Chow Tai Fook’s strategy for the next gen

What happened Renowned gold and jewelry brand Chow Tai Fook has partnered with Beijing’s Palace Museum to introduce its “Chow Tai Fook Palace Museum” collection. The collaboration drew inspiration from the national treasures and cultural relics housed in the museum to create a series featuring three symbols of auspiciousness – drums, butterflies, and stone lions – reimagined through contemporary, stylish design to showcase the beauty of the palace’s gold items in a modern light. Chow Tai Fook is embracing a fresh identity this year as it marks its 95th anniversary. In April, the company introduced a new logo, adding “since 1929” to highlight its nearly century-long legacy. This rebranding effort aims to merge tradition with a dynamic, modern approach. Concurrently, the jeweler launched the “CTF Rouge” collection, symbolizing the brand’s enduring heritage. This collection drew design inspiration from the passionate hues of red and the auspicious symbol of “福” (meaning good fortune in Chinese), incorporating elements from red brick walls that represent “home.” The series embodies Chinese culture, innovation, and craftsmanship through timeless designs featuring natural diamonds, pearls, enamel, and gold. In a strategic move intended to enhance its appeal to contemporary consumers, Chow Tai Fook appointed Nicholas Lieou, a renowned Chinese jewelry designer and former Design Director at Tiffany & Co., as Creative Director for High Jewelry. Nicholas is responsible for creating new product lines, including the “CTF Rouge” collection, which shortly after its launch in April, achieved sales of 500 million RMB ($70 million) in mainland China. The Jing Take Chow Tai Fook’s fiscal year 2024 report, which ended on March 31, highlights the brand’s strong performance. The group’s revenue increased by 14.8% YoY to $13.94 billion (HK$108.7 billion, with core operating profit rising by 28.9% YoY to $1.55 billion (HK$12.1 billion). These results underscore the company’s transformative vision “to be the leading global jewelry brand that is a trusted lifetime partner for every generation,” with a focus on driving higher value growth. The brand’s recent success is closely tied to its deep understanding of the evolving gold jewelry market, particularly the growing trend of younger consumers purchasing gold. The 2023 Jewelry Industry Trends White Paper published by Tmall reveals that gold products now account for nearly 60% of China’s jewelry market consumption. Additionally, the 2022 China Gold Jewelry Industry Insights Report by Mob Research Institute notes that the proportion of young consumers buying gold has surged from 16% in 2016 to 59% in 2022. This trend is fueled by the dual appeal of gold’s value retention and cultural significance. Amid economic fluctuations, young consumers increasingly view gold jewelry as a way to fulfill their desires while making a sound investment. The rising cultural confidence and the popularity of neo-Chinese styles have also made gold – a material with deep roots in traditional aesthetics – highly desirable among younger buyers. This has led to innovations in the design and aesthetic value of gold jewelry, creating a positive cycle in the market. In response, Chow Tai Fook has deepened its connection with younger consumers by refreshing its brand image and launching the “CTF Rouge” collection. Recognizing the youthful shift in its customer base, the brand understands that the creative craftsmanship behind its designs and the emotional value of the retail experience are as crucial as the intrinsic value of gold itself. Looking ahead, Chow Tai Fook plans to further enhance its consumer experience by optimizing its retail channels to maximize store productivity. In preparation for its 100th anniversary, the brand will renovate all its stores over the next five years and open stores with new images, including one in Hong Kong’s Central District this year and another in Shanghai in 2025. Chow Tai Fook’s century-long legacy is a testament to its enduring qualities. Its commitment to heritage and its legacy has earned the trust of generations of consumers. Rooted in traditional local culture yet evolving with the times, Chow Tai Fook is closely engaging Chinese consumers and is now poised to embrace its centennial milestone and a new future with renewed vigor. The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

Chow Tai Fook’s strategy for the next gen

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Published August 28, 2024

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Chow Tai Fook’s strategy for the next gen