From traditional customers largely in Mainland China, to fans of Korean artiste G-Dragon, the world’s largest pure-play jeweller is expanding its reach.
Having built its reputation over 85 years for manufacturing and selling mass luxury and high-end luxury jewellery, Chow Tai Fook is growing its presence in other areas.
It’s reaching a younger audience with designs by Korean superstars like the fashionable rapper G-Dragon, while also dipping into its pocket to acquire diamond jewellery brand, Hearts On Fire for US$150 million. While Chow Tai Fook has over 2,000 points of sale in more than 470 cities, the US$150 billion company’s reach is limited to China, Hong Kong, Macau, Singapore and Malaysia. Hearts On Fire jewellery is available in 500 locations in 31 countries.
STORM talks to Chow Tai Fook’s Director of Group Branding, Alan Chan, about the trends that are shaping the brand’s gilt trip.
STORM: How have tastes in jewellery designed evolved over time?
ALAN CHAN: The general public now is more knowledgeable when it comes to jewellery appreciation and investment value. For example, they understand that good-quality, natural-coloured gemstones are rare and extremely hard to come by, as gemstones are limited by nature. Hence, the value of coloured stones is likely to increase over time. While diamonds will always have a special place in ladies’ hearts, coloured stones are becoming popular as they are beautiful and interesting, and highlight an outfit.
Chow Tai Fook also takes into account the latest trends and incorporates them into our jewellery designs. For example, we recently collaborated with famous Korean rapper and fashion icon G-Dragon and actor Lee Min Ho to launch limited-edition collections which have been well-received amongst the younger customers or fans of the celebrities.
Last August, we launched the “CTF X G-Dragon” Collection, featuring jewellery pieces designed by G-Dragon. This collection includes necklaces, bracelets and pendants based on G-Dragon’s logo, and charms based on the idol’s tattoos. This ground-breaking cooperation was transformed into widespread discussions on social media and resulted in overwhelming activity in our online as well as physical stores. The success of this collection signified our penetration into a new group of young and fashion-conscious fans. Fashion jewellery and youth line products are growing fast as the next trend.
STORM: How do jewellery design tastes differ from country to country in this region?
ALAN: Jewellery is largely inspired by a country’s culture, and each piece of jewellery is an embodiment of the country’s unique heritage and history. For example, our latest high jewellery collection — Reflections of Siem — is inspired by the stories and history of Cambodia, whose natural beauty and culture have endured the test of time, and celebrates the Khmer spirit. The jewellery pieces reflect various perspectives of Cambodia, from its nature to its temple structures as well as the lives of Cambodians.
STORM: How do trends in gold prices affect the sale of jewellery items?
ALAN: As customers’ demand for gold products returned gradually to normal, we responded to the changing market conditions and managed to improve our product mix by capturing the growth potentials for gem-set jewellery. While our operating environments as well as customer preferences never stop changing, we remain confident in extending our leading position through our valuable experience and knowledge in Greater China’s jewellery markets.
STORM: Why did Chow Tai Fook acquire Hearts On Fire?
ALAN: We believe that the brand will be a valuable partner that shares the same vision for high-quality and innovative products. The proposed acquisition of Hearts On Fire is a strategic move to complement our product portfolio with an exclusive premium diamond jewellery line and to raise our profile as world-class diamond experts in the jewellery industry. The acquisition is in line with the Group’s strategy to optimise product mix and promote higher-value products to match the spending profiles of consumers. Given its proven track record, not only in the Western markets but also in Taiwan, we are is confident that Hearts On Fire products will be well received in our major markets, including Hong Kong, Macau and Mainland China, where diamond jewellery is increasingly popular.
STORM: What are Chow Tai Fook’s expansion plans?
ALAN: For now Chow Tai Fook remains focused on serving its existing consumer base in China, Hong Kong and Macau, with plans to open over 200 new stores per year in China, and between five to seven in Hong Kong depending on market conditions. Chow Tai Fook also plans to expand outside China and will open stores in duty-free areas in Korea and the Middle East to tap demand from affluent Chinese tourists.