Hong Kong Reopening Drives Strong Sales at Chow Sang Sang

Chow Sang Sang’s revenue rose 22% in 2023 as the border between Hong Kong and China reopened and tourism returned.

Group sales for the year climbed to HKD 25.01 billion ($3.2 billion) after the government lifted restrictions on travel between the municipality and the mainland at the start of the year, and businesses fully resumed operations, the jeweler said last week. Hong Kong derives much of its income from Chinese tourists who travel to the municipality to purchase luxury goods. Rising demand for gold products, even amid higher prices for the metal, also drove sales.

Proceeds from jewelry retail jumped 23% to HKD 24.27 billion ($3.1 billion), while revenue from other businesses — including property — were down 8% to HKD 738.8 million ($94.4 million). Profit more than doubled to HKD 1.01 billion ($129.4 million), compared to HKD 452.3 million ($57.8 million) a year earlier.

Revenue from mainland China grew 16% to HKD 15.83 billion ($2.02 billion), while same-store sales increased 12%. Sales surged 34% to HKD 8.9 billion ($1.12 billion) in Hong Kong and Macau, with same-store sales up 35%.

“Following the end of epidemic-related restrictions in mainland China, Hong Kong and Macau, total jewelry and watch sales…in the first half of 2023 rebounded significantly by 31% year on year,” the company noted. “In the second half of the year, the pace slackened, especially in mainland China, to 15% year on year. The growth was fueled by the robust demand for gold by consumers which continued unabated despite the rising gold price.”

In China, sales of diamond jewelry, particularly those at higher price points, decreased considerably, but performed better in Hong Kong, the company said.

In the first quarter of 2024, sales continued to increase in Hong Kong and Macau, supported by both tourists from the mainland and domestic purchasing, Chow Sang Sang explained. However, in China, sales were strong over the New Year holiday, but declined for January and February combined, in comparison to the strong base set at the beginning of 2023. Diamond sales continued to be disappointing, the company noted.

“In Hong Kong and Macau, the opening up of more individual travel from the mainland is encouraging,” the retailer added. “But the other side of the coin is the worries that store rental is on the rise in unrealistic anticipation, and the influx of potential customers will exacerbate the problem of staffing shortage. In mainland China, the downtrend in gem-set jewelry sales seems to indicate that consumer sentiments have turned cautious, and that fewer people are spending on wedding jewelry.”

Main image: A Chow Sang Sang store in Hong Kong. (Shutterstock)