While cars and cosmetics may be big gainers in the world of Chinese luxury consumption this year, jewelry can’t be beat. Through the first eight months of 2011, mainland jewelry sales have expanded by nearly 50 percent in terms of value.
Chow Tai Fook Jewelry Co. (CTF) based in Hong Kong has 1,300 stores, with 1,200 of them located on the mainland. The company earned 30 billion yuan in 2010. More stores –and, with luck, greater profits – are planned for the future. One thousand more stores are set to open between 2010 and 2016. The locations will steer clear of traditional luxury strongholds like Beijing and Shanghai in favor of more far-flung locations.
“People’s love for jewelry knows no geographical boundaries,” said Chan Sai-cheong, director of CTF. He adds that unfavorable economic conditions in China caused by inflation will be “temporary” and Chinese industry as a whole will continue to power ahead.
“Mainland consumers have strong confidence in Hong Kong brands,” Chan said.
Compared to fine jewelry brands from abroad, those from Hong Kong enjoyed a much wider reach in times past and are quickly building up their share in the domestic jewelry retail market. Mainland tourists already account for 70 percent of CTF’s business in Hong Kong.
Mainland spenders were also influential in the success of jewelry retailers like Luk Fook and Chow Sang Sang. This year to March saw Luk Fook’s revenue from the mainland jump 64 percent, trumping last year’s impressive 55 percent total. Likewise TSL Jewelry keeps 85 percent of its outlets on the mainland and generates almost half of its total revenue there.
As the biggest jewelry retailer in China, “CTF has no intention of going global”, said Chan. But the company is intent on taking the lead in the Asian market. “We do business only where there are Chinese,” he added.
photo credit: chow sang sang