PortfolioWhen it comes to jewellery, Chinese believe local companies are best
Foreign brands lose out as Chinese consumers prefer value for money home-grown products than paying premium for rivals, survey shows
Many Chinese like top branded bags or cars, but when it comes to buying jewellery, they feel "value for money" is more important. And this benefits Chow Tai Fook Jewellery Group, Chow Sang Sang Holdings International and Luk Fook Holdings (International).
Brands such as Nike and Adidas dominate sportswear, while handbags are the domain of Chanel, Louis Vuitton and Prada, and luxury cars the turf of Audi and BMW, according to a Morgan Stanley survey.
But when it comes to buying jewellery as a gift for a wedding or a new-born, the Chinese would go for local brands.
"If we use Hong Kong as a reference for a mature Chinese city, we can see that despite the high disposable income per capita, mass market jewellery brands such as Chow Tai Fook, Chow Sang Sang and Luk Fook still own the lion's share of the jewellery market," Morgan Stanley said, adding the three retailers held 40 per cent of the market.
In contrast, foreign brands such as Tiffany and Cartier have only 2 per cent each.
The reason was customers believed local jewellers were conscious about "quality" and "value", the survey of about 1,500 mainland and Hong Kong jewellery buyers showed.
"This supports our thesis that mass market, value for money brands like Chow Tai Fook [which ranks well on these metrics], as opposed to premium-positioned jewellery brands, could continue to be market leaders in China, and gain share in a fragmented jewellery market," it said.