A year on from buying Hearts on Fire, Hong Kong headquartered jeweller Chow Tai Fook remains bullish about the brand’s prospects in Mainland China, despite the static jewellery market.
Chow Tai Fook has three standalone stores in China and, one concession there, along with another concession in Hong Kong. It plans 10 standalone stores in China by the year’s end and the company will continue to look for opportunities for new concessions.
“Hearts of Fire is a very young brand, but we have experience with the Chinese community in Taiwan where Hearts on Fire is ranked as the most desired and sellable diamond brand,” said Chow Tai Fook MD Kent Wong in an interview with Rapaport News published online.
“Chinese consumers in Taiwan like perfection. Therefore, the perfectly-cut diamond is something that they have to have. The same taste applies in Mainland China,” Wong explained.
“Hearts on Fire can leverage Chow Tai Fook’s huge customer base. Chow Tai Fook manages about 1.5 million VIP customers in China. Their repeat purchases account for about 35 per cent of our total sales, and about 65 per cent of our repeat purchase customers want gem-set jewellery, especially with diamonds.
“For Hearts on Fire, we have already set a three-year development plan. We want to enhance the shopping experience in the store through advertising campaigns and programs to support the brand.”
Chow Tai Fook bought the Hearts on Fire luxury diamond brand last June for US$150 million.
Kent said Hearts on Fire is a good complement to Chow Tai Fook because it’s a premium luxury diamond brand that has been in the industry for decades.
“Chow Tai Fook can benefit from Hearts on Fire’s experience in developing a luxury brand. It has excellent jewellery design and brings more of a global vision to our design team,” he told Rapaport News.
He said the Chinese government’s anti-graft campaign had affected the luxury watches, apparel and beverages sectors, but not jewellery.
“Our research shows that about 70 per cent of women in China’s Tier I and Tier II cities, want to receive a diamond engagement ring. Every year, we have about 12 million to 13 million couples getting married in China so the bridal market provides stable demand, no matter the market situation.”
In a broad ranging interview Wong talks about the unique RFID tagging Chow Tai Fook is using instore to study customer behaviour when looking at jewellery, marketing initiatives for Hearts on Fire and making the most of online to drive retail sales. Read the full interview here.
