China’s New Normal Likely to Mean Lean New Year Season Sales

Finance and Trade
15/01/2016 09:27

With the Chinese New Year season approaching, the outlook for sales is not very hopeful, writes Avi Krawitz, citing volatility on the Shanghai stock exchange, the government's devaluation of the yuan, economic growth slowing, major retailers such as Chow Tai Fook and Luk Fook publishing sharply lower Q3 sales and profits in recent weeks and falling manufacturing output showing that global demand for Chinese products is declining. Chinese jewelers overbought in 2014 and are still holding enough inventory for the Chinese New Year which begins on February 8. Furthermore, orders for the season were made by mid-December as the jewelers would need most of the diamonds by then to have the jewelry ready for sale next month. And, in any case, orders are highly specific and aimed at only filling demand rather than building up inventory.