Gold jewellery

Sales of gold jewellery, which made up more than half of Chow Tai Fook’s total product sales, showed the strongest growth last year, with dragon-phoenix bangles among the most popular merchandise, Wong of Chow Tai Fook said. He added that Chinese tourists favour gold jewellery in contemporary designs and with high-quality craftsmanship, which carried a retail price tag of around $1,200.

Luk Fook also noted an increase in demand for gold jewellery last year despite soaring gold prices. The company’s revenue from ordinary gold business, excluding sales of scrap gold and gold bullion, recorded a year-on-year growth of 66 percent during the six-month period ended September 30, 2010, it said.

Other jewellery products

The growth in the sales of other jewellery products including diamond, jadeite and pearl jewellery was also impressive, Wong of Chow Tai Fook continued. The average price of diamond jewellery was more than $2,500. He added that jewellery with diamond weighing 1 carat and above was mainly sold to Chinese tourists. Jadeite jewellery fetched prices ranging from $6,400 to $7,700. Icy glassy jadeite was strongly favoured by tourists from northern China, he said.

As for Madia Jewellery, the most popular merchandise were floral-inspired jewellery designs and items with black and white diamonds and coloured gemstones costing $1,200 to $3,800 per piece at retail. Its products catered to the requirements of middle-class, career-oriented women, who spent an average of $1,900 to $3,200 on each purchase, Ho said.

Marketing campaign

Every year, Chow Tai Fook organises large-scale marketing activities to boost consumer confidence on jewellery purchases. Last year, the company offered shopping tours to its VIP clients, aimed at inviting high-quality mainland clients who previously spent a huge amount of money at its stores. “Results from our past several shopping tours showed that each VIP spends from tens of thousands of dollars to more than a hundred thousand dollars,” Wong said, adding that each shopping tour is limited to 20 VIP clients.

This year, the company plans to focus on the promotion of its exclusive diamond cut, called ‘Perfect Mark,” and its bridal jewellery collections. It also intends to carry out marketing campaigns in various forms, including SMS messages sent out to its 500,000 member-clients to update them on the company’s latest information and special offers; and advertisements in magazines and other media in mainland China, as well as in the customs control points in Hong Kong and Guangdong Province.

The efforts of the Hong Kong Tourism Board, Wong added, have also given the local retail market a boost. For instance, the Chinese New Year Night Parade – which was held on the first evening of the Lunar New Year – drew Chinese shoppers to the city.

Wong said jewellery sales in Hong Kong are strong throughout the year, whether it is in the peak or low season. “Still, sales over Christmas, the Lunar New Year and August summer holidays are particularly strong,” he said. The company’s retail sales over the Chinese New Year this year, for instance, were more than 40 percent higher than last year’s.

Sales network

Madia Jewellery, which has seven retail stores in Hong Kong, is optimistic on its outlook for Hong Kong’s jewellery retail market. Hence, it is preparing to open two to three additional stores in Hong Kong. “We are confident that our sales for 2011 will increase 10 to 15 percent compared to last year,” Ho said.

Luk Fook opened a flagship store at Haiphong Mansion in Tsim Sha Tsui in April 2010, bringing the total number of its retail stores in Hong Kong to 31 as of September 30, 2010.

Market outlook

Upbeat about the company’s growth prospects, Wong Wai Sheung, chief executive of Luk Fook, said that the resilient global economy and the increasing demand from Chinese consumers for luxury products would further boost the company’s business. “Hong Kong’s jewellery retail market will continue to flourish – fuelled by the rising purchasing power being wielded by the consumers in China amid a booming economy,” Wong believed.

Wong of Chow Tai Fook is also optimistic that business will continue to grow. “Soaring gold prices and the rise in visitor arrivals from China will continue to drive jewellery sales. We expect our overall turnover to increase 30 percent this year,” he said.