During this year’s Hong Kong spring auction season, the jewelry auction market showed signs of recovery. Several major auction houses put up for sale a number of high-quality jewelry pieces and achieved impressive results. Notably, at Sotheby’s Hong Kong (Weibo) jewelry auction, the world’s largest pink diamond, the Pink Star, was sold for HK$553 million, setting a new record for the highest-ever price ever paid at a global gemstone auction. At Poly Hong Kong’s jewelry special auction, a set of natural Burmese jadeite bracelets and necklace fetched a final price of HK$106.79 million.

　　Industry insiders point out that, compared to last year, jewelry auctions have shown signs of recovery this year. As one of Hong Kong’s signature auction categories, jewelry auctions have seen auction houses meticulously curate and select items of superior quality and unique design, attracting more jewelry collectors to participate. Notably, despite declining sales in the retail market, many branded jewelry companies remain willing to spend lavishly at auctions to acquire their prized pieces.

　　Spring auction jewelry bidding is booming, with Asian collectors actively participating.

　　Jewelry auctions have long been a traditional strength and hallmark of Hong Kong. In recent years, during the city’s spring and autumn auctions, numerous high-quality jewelry pieces with clear provenance—both exquisite individual items and substantial lots—have emerged. Some of the leading auction houses have also meticulously curated innovative and creative themed auctions, drawing in many jewelry collectors and consumers from both home and abroad who come to hunt for treasures.

　　Previously, the Sotheby’s Hong Kong Spring Auction 2017—Featuring Magnificent Jewelry and Jadeite Jewelry—achieved a total sales volume of HK$908 million. Among the lots, a 59.60-carat pink diamond named “Pink Star” fetched HK$553 million, setting a new world record for the highest price ever paid at auction for a diamond jewel. The lot was acquired by the renowned jeweler Chow Tai Fook. Another lot—a 3.13-carat vivid blue diamond ring—sold for HK$37.2 million, breaking the world auction record for the highest price per carat ever achieved for a vivid blue diamond.

　　After the auctions, Kuo Chin-yao, Deputy Chairman of Sotheby’s Asia and Chairman of the Jewelry Department for Asia, stated that both jewelry auctions enjoyed strong popularity and enthusiastic bidding. All ten top-selling lots were acquired by Asian collectors, clearly demonstrating the market’s robust vitality.

　　The jewelry auction at Poly Hong Kong’s Spring Auction also delivered steady results. This season, the auction house presented a total of 175 exquisite pieces in its jewelry专场, with total sales exceeding HK$335 million. Among them, a set of natural Burmese jade bangles and a necklace of natural imperial-green jade beads from Myanmar achieved remarkable success, selling for a high price of HK$106.79 million.

　　The reporter learned that Christie's Hong Kong and Phillips' jewelry auctions upcoming will also feature many outstanding pieces.

　　According to Christie’s Hong Kong, the “Magnificent Jewels and Jadeite Jewelry” auction to be held during the spring sale on May 30 will spotlight representative works by four renowned Hong Kong jewelry designers—Cheng Chih-kang, Zhao Xin-qi, Chan Chi-on, and Wong Yau-lun—who are celebrated internationally for their exceptional jewelry designs. The total number of items up for auction will be just over ten.

　　Shi Lihua, Vice Chairman of Christie’s Asia and Director of the Jewelry and Jadeite Department, said: “These four exceptional jewelry designers are presenting their exquisite creations to a wide range of collectors. Their designs are diverse and one-of-a-kind, and they are sure to spark intense bidding competition among international collectors at auction.”

　　The “Precious Jewelry and Jadeite” auction, to be held by Sotheby’s Hong Kong, a renowned British auction house, this spring, will take place on May 29. According to the company, this spring auction features approximately 140 exceptional pieces of jewelry and jadeite spanning from the late 19th century to the present day, including heavyweight natural gemstones as well as masterpieces by several prestigious jewelry brands such as Cartier, Graff, Van Cleef & Arpels, and Boucheron.

Zhu Yanyi, Head of Jewelry at Phillips Asia, stated: “As jewelry collectors’ tastes and collecting preferences continue to evolve, the auction items carefully selected by our company must feature unique designs, exceptional craftsmanship, and a rich heritage that honors the glorious history of jewelry art. In this season’s auction, we’ve assembled a diverse collection of exquisite antique jewelry, distinctive pieces from various eras by renowned international brands, high-end custom-made jewelry, and a prestigious selection of classic oriental jadeite—each of which perfectly caters to today’s collectors who seek to stay abreast of contemporary trends while preserving their passion for timeless treasures.”

　　Is the jewelry auction market rebounding this year?

　　Judging from the performance of some jewelry auctions at this year’s Hong Kong Spring Auction, Hong Kong’s jewelry auctions appear to be recovering.

　　Wong Cheung, a veteran in Hong Kong’s art auction industry, pointed out that one shouldn’t assume the jewelry auction market is recovering just because Sotheby’s Hong Kong sold a pink diamond for over 500 million Hong Kong dollars at this year’s spring auction. In fact, jewelry has been the most challenging segment for auction houses in recent years. As an example, he noted that at Sotheby’s Hong Kong’s spring auction this year, the sell-through rate was only 75%. Out of a total of 200 lots, a conservative estimate suggests that more than 50 lots failed to sell.

　　According to media reports, Sotheby’s experienced several unsuccessful auctions of gemstones last year, including the largest rough diamond ever discovered worldwide in over a century, as well as a blue diamond ring that once belonged to Hollywood actress Shirley Temple.

　　However, he also admitted that, judging from the results of this year’s spring auctions held by Poly Hong Kong and Sotheby’s Hong Kong, a “mini-spring recovery” is indeed taking place. “Last autumn’s auction was the worst; Sotheby’s Hong Kong’s autumn auction last year totaled HK$193 million in sales, while this spring’s auction reached HK$908 million. At Poly Hong Kong, the jewelry special auction saw total sales of HK$209 million last autumn, compared to HK$335 million this spring,” said Wu Chang. In terms of total sales volume, jewelry sales at these two auction houses this year are better than last year, indicating a noticeable recovery.

　　Zhu Yanyi, Head of the Jewelry Department for Asia at Phillips Auctioneers, shares a similar view on the “recovery.” According to her, jewelry auctions over the past few years have generally been described as “quiet.” Compared to the period from 2011 to 2013, the total value of transactions has indeed shown a slight downward trend. “However, we’ve also observed signs of recovery in the market during the first half of this year. High-quality lots continue to attract intense competition from buyers—not just in jewelry, but even in other art forms and watches, where there’s a growing preference for exquisite, premium pieces.”

　　Jiang Zhaofeng, who is in charge of the jewelry auction sector at Christie’s Hong Kong, disagrees with the notion of a “recovery.” “Over the past two to three years, the jewelry auction market has remained relatively stable, without the dramatic fluctuations seen in previous years. At the same time, each year jewelry auctions have continued to set numerous new world records.” He specifically pointed out that the jewelry market has always been more stable than other sectors, owing to the fact that buyers tend to be seasoned connoisseurs, and because jewelry prices are transparent and competition is fierce—thus requiring auction houses to offer pieces with unique themes and appropriate pricing in order to attract collectors.

　　He cited as an example that during the “Kong Xiangxi Family Collection of Jewelry and Jadeite Jewelry” auction at Christie’s Hong Kong Spring Auction in 2015, the total sales amount reached HK$112.6 million, exceeding the pre-auction estimate by more than seven times.

　　Mr. Jiang emphasized that, compared to other art forms, jewelry collection investments have a longer return cycle and slower appreciation rates, requiring investors to be patient and hold their investments for the long term.

　　Analysis

　　Why are jewelers rushing to enter the auction scene and bid “sky-high” prices for jewelry?

　　It’s worth noting that, in recent years, numerous well-known jewelry brands—both domestic and international—have been actively present at auction houses, either making high-profile bids or partnering with auction houses to launch special collections of rare and exquisite jewelry.

　　On the one hand, domestic jewelry retailers are experiencing a continuous decline in overall performance and their profits are steadily shrinking. On the other hand, these same retailers are “splurging lavishly” at auctions, snapping up jewelry at exorbitant prices. So why is this happening?

　　Recently, several Hong Kong jewelry companies—including Chow Sang Sang, Chow Tai Fook, and King’s Jewelers—released their latest financial reports. Reporters found that many of these companies experienced varying degrees of decline in performance last year. Specifically, Chow Sang Sang’s 2016 revenue totaled HK$16.093 billion, a 16% decrease year-on-year; its net profit reached HK$742 million, down 34% from the previous year. As for Chow Tai Fook, as of December 31, 2016, the group’s third-quarter sales at stores in mainland China and the Hong Kong and Macao markets both declined. Even the Lunar New Year—a traditionally strong sales season—failed to deliver satisfactory results. According to its financial report, during this year’s Spring Festival period, Chow Tai Fook’s same-store sales of jewelry and gemstone accessories in mainland China plummeted by as much as 20%.

　　Meanwhile, leading jewelry brand Chow Tai Fook has been frequently bidding at jewelry auctions, actively participating in the bidding process. This month, the company won a 59.6-carat pink diamond for HK$553 million. Last June, Chow Tai Fook also secured a green diamond named “Aurora Green” at a Christie’s auction for 130 million yuan, setting a world record for the highest price ever paid for a green diamond at auction—and also establishing a new world record for the highest price per carat for a green diamond.

　　It is reported that in 2012, the renowned Chinese jewelry brand “Lao Feng Xiang” also bid successfully at a Hong Kong auction for a rare necklace featuring 23 large, natural jadeite beads. The necklace sold for HK$106 million, setting a new record for the highest-ever auction price for a single piece of jadeite jewelry.

　　“In fact, at Western jewelry auctions, most of the bidders are seasoned professionals in the jewelry industry—including jewelry brands, jewelry suppliers, and jewelry designers. They have a deep understanding of market trends and are adept at identifying the quality and materials of jewelry,” said a senior official from Christie’s Hong Kong Jewelry Department. “Brand-name jewelry is often purchased at auctions as well; some pieces are bought back for reworking and recutting before being resold, while others are acquired for collection or investment purposes. Top-tier jewelry is becoming increasingly scarce and rare.”

　　A reporter learned from a well-known Hong Kong jeweler that the company occasionally purchases fine jewelry at auctions. This is because the group operates a jewelry museum that primarily houses jewelry adorned with silk flowers and other similar motifs. Therefore, if they come across top-quality pieces on auction related to these themes, they will participate in the bidding.

　　The reporter learned that brands such as Cartier, Bulgari, and Van Cleef & Arpels are frequent participants in jewelry auctions. In 2015, at Sotheby’s Hong Kong Spring Jewelry Auction, the French brand Cartier repurchased a natural jadeite necklace bearing its own name for over 200 million Hong Kong dollars—a price that set a new world record for jadeite jewelry auctions at the time. Jewelry from brands like Van Cleef & Arpels and Boucheron is also being recycled, with these companies actively acquiring their own vintage masterpieces.

　　Some people believe that high-profile bidding on jewelry at auction by luxury brands is also a marketing strategy. According to Wu Chang, a veteran in Hong Kong’s art auction industry, when luxury brands bid on exceptionally rare diamonds and succeed in winning the auction, it can serve as a value-preserving investment. Moreover, the media will eagerly cover such events, effectively boosting brand promotion. “Jewelry auctioned by major auction houses generally comes with international certifications, clear documentation of origin, and detailed condition reports, ensuring their quality. However, a downside is that acquiring top-tier, precious jewelry often requires paying exorbitant prices, which can strain a company’s liquidity. Furthermore, if such an item needs to be sold in the future, whether it can fetch a good price remains uncertain.”

　　Wang Chong, Co-Partner of ESR Greater China, noted that in the retail jewelry market, brands like Chow Tai Fook have seen a decline in performance over the past two years—particularly in the Hong Kong market, where consumer sentiment remains subdued. Meanwhile, as mainland Chinese tourists increasingly travel to Japan and South Korea, sales of Hong Kong-based jewelry brands have been hit. She analyzed that actively participating in auction houses is indeed a viable marketing strategy for brands like Chow Tai Fook—for instance, last year the brand purchased a high-priced green diamond at Christie's. The purpose behind this move was to send a clear message to the market: Chow Tai Fook not only sells gold jewelry but has also diversified its offerings and entered the diamond market.

Author: Ou Zhi Kui, Intern: Lu Jingyang, Southern Daily