camellias, which are part of Chanel's signature look, to wear to a function, a party or a ball.'
Chanel's classic, feminine styles with diamond sizes from one to three carats sell best, but jewellery with green beryl and pink sapphires has also been in demand. 
High-end international brands remain largely a niche market in Hong Kong. 
'Top international brands are considered the top of the pyramid. Hong Kong brands are still the primary choice among the mass market in Hong Kong,' Chow said. 
Since the financial meltdown, he has noted that jewellery buyers in Hong Kong have gone back to the basics, favouring simple, classic European styles such as diamond solitaires over newer designs while shying away from high-premium items.
Sales of diamond jewellery have also made inroads into the 24-carat (pure gold) market, which is popular in Asia. 
'Pure gold used to be an entry-level jewellery purchase but gold prices have gone up so much that diamond items are very comparable now in terms of price points,' Chow explained. 
Visitors from the mainland have been major buyers of Hong Kong jewellery brands. Chow sees local brands successfully establishing themselves on the mainland.
'Thirty-five per cent of Chow Sang Sang's sales as a group are in mainland China. Of the remaining 65 per cent in Hong Kong, about 35 per cent comes from tourists from the mainland. So if you take the two together, the mainland represents more than 55 per cent of our sales already,' he said. 
He said Hong Kong jewellery companies preferred to expand on the mainland rather than in Europe, the US or Japan because 'customers in China, the language and the way of doing business are very similar to Hong Kong'. 
The vastness of the mainland market is another factor. Hong Kong jewellery appeals to mainland consumers because of its perceived quality and international flavour.
Chow added that China's economic and political clout would affect international jewellery designs in the future. 'As China gains more recognition in the world, symbolic Chinese cultural elements will become more important in jewellery,' he said.



City a glittering attraction for buyers