Jeweller uses Hello Kitty to seduce mainland
Chow Tai Fook pushes affordable jewellery based on cultural icons in bid to lure Chinese
The world's most valuable jewellery retailer Chow Tai Fook, which counts Cartier and Tiffany & Co as competitors, is on a quest to conquer the hearts of China's future big spenders. Its weapons of choice: Hello Kitty and Winnie the Pooh.
Superman and the Angry Birds team also feature in Chow Tai Fook Jewellery Group's range of fashionable, and affordable, pieces which the firm hopes will win over the millions of mainland Chinese who live outside major cities but who are reaping the benefits of a rapidly growing economy and who remain enamoured by the gleam of gold.
"We are quite similar to the fast fashion way of business in that our products are only available for a limited period of time," said Kent Wong, managing director of Chow Tai Fook.
"The stock-keeping units will have to respond promptly to the fast-changing tastes of customers, especially young customers, who can share information about trends very quickly on their smartphones," he added.
China, the world's second-largest economy, is on track to overtake India as the world's biggest consumer of gold this year as falling prices encourage purchases for both personal use and investment.
Combine that penchant for gold with a population that is rapidly urbanising, and becoming more affluent and trend-conscious in the process, and building customer loyalty as well as keeping up with fashion becomes key to the prospects of jewellery retailers.
About 100 million people are likely to move into cities over the next 17 years, according to ratings agency Moody's.
China is already the second-largest market for Zara-brand owner Inditex, the world's biggest fashion retailer.
"Just like fast fashion, fast jewellery is the right stuff to target at the youth and the products can also sell at a better margin when they are limited edition," said Renee Tai, a Hong Kong-based analyst at brokerage UOB-Kay Hian.
Chow Tai Fook's US-based competitor Tiffany, best known for its expensive diamond necklaces and engagement rings, also gets about 30 per cent of sales globally from its less expensive jewellery, primarily silver items costing less than US$500 that have long been part of its selection.
This lower-end jewellery is the company's most profitable, though sales growth in this category has slowed in recent years. Earlier this year, Tiffany hired a new designer to make its silver jewellery more contemporary and the company introduced some new silver jewellery lines.
Chow Tai Fook's fashion jewellery, which costs between HK$200 and HK$2,000, is also a far cry from the luxury offerings that have traditionally accounted for over 80 per cent of sales, and which on average cost about 10 times as much.
