Fact of the Day: Locusts Go Global

Louis Vuitton's latest ad campaign

Luxury conglomerates LVMH, (Louis Vuitton, Givenchy, Dior, Celine, Marc Jacobs, DKNY and Fendi), Richemont (Cartier, Van Cleef & Arpels, Piaget, Chloe), and PPR (Gucci, Yves Saint Laurent, Stella McCartney, Bottega Veneta and Boucheron), can be rest assured business will be good in the next few years.

That's because the consumer and gaming research firm CLSA Asia-Pacific Markets projects the global luxury-goods market will grow 10 percent annually in the next three years thanks to emerging markets like China.

Last year the luxury market grew a record 14 percent to HK$2.5 trillion.

"Mainland Chinese contribute about 33 percent of the sales of some of the brands, which include Gucci and Prada," said Aaron Fischer, head of CLSA Asia-Pacific Markets.

And these emerging market consumers aren't buying at home -- they are going abroad. "That is really an important part," Fischer said.

More than half of the sales in key European cities, New York and Hong Kong were mainland Chinese visitors, he said.

World Luxury Association statistics show that during Chinese New Year, mainlanders spent $7.2 billion overseas, with Europe being the biggest beneficiary attracting 46 percent, while 35 percent was spent in Hong Kong, Macau and Taiwan.

Another interesting fact is that mainlanders are the biggest group of duty-free shoppers in the world, accounting for 19 percent of total sales, according to the CLSA report entitled Dipped in Gold.

While there are indications of China's economy slowing down, Fischer doesn't think it will dent the luxury purchases by wealthy Chinese consumers.

This means for the most part France's economy will continue to be propped up by mainlanders' penchant for mostly French luxury goods.

And every other shop assistant from Paris to New York, Hong Kong and Macau must learn to speak Putonghua to cater to the market.

Now that's soft power.

Heritage Site Renewal

The new home of the Asia Society on the former army site

When I went to watch the documentary From Mao to Mozart: Isaac Stern in China, it was shown at the Asia Society's new permanent building, behind the Conrad Hong Kong in Admiralty.

Previously the Asia Society would rent rooms in places like the Hong Kong Club or in hotel venues.

But now it has a place it can call its own.

The reception area is large and very contemporary looking

It is built on what was previously the Explosives Magazine Compound that was built by the British Army in the mid 19th century to prepare and store explosives. It was here that gunpowder was processed, packaged, stored and distributed to defense locations around Hong Kong.

In the beginning of the 20th century it was taken over by the navy, and then was used as storage up until the 1970s when it became a depot. After the 1980s the site was unused until the government gave the building and the site to the Asian Society.

It's taken 10 years to come together and HK$400 million as well as donations, and the end result is a modern-looking space that can be used for exhibitions, lectures and presentations.

Downstairs is a small gift shop and the AMMO Cafe.

The multipurpose function hall has a different view of the city

I like how the Asia Society now has its base, and its location is relatively convenient. Now if only they could do something about the outrageous prices they charge for events... Right now it makes the group more geared towards intellectual elites when it should be opening up itself to invite more people into the fold to enhance their knowledge and understanding of Asian culture, history, politics and economics.

Dazzled by Diamonds

An almost 64-carat diamond ring by Cartier

Hong Kong jewellery Chow Tai Fook isn't waiting for high-end customers -- it's literally bringing bringing them in.

Last week 75 mainland couples and families were invited on a three-day, two-night, all-expenses paid trip, featuring harbour cruises, visiting personal stylists and wine tastings while staying at the Grand Hyatt Hong Kong in Wan Chai.

These guests were chosen because they spent at least 1 million RMB ($158,508) last year with Chow Tai Fook and were invited to the jeweller's first auction in Hong Kong.

The high-end jewellery market is very competitive because that's where the money is. Last week Cartier gave a very lavish presentation at the InterContinental Hong Kong where guests wandered in a "garden" setting, looking at baubles with astronomical price tags.

"Our mainland VIPs -- especially in first- and second-tier cities -- like to buy diamonds, said Chow Tai Fook executive director Adrian Cheng Chi-kong. He said the margin for diamond pieces was about three times higher than for gold.

The auction was carried out in Putonghua, where 100 couples attended as well as 25 couples chosen from a list of 55,000 VIPs in Hong Kong.

The highlight of the auction was an 18K white gold diamond and blue sapphire necklace called "the galaxy" that was sold at HK$7.5 million to a buyer from Beijing who was introduced to the jeweller by private bankers in Hong Kong.

Cheng says partnering with private banks helped Chow Tai Fook identify VIP clients. Sounds like a good strategy.

An orchid brooch with a large ruby stone by Cartier

Interestingly he predicted growth was expected to pick up in the second half of the year after the leadership change in China -- in the fall -- as a lot of clients "are still waiting for political sentiment to clear". We are already starting to see China's economy slow down, unless he thinks it's going to be a soft landing...

Chow Tai Fook has over 700,000 clients on the mainland where it has a presence in 320 cities. Cheng said any city with a population over 300,000 is a target. Which means practically every county would be eligible.

Consultants Frost & Sullivan says in its research that China became the second-largest jewellery market in 2010, with retail sales at HK$302 billion, just behind the United States.

In Hong Kong and Macau, mainlanders make up the largest group of customers buying jewellery, with 49 percent settling the bill using China Union Pay (China's version of paying by debit) or in cash in the first half of this financial year.

While gold still accounts for about half of all sales diamonds are how to really win mainland customers, Cheng said.

Another interesting fact -- last year, imports of polished diamonds to China hit $1.29 billion, up 85 percent from 2009, according to the Diamond Administration of China.

Diamonds are China's best friend, so it seems.

However, a friend of mine who is in the jewellery business heard that a high-end jewellery store had two VIP clients, mainland women who put down deposits for very expensive pieces.

Separately they said they would pay the difference in about a week, but then the money never showed up.

When they contacted these clients, one said her husband had gone bankrupt and had no more money, while the other said her better half had gone to jail.

If we start hearing more of these stories then we'll know which way Hong Kong's economy will be going...

More Silly TV

It's a circus every Sunday night

Hong Kong's TVB channel has yet another entertaining game show on Sunday evenings called Battle of the Senses -- 五覺大戰.

It has a circus theme, though when you are talking about taste, touch, smell, sound and sight it's hard to understand why it's held under a big top.

The prelude has some starlets dressed in skimpy outfits who try to show off their moves in front of the camera, but really they seem more scared than trying to make love with the camera. So why be a wannabe star?

In any event there are two teams of three, two girls and one guy, all in showbiz. They are introduced one by one where they only have a few seconds to see, taste, touch, hear and smell random things they have to identify. Their prize? A giant tael of gold.

One would think a better idea would be for them to donate those to the charity of their choice, but alas we're in Hong Kong where people take what they can get.

The first game is watching a clip where the ringmaster, Chin Ka-lok (錢嘉樂), dressed in a race driver suit takes a pretty girl out for a spin -- literally.

He drives the car in crazy twists and turns while she in the back has to do various tasks. It's all set up as an entertaining gag watching the girls shriek and scream as they try to pour water into a glass, eat cake, do arithmetic or take pictures of themselves.

When it's all over the ringmaster of course is fine, while the girl in the back is either sick to her stomach, or covered in cake and water. How... delightful.

Check out the host and his sidekicks' outfits (centre)

After the clip is shown the contestants have to run to the microphone to answer the question correctly. Previously the female guests wore high heels, but because it's a dangerous sprint, they've now opted to wear sensible flats.

The next game is another set up to elicit laughs from the audience. One of the female contestants enters a pitch dark area where she has to touch three things and identify them. Special cameras allow the audience to see what's going on and most of the time the young women are screaming  "Oh my God!" or "I'm scared!" when they haven't even touched the object yet. How enlightening.

In today's show, some of the items were fresh fish heads, and a kind worm, many of them wriggling around in a bowl. Previously they've had the girls touch a guy with washboard abs for a more titillating effect.

Another game involves sliding food or objects down a table and see how far it goes without falling off, or seeing how many pearls in a milk tea pearl drink you can stuff in your mouth.

Yes it's all very intellectually challenging but for some reason I get sucked into watching it every time I'm near a TV.

Perhaps it's a reflection of how we're too stressed out and don't mind stupid gags to entertain us?