Nearly one year ago, year-over-year growth in jewelry sales was as high as 19%, said Sarah Quinlan, senior vice president for MasterCard Advisors, a division of the U.S.-based credit-card company. But according to a MasterCard report analyzing Hong Kong spending, that growth rate dipped below 6.4%, the average overall retail growth rate in the city last month.
For years, Hong Kong has seen waves of mainland Chinese tourists rushing across the border to buy gilt and gold watches, jewelry and more—a phenomenon that’s helped one local jewelry chain sprout some 80 stores in the city of 7 million, a number that outstrips even the city’s inventory of KFC branches. At this point, fully 23 cents out of every dollar in retail sales in Hong Kong is spent on jewelry, MasterCard says. (By contrast, that figure in the U.S. is less than 1 cent.)
Among growth in retail sectors from groceries to clothing, that of jewelry sales ranked dead last in December, Ms. Quinlan said. Growth “basically fell off a cliff” starting in July and has continued to taper since, she said, following a crackdown on corruption on the mainland.
“Since [jewelry] represents such a significant percentage of total retail sales here, that’s quite concerning for the overall Hong Kong economy,” she said. MasterCard’s report was based on data that included transactions made via the company’s payments network in Hong Kong, as well as estimates of other payment forms including cash and check.