China's jewellery retailers take guochao to lower-tier cities

Building on the popularity of guochao (or ‘China-chic’), some of China’s biggest jewellery retailers are expanding their physical footprint into lower-tier cities.

What’s happening

• By 2025, jewellery retailer Chow Tai Fook is planning to add another 2,000 outlets to its existing total of more than 5,000 in 660 cities; many of these will be in third- or fourth-tier cities.The focus will be on “affordable luxury” with average prices of around Rmb10,000 ($1,575), the Financial Times reports.
• Lukfook Jewellery plans to open as many as 350 new outlets this year, many in lower-tier cities. At the same time it is expanding its e-commerce operations to reach younger generations.

Context

• More than half the sales of Chow Tai Fook’s heritage collection, inspired by the traditional emblems of emperors and empresses, went to Millennial and Gen Z buyers in Q2 and Q3 2021.
• China’s personal luxury goods market doubled in size between 2019 and 2021 to about $69bn, according to figures from management consulting firm Bain & Company.
• Reduced travel options have meant fewer purchases being made outside mainland China. 
• Luxury Swiss jeweller Richemont this week reported Q3 sales growth in China slowing to 7%.

Final thought

“[Gen Z] likes different types of jewellery . . . their preference for the design of Chinese cultural elements could also rise during times of high international tensions” – Xianchi Dai, associate professor of marketing at the Chinese University of Hong Kong, speaking to the FT. 

Sourced from Financial Times, Reuters [Image: Chowtaifook.com]