Retailers seek to keep watch sales ticking amid slowdown
Hit by crackdowns on graft and extravagance on the mainland, firms look to new strategies to fight decline in luxury sales as fair opens
Concentrating on bigger outlets, looking to the mid-priced market and opening stores away from tourist areas are among the strategies being employed by watch retailers amid a slump in sales of high-end gifts.
Government figures show that sales of jewellery, timepieces and valuable gifts fell 17.5 per cent in the first seven months of this year, from the same period last year, as Beijing's crackdown on corruption and official extravagance took hold. And local firms among the 760 exhibitors at the Hong Kong Watch and Clock Fair, which opened yesterday, are making plans to respond.
Jimmy Tang Kui-ming, chairman and CEO of Prince Jewellery and Watch Company, said its sales were still growing, but that the retailer would enhance its brand identity by replacing some smaller outlets with larger stores.
"We have seen a stable increase of 6 to 8 per cent in sales this year. We are not expecting a surge of 70 or 80 per cent as in 2011," Tang said. "The industry needs to analyse the market rationally, and show patience."
His company showed its faith in top-end brands by sponsoring the fair's World Brand Piazza, which showcases 12 top brands including Audemars Piguet, Bulgari, Chopard and Piaget.
Outside the fair, it plans to close smaller shops including a 1,000 square metre outlet on Middle Road, Tsim Sha Tsui. But a store in the Ocean Terminal tourist stronghold will be expanded from 3,000 to 5,000 square metres. A new 3,000 square metre shop will open in Mong Kok.
The chain will also move from crowded tourist areas to the New Territories, with shops in Tuen Mun and Yuen Long.
"We have heard the government's call to divert tourists from overcrowded areas like Tsim Sha Tsui. Besides, the rent is much lower," he said.
Other retailers will look towards mid-market products.
Distributor-retailer Acestar Concept has launched a cheap watch under the Mini car brand.
"It costs about HK$2,000, but the components are Swiss-made," marketing administrator Rachel Wong Chi-sin said. "The tide on the mainland has changed. We will focus on mid- and low-end products this year."
Iris Chan, marketing manager of Memorigin, said the manufacturer would open a retail store in Tsim Sha Tsui next month.
"Watches that cost several millions of dollars could be affected by the luxury market slump, but there is an opportunity for mid-price brands like us," she said. The firm produces watches under its own brand, priced from HK$20,000 to HK$4 million.
The fair runs at the Convention and Exhibition Centre in Wan Chai until Sunday.