By BETTINA WASSENER
HONG KONG - In December, Christie’s will auction off “the Vivid Pink,” a bubble-gum-colored five-carat diamond with an estimated value of $5 million to $7 million. But instead of scheduling the sale for New York or Geneva, the city chosen was Hong Kong.
Asia’s role in the market for super high-end luxury goods is mushrooming, reflecting an underlying shift in consumer spending power that has been creeping along for years, but which received a boost from the global economic crisis.
Christie’s and its rival Sotheby’s say that in the last few years Hong Kong has emerged as a top location for sales of expensive jewelry, gems and fine wines. Asians have also become major buyers of ultraluxury goods at their auctions in London, New York and Geneva.
Christie’s clear 101-carat Shizuka diamond, for instance, sold in Hong Kong for $6.2 million in May 2008. That sale, and the one coming December 1 of its big pink diamond, “are both great examples showing how important this market has become at the very top end,” said Vickie Sek, head of jewelry at Christie’s Asia.
In another telling example, Rolls- Royce, which did not even have dealerships in Asia until 2003, immediately received 20 orders for its new $250,000 Ghost when it presented the car in Hong Kong last month - despite taxes that double the price.
More broadly, household spending in developing Asian nations is expected to increase as continued growth, rising populations and improving government health and retirement safety nets reduce the need for families to save.
At the same time, many of the world’s economies are struggling to return to growth after the financial crisis. Russia and the Middle East are taking a hit from lower oil prices.
And consumers in the world’s traditional spending powerhouse, the United States, are weighed down by debt and expected to be much more cautious about opening their wallets for quite some time.
“The United States is in the early stages of a multiyear retrenchment,” Stephen Roach, chairman of Morgan Stanley’s Asia operations, said in a recent speech in Hong Kong.
The result is a gradual rebalancing in spending power toward emerging nations in Asia - and China, in particular.
China, the world’s most populous nation, has already become the biggest global car market, having overtaken the United States earlier this year. And Credit Suisse forecast last month that China’s share of global consumption would overtake that of the United States by 2020.
China’s population of “high net worth individuals,” those worth $1 million or more, surpassed that of Britain for the first time last year, according to an annual study published by Capgemini and Merrill Lynch in June.
North America, Japan and Germany together still accounted for 54 percent of the global total, but the authors of the report also predicted that the Asia- Pacific region would surpass North America by 2013.
Asia has already seen a large rise in the number of individuals who can spend a lot in the auction halls of Christie’s and Sotheby’s. In the world of top wines, for example, Asian buyers are center stage. Christie’s said that in the spring season, Asian buyers accounted for 61 percent of the total sales value at its New York, London and Hong Kong wine auctions. Four years earlier, the figure was 7 percent.
Its Hong Kong wine auctions, moreover, have the highest average lot price - roughly three times that in New York or London - because Christie’s puts only the rarest, most expensive vintage wines up for sale in the city, said David Elswood, Christie’s international head of wines.
The vast majority of Asian buyers, he said, fully intend to drink the wines they buy. “It’s all about prestige rather than investment,” Mr. Elswood said. “You cannot show off a wine without opening and drinking it.”
DANIEL SORABJI/AGENCE FRANCE-PRESSE — GETTY IMAGES / Asia has emerged as a top location for the sale of luxury items. Buyers at Sotheby’s wine auction in Hong Kong this month spent $7.9 million for rare vintages, well above the $6.4 million raised in the spring sale.
