China's biggest jeweler sees gold in the masses
By Donny Kwok
HONG KONG (Reuters) - 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 company hopes will win over the millions of Chinese who live outside major cities but who are reaping the benefits of a rapidly growing economy and who remain enamored 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," Kent Wong, managing director of Chow Tai Fook, told Reuters.
"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 urbanizing, 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. Continued...