With desktop imaging devices becoming ubiquitous, effectively managing the images in large collections has become a challenge. The requirements for a modern imaging system now demand not only efficient storage (low bit rate coding), but also easy manipulation, indexing and retrieval of images. In this paper, we introduce a new method for colour image coding based on a visual appearance model of local colour image patterns. The visual appearance of small image patterns is characterised by their spatial pattern, colour direction and local energy strength. To encode the local visual appearance, an approach based on vector quantisation (VQ) is introduced. A separate VQ is designed for the spatial pattern and colour direction respectively. It is shown that the method not only achieves good image coding results in terms of rate distortion criterion, it also enables content-based retrieval to be performed in the compressed domain easily and conveniently.