Why Chinese consumers are abandoning Pandora

    Five years after China accounted for more than 9% of the brand’s global revenue, Pandora’s sales in the crucial market have plummeted. What’s behind this decline?
    China accounts for only around 2% of Pandora’s global revenue, down from around 9% in 2019. Image: Getty Images
      Published   in Retail

    Five years after China accounted for nearly 9% of Pandora’s global revenue, the Danish jeweler is rapidly losing its allure among Chinese consumers.

    According to company reports, Pandora’s sales in China have sharply declined in recent years, falling from DKK 1.97 billion (approximately $284 million) in 2019 to DKK 564 million (roughly $82 million) in 2023. Between 2022 and 2023, Pandora’s China revenue fell more than 23%, with the country now accounting for just 2% of the jeweler’s global revenue.

    Globally, Pandora saw robust growth across most key markets in 2023. The US remained its largest market, accounting for DKK 8.3 billion ($1.2 billion) — 30% of company revenue — and recording full-year like-for-like growth of 2%. Meanwhile, in Europe, Pandora’s key markets saw a like-for-like growth of 3% in 2023. Germany led with 16.8% growth, while France reported a 1% increase. Strong growth was also seen in Mexico (39.3%) and Spain (10.95%).

    Image: Pandora
    Image: Pandora

    In China, Pandora’s subpar performance is increasingly disconnected with runaway growth in the jewelry sector. Last year, the Chinese jewelry market grew 14% to reach a historic high of 820 billion RMB ($113.6 billion), according to the China Jewelry and Jade Industry Association. Meanwhile, Pandora’s share of the total market has declined to around 0.07% from 0.4% in 2018.

    This contrast highlights an ongoing transformation within the Chinese jewelry market and underlines that Pandora’s challenges in China began long before Covid became a global crisis.

    Pandora’s magic dissipates#

    Pandora entered China around 2010 through cooperative distribution before switching to self-managed stores in 2015, rapidly gaining popularity with its DIY product model of bracelets and beads. At its peak, Pandora’s model of affordable personalization set it apart in a market dominated by higher-priced domestic and international luxury brands that were out of the reach of younger and less affluent consumers.

    The process of building personalized bracelets resonated with increasingly individualistic consumers. In 2016, Pandora’s revenue in China grew by 175% and the brand opened 44 new stores in the country, bringing the total to 97. By 2019, Pandora boasted 240 stores throughout China, and its Greater China-exclusive Peach Blossom collection saw runaway success, accounting for more than 2% of revenue in the region.

    Yet, this wasn’t enough to offset an 11% drop in like-for-like sales growth, which Pandora blamed on a “significant decline in traffic into physical stores.”

    Ultimately, Pandora’s rapid expansion from 2015 to 2019 turned out to be the peak rather than the beginning of sustained growth, with the brand particularly hard-hit during the pandemic. Owing to nationwide restrictions, around a quarter of Pandora’s China stores were shuttered, while others saw greatly reduced foot traffic.

    Today, the brand has 247 China stores, covering 78 cities, making physical store growth relatively flat over the past five years.

    Source: Pandora annual report, 2023
    Source: Pandora annual report, 2023

    Market misalignment#

    Post-pandemic, China’s jewelry landscape has shifted towards more rational consumption, putting affordable luxury brands like Pandora in a difficult position. Today, Chinese consumers prioritize practicality over self-expression alone, driving a shift from gold-plated or sterling silver jewelry towards gold as consumers demand aesthetic value along with resale potential. As the majority of Pandora’s jewelry is sterling silver or gold-plated, it fails to tick either box.

    When Pandora entered the Chinese market nearly a decade ago, its “one bead, one story“ concept resonated with a growing desire for self-expression. In response, the brand increased its new product releases from twice a year to seven times a year, with Chinese-language press calling Pandora “the Zara of the jewelry industry.”

    But the rate of new product releases ultimately worked against Pandora in China, with consumers overwhelmed by choice and left unswayed by minor changes like different materials or colors.

    Meanwhile, local brands like Chow Tai Fook and Lao Feng Xiang — which specialize in 24K or high-carat gold — offer pieces priced similarly to Pandora beads, which have proven popular with Gen Z and millennial consumers.

    The rising popularity of local brands among younger consumers is in line with shifting cultural preferences. According to Chow Tai Fook’s 2023 Jewelry Consumer Trends Report, 91% of Chinese respondents prefer jewelry with cultural significance, associating it with good fortune and fine craftsmanship.

    Pandora’s focus on whimsical, fairy-tale themes and collaborations with brands like Disney and Marvel, while proving popular with certain younger consumers, can alienate mature individuals seeking more meaningful pieces.

    Source: Pandora annual reports, 2019-2023
    Source: Pandora annual reports, 2019-2023

    Can Pandora turn it around?#

    Pandora’s post-pandemic difficulties are far from insurmountable. Despite its challenges in retaining urban luxury consumers, the brand maintains a loyal fanbase throughout mainland China, particularly in lower-tier cities where the disposable income of younger consumers remains relatively modest.

    The brand also has an opportunity to continue attracting Gen Zers via limited-edition collaborations, a strategy that has proven successful for brands across the pricing spectrum — including luxury brands. Successful examples abound in the post-pandemic era, from Fendi’s collaboration with Heytea and Bulgari’s link-up with video game Honor of Kings to Loewe’s popular Studio Ghibli collections.

    Considering Pandora’s accessible price points, launching more special edition collections in collaboration with popular Chinese or global IPs could offer a Gen Z-powered lifeline.

    Ultimately, three specific Chinese demographics — younger Gen Z consumers, those based in inland lower-tier cities, and devotees of Tmall and other e-commerce platforms — will hold the key to a turnaround for Pandora.

    But if the brand aims to re-engage the millennial consumers who powered its initial growth in China, Pandora should consider taking a cue from competitors like Swarovski, which delighted consumers with its 2023 Masters of Light: From Vienna to Shanghai exhibit in Shanghai, or Chow Tai Fook, which offers small, affordable gold pieces that attract more pragmatic jewelry lovers.

    • Pandora’s sales in China plummeted from $284 million in 2019 to $82 million in 2023, comprising only 2% of the company’s revenue last year.
    • China’s jewelry market hit a historic high of $113.6 billion in 2023, growing by 14% YoY.
    • Chinese consumers are increasingly favoring gold jewelry for its aesthetic and resale value, challenging Pandora’s focus on sterling silver and gold-plated pieces.
    • Pandora can rejuvenate its brand by launching limited-edition collaborations with popular Chinese or global IPs, appealing to Gen Z consumers.
    • Focusing on younger consumers in lower-tier cities and leveraging e-commerce platforms could be crucial for Pandora’s recovery in China.
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