The Chinese luxury jewellery giant Chow Tai Fook has made its global rivals feel the heat as the Hong Kong-based jeweller knocked out sales of nearly HK$ 100 billion ($12.7 billion) in 2021 with a net profit of HK$ 6.7 billion ($855 million), the highest record since 2014, according to the brand’s financial report released recently.
This outperformed the luxury jewellery sections of global labels including Hermès and the luxury conglomerate LVMH, who both saw jewellery sales increase to € 9 billion ($9.4 billion) and € 8.96 billion ($9.36 billion) respectively, narrowing the sales gap between the brand and the Switzerland-based group Richemont.
China has undoubtedly been the major source of income, helping the brand’s sales increase by 45.6% and its market share expand to 87.9% from 85.1% the year before, placing Chow Tai Fook in the number one spot for Gold and Jewellery Retailers in China.
While its signature gold offerings continue to be the backbone of revenue, inlaid jewellery, platinum, and other Karat gold accessories have also been driving the overall growth with a 19.1% year-on-year increase in sales. This is partly because of its efforts in rejuvenating the 93-year-old business in order to appeal to the younger generations of Chinese consumers who are also showing a greater appetite for these products.
While stretching its physical reach to China’s lower-tier cities with approximately 1,000 new outlets opening in those areas, strengthening its market position, Chow Tai Fook also doubled down efforts in enriching the consumer experience by curating a diverse store ambience to engage different types of audiences, such as a diamond-themed experience space and a heritage series department store, therefore, enhancing its consumer bond.
The offline efforts are coupled with innovative e-commerce strategies too, to leverage China’s digital sensation. This includes introducing new releases exclusive to online stores, and tapping into the hype of digital collectibles, turning its T Mark diamond series into NFT-powered products. Moreover, a customer-to-manufactory platform D-ONE launched in 2021 further caters to consumers’ needs for customisation. With such a strategy, the brand saw a 5% increase in revenue generated by its e-commerce section to 55% last year.
Chow Tai Fook was ranked the tenth largest luxury company in the world based on sales in 2021, joining Chanel and Hermès, according to the Global Powers of Luxury Goods 2021 published by Deloitte. The brand’s recent rise in China has offered lessons for brands in expanding in the desired market.
