Why Hong Kong’s Chow Tai Fook shines as other jewelry brands struggle

What happened Chow Tai Fook Jewelry Group recently announced its financial results for the fiscal year 2024, posting an 11.2% increase in its core profit margin. This performance underscores Chow Tai Fook’s leading position in the Greater China jewelry industry, and highlights its continued profitability amid market challenges and cost control strategies. During the reporting period, Chow Tai Fook bucked a broader luxury market slowdown. It launched a series of new products that were well-received by the market, and heavily promoted existing lines, such as its Huá Collection. That series, which draws from Chinese traditional culture while integrating modern design, has proven popular as Chinese consumers seek out items that celebrate Chinese cultural aesthetics and retain value. Part of Chow Tai Fook’s success in FY 2024 came from efforts to build its wider portfolio. Earlier this year, the group launched a rebrand and market expansion effort for Hearts On Fire, the Boston-based diamond jewelry brand that Chow Tai Fook acquired for $150 million in 2016. This rebrand included a new visual identity, a retail concept store in Hong Kong designed by interior designer Joyce Wang, and the successful launch of their Barre Collection. The Jing Take Like the broader luxury market, high-end jewelry brands have faced a turbulent 2024, with young consumers putting a premium on value for money rather than brand name alone and older consumers gravitating towards gold. This has hit some imported luxury jewelry brands worse than others. For instance, Cartier owner Richemont recently announced a staggering 27% YoY sales decline in mainland China, Hong Kong and Macau in its first quarter that ended June 30, even as sales rose in the US, Japan, and Europe. Yet, data from the National Statistics Bureau of China showed that sales of gold, silver, and jewelry increased nearly 4% from January to April this year to 122 billion RMB ($16.7 billion), indicating that the domestic market is in the midst of a muted recovery. This hints at a hollowing-out of the hard luxury market in China, where high-carat gold and gems benefit from a perception as safe-haven investments and smaller, and more affordable pieces prove popular among younger consumers as they shift towards practicality. Much of Chow Tai Fook’s revenue came from a 12.4% uplift in retail sales in the fourth quarter, driven by strong demand ahead of and during the Lunar New Year holiday. That quarter, retail sales volume in mainland China jumped 18.3% YoY, even as same-store sales declined by 2.7%. This indicates that consumers are perhaps buying less than before, yet are spending more – likely due to the rising price and popularity of high-carat gold jewelry. This bifurcation is favoring Hong Kong-based hard luxury brands like Chow Tai Fook and Chow Sang Sang; the latter saw sales jump 22% last year to HK$25.01 billion ($3.2 billion) even as the Hong Kong luxury retail market faced headwinds. For its part, Chow Tai Fook’s transformation plan, unveiled in April, aims to rejuvenate the brand through a refreshed logo, revamped websites, and renovations of its 8,000 stores. By integrating localized cultural heritage with modern design, Chow Tai Fook has resonated with key consumers, driving sustained growth even in a challenging market. Despite broader economic challenges, some high-end jewelry brands are showing resilience, particularly in China. 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.

Why Chow Tai Fook shines as other brands struggle in China

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Why Chow Tai Fook shines as other brands struggle in China