Pandora, the world's largest jewelry maker by volume, has an ambitious goal to triple its revenue in China. But the market is highly competitive, and the company's proposed strategic plan does not have any specific attractions. On February 9, the Danish jewelry brand’s annual report for 2021 corresponded to the previous forecast, illustrating that its performance in China's market was significantly impacted by COVID-19.
It points out that a large number of stores were forcibly closed, stating that “the share of Pandora stores temporarily closed due to COVID-19 was 30 percent in Q1, 15 percent in Q2, 5 percent in Q3, and 3 percent in Q4.” COVID-related restrictions imposed by Beijing also directly impacted store traffic, as footfall decreased by up to 70 percent compared to 2019. With China's stringent pandemic policies still in place, Jing Daily asks: Can this company, known for its unique collection of charms and bracelets, realize its ambitions in China?
Market positioning#
Pandora entered China around 2010 through cooperative distribution, but in 2015, it switched to self-managed stores. Currently, it owns 214 stores in China and hires approximately 1,200 local employees. It has a loyal fan base, with 139,000 followers on Weibo and 54.5k on Xiaohongshu.
The company's global business strategy, Phoenix, includes four pillars built on the brand promise, the significant potential to grow, and the ability to attract new consumers. Last year, its US and China markets were positioned as its two core markets, with the long-term ambition to double its revenue in the US and triple it in China, using 2019 as a baseline.
The two markets are naturally very different, and responses from the respective markets were quite varied. Throughout 2021, compared with robust performance in the US market, China only took in five-percent growth. Despite significant growth shrinkage in China, management has optimistic expectations for the market.
Johan Melchior, the director of external communication, stated: “Pandora saw a few positive signs in Q4, such as being ranked the largest brand in fashion jewelry on Tmall for the first time since entering China. This provides comfort for the journey ahead.” So, while the future sounds promising, Beijing's strict controls seem to have set an unknown starting date for strategy implementation.
Industry experts outlined how other companies are not resting on their laurels. Sky Canaves, a senior analyst at Insider Intelligence, stated: “While Pandora is delaying its plans to invest in repositioning the brand in China, other brands doing well, such as Tiffany & Co. and Swarovski, will continue to double down, especially on digital.”
Strategies for growth#
Still, Pandora is on a mission, and at the heart of it lies personalization — a key strength as it builds up direct relationships with consumers. In late 2021, the company launched a new store concept called “Evoke” to support more traffic and conversions. Guangzhou’s Grandview Mall was among the first batch to test the pilot.
At the heart of Pandora’s mission lies personalization — one of its key strengths in building direct relationships with China’s consumers.
“The company focuses on offering a personalized shopping experience while showcasing jewelry in new and inspiring ways. Evoke will make shopping more intuitive and improve the speed of service, enabling customers to explore, find, and try on products easily,” added Melchior. And while this intention is forward-thinking, the question remains: Will it help Pandora stand out from strong competitors and draw in customers, especially Gen-Z customers?
“Every brand in China is looking to Gen Z as a key driver," Canaves explained. "That raises the question of how Pandora can differentiate itself. Consumers may prefer to save up and splurge on brands that have stronger heritage and name recognition rather than choosing what is perceived as a mainstream product.” Pandora must consider how its Guangzhou concept store can be tailored to meet Chinese consumer needs to draw better conversions.
Yet, this commitment to China is actually a two-phase plan: The first part will solidify the brand by establishing the core proposition of collectability, affordability, and self-expression, while the second phase will focus on the key element of people. Though the second phase is still largely in the ideation stage, the brand should have learned a lesson from the international brand missteps in China last year as well as the misguided partnership with its scandal-ridden ambassador, actor Zhang Zhehan.
In any case, Chinese customers expect to see more practical results through concrete initiatives, such as signing the popular young actress Song Zuer as an ambassador and teaming up with Fun Factory for its Chinese New Year campaign.
As expected, Pandora's 2021’s performance in China was unremarkable, but the sector remains a high priority. Thanks to the government’s consistent zero-tolerance policy, restrictions have posed a serious challenge to the brand's aspirations. And while the announcement of a new partnership with Marvel has piqued interest globally, no one knows how the Chinese market and its consumers will react to the collection.
“In theory, Pandora's core offering of charm bracelets should appeal to Chinese Gen Z since these products are highly customizable and reflect the wearer's style," Canaves added. "In practice, that message doesn't seem to be resonating very strongly as sales continue to decline amid increasing competition.”
So although many say Pandora deserves a place in the market, the ultimate judge will be China's local customers.