Monkey See, Monkey DoFebruary 04, 16
The Chinese New Year – the Year of the Monkey – is about to begin. The Gregorian calendar year has gotten off to a somewhat inauspicious start – certainly as far as commodities are concerned (although diamonds seem to have bucked that trend somewhat), so what is in store over the next 12 months?
People born in the Year of the Monkey are characterized as quick-witted, curious, innovative and mischievous – all important traits (yes, including the mischievous) in running successful businesses. However, and this information might not be welcome news, it is also considered one of the unluckiest years in the Chinese calendar – if only we could go back to the Year of the Dragon, considered the luckiest of all the Chinese signs.
The Chinese New Year comes at a bit of a crossroads as far as retail is concerned, both in mainland China and on the island city of Hong Kong. Recent stock market turbulence and a devalued yuan, which has hit retail sales in Hong Kong, causing a second consecutive annual decline, have contributed to a degree of uncertainty.
Hong Kong has seen its dollar strengthening against the yuan, making it more expensive for mainlanders to shop there, with sales of jewelry and watches slumping 16 percent over the year. The Lunar New Year celebrations herald peak tourism season – with as many as 5 million visitors during the month = with day trips from the mainland accounting for more than half of those.
However, despite what might seem like slightly gloomy economic news, a growing middle class and increased disposable income has led to projections of Chinese consumption topping $2.3 trillion by 2020. A recent Forbes article estimated that according to the Hong Kong Trade and Development Centre (HKTDC), China’s share of diamond consumption is expected to increase 20 percent to 25 percent over the next 10 years.
The HKTDC also said that more than 50 percent of jewelry sales are driven by weddings, with the bridal market being a unique segment in the jewelry retail industry. A surprising statistic also emerged from a recent De Beers survey; that 67 percent of men in China between the ages 30-44 said that they wanted to own diamonds. There is an opportunity here if brands can not only tap into the existing market, but push the idea of his and hers wedding bands. Interest and receptivity is already high, and perhaps it only needs a gentle nudge to really expand the bridal market further.
In general, as Chinese consumers are increasingly exposed to luxury goods they have become more discerning about brands and the message they project – with exclusivity being a big selling point. According to a LuxuryDaily report, Hermès is considered the most exclusive brand, measured by a range of factors including the consistent quality of goods, brand prestige, valuation of the brand’s customers and its ability to justify a high price point. Although Hermès was considered the most exclusive brand, Chanel was thought to be the most desirable – a result that may have been influenced by Chanel’s brand exhibitions within China.
So, with positive predictions about Chinese consumption and growing brand awareness and appreciation for luxury goods, perhaps the Year of the Monkey will turn out alright in the end. Its lucky colors can all be found in diamonds and jewelry – blue, gold and white. Famous monkeys include Julius Caesar, Charles Dickens and Elizabeth Taylor and if their successes can be mirrored, the Year of the Monkey won’t be half bad at all.
Happy Chinese New Year.