Current status of the market – October 2024

In light of the current market challenges, it is essential to conduct regular check-ins to stay informed about ongoing developments. Today, we share insights from Lukfook and LVMH .

The Hong Kong-based jewellery retailer Lukfook reports that in Q2, retail sales value fell by 16% year-on-year due to high gold pricing and lower consumer demand. They also see that consumers are drawn more to gold and platinum (79%) than to fixed price jewellery (21%). This means that people are not as interested in buying diamonds and fixed-price jewellery anymore. 

In China, they also noted a substantial decrease in in-store sales, but more noteworthy is the reduction of online buying, with a 25% decline. Consumers seem less interested in buying their luxury goods via a website than in a physical store. Hong Kong and Macau see more significant falls, by 31%. This leads us to believe that the region’s spending habits are changing rapidly.

Lukfook remains optimistic about mid- to long-term growth due to favorable policies in mainland China to boost consumer spending. Additionally, the Group’s expansion plans overseas signal confidence in growth potential outside the Chinese market.

The Watches & Jewelry division of LVMH reports a small drop of 3% in sales growth for the first nine months of 2024, which suggests tough market conditions. The complete LVMH conglomerate also reported a 2% decline in revenue, showing a difficult market for all types of luxury brands. This can be explained by the current global economic uncertainty, but also by changing consumer habits.

Despite current challenges, the company expresses confidence in maintaining a strategy focused on enhancing desirability, which is crucial for sustaining sales in the diamond and jewellery market.

Photo credits: Envato Elements