Chow Tai Fook optimistic on China
Against the odds of slowing economic growth, Hong Kong based Chow Tai Fook, has announced plans for 500 new stores in China, Hong Kong and Macau the next four years.
By 2016, the retailer of gold rings and bracelets will have more than 2000 outlets. This includes solidifying its presence both in large cities such as Shanghai as well as in more provincial markets. Its current network numbers more than 1500 in 320 cities.
Chow Tai Fook’s growth in China will strengthen its standing as the largest jewellery retailer worldwide.
Group branding manager Alan Chan said: “We’re still quite positive. Jewellery demand is growing steadily.”
Chan said that more than half of the sales come from gold products.
At present, Hong Kong has the largest retail sales output with 60 stores accounting for about one-third of total sales. But one-half of the sales, according to Chan, go to shoppers from mainland China.
A deeper penetration of the mainland market will include expansion in metropolitan areas such as Shanghai but also in third- and fourth-tier cities. He added: “In Shanghai, if we can match our sales in Hong Kong, it would have huge potential.”
Recently published research by Frost & Sullivan predicts that China, the world’s second largest jewellery market, will see a 35 per cent rise in retail sales of gold. The expansion of the gold market is sustained by urbanisation and a growing middle class with purchasing power. Chinese tradition also plays a role: gold brings good fortune and is a safe means of transferring wealth from one generation to the next.