Although the largest luxury powers still hail from Europe, China has one name in the running for top spot. According to Deloitte’s Global Powers of Luxury Goods 2021, which ranks companies by consolidated luxury goods sales over the 12 months to December 2020, Chow Tai Fook was the only Chinese player to enter the Top 10 list, below the usual suspects like LVMH, Kering, Chanel, and Hermès. Although down two places from 2019, the Hong Kong-based jewelry conglomerate (which also houses Enzo, T Mark, and Hearts on Fire) managed to generate 7.19 billion in luxury goods sales amid pandemic disruptions and gold price volatility.
The Jing Take
Since Deloitte’s research was conducted, Chow Tai Fook has continued to perform well. In the six months ended September 2021, the group’s revenue jumped 79.1 percent to HKD 4.4 billion (about 564 million). Meanwhile, same store sales in Hong Kong and Macau jumped 80 percent in the period — boosted by improving local consumption and tourist spending — and 32.2 percent in the mainland. This growth has been further supported by China’s strong recovery of gold jewelry consumption, with purchases reaching 675 tonnes last year.
But how exactly did Chow Tai Fook grow into a jewelry giant? Part of this has to do with its focus on lower-tier cities, which have seen a rise in disposable income and e-commerce spending. In the first half of 2021, the company added 624 point-of-sales (POS), half of these in Tier-3 cities and below, for a total retail network of 5,214 POS. Additionally, Chow Tai Fook has pushed ahead with its smart retail strategy to enhance customer experiences. On CloudSales 365, a CRM platform that works with WeChat to provide better in-store and post-sales communications, the average selling price was 1.8 times higher than that of e-commerce platforms in public domains.
And more importantly for any luxury brand, Chow Tai Fook has established a reputation for quality and trust. With its heritage in gold, the 93-year-old company transformed the trade by launching 999.9 gold jewelry products in 1956, a guarantee of purity that was later adopted as the industry standard in Hong Kong. Though it has since branched out to diamonds and other jewelry, Chow Tai Fook’s enduring reputation enables it to continue charging at a premium price — and rub shoulders with the world’s biggest luxury brands.
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.