E-Commerce Sales Rising Faster Than In 2012
While major luxury brands continue to chase the Chinese big spender wherever he or she may be, Hong Kong-based jeweler Chow Tai Fook is recording strong sales driven by a distinctly less well-off demographic: young consumers. Currently with a massive footprint of over 1,000 outlets in mainland China and more than 1,700 in the Greater China region, Chow Tai Fook is arguably more well-placed to take advantage of demand for lower-priced “starter” jewelry than competitor Tiffany & Co., which operates around 30 locations in the region.
Young consumers are buying more jewelry, either as gifts for themselves or friends, attracted by Chow Tai Fook’s more colorful lower-value items, he said, drawing a contrast with business-gift giving or buying trinkets as an investment. Previously, gold accounted for about 55 percent of the retailer’s sales, Chan said.
“We are very excited because if we can sell more jewelry items, whether diamond, pearls or precious stones, it’s better for us,” the executive said March 5 at an event to promote Chinese fashion, art, dance and photography during Paris fashion week.
Amid lingering uncertainty about the shape of the Chinese luxury market in 2013, Chow Tai Fook occupies an interesting position, able to capitalize on both older, more traditional shoppers and younger consumers. Its wide range of price points, huge regional network, and strong digital performance leave it less susceptible to economic fluctuations than luxury jewelry brands with a limited presence in the country. As Jing Daily noted last year, Chow Tai Fook’s aesthetic is an easier sell to older and more traditional buyers than that of foreign brands like Tiffany, Harry Winston, Van Cleef & Arpels and others.
Yet unlike other, smaller (but still large) Hong Kong-based jewelers such as Chow Sang Sang and Luk Fook, Chow Tai Fook’s massive investment and expansion strategy in the Chinese Mainland (particularly in second- and third-tier cities) has left it less exposed to lower spending among Hong Kong-bound mainland Chinese tourist-shoppers.