Colorful jewelry is dazzling, and one of the brands that once conquered the world with its unique charm and became popular for a while is Pandora. However, when "Pandora's Magic" suddenly failed, it left the bustling business district and withdrew from the Taikoo Li Sanlitun store to replace it with another Danish brand. In the summer of 2021, Pandora's flagship store in WF Central was also handed over to Cartier, marking that Pandora has been squeezed out of the high-end market. Among them, the number of domestic stores has been reduced to 209, down from 240 in 2019. In the fourth quarter of 2022, Pandora's sales in the Chinese market fell by 41% year-on-year, and the proportion of total sales shrank to 1%. What is even more shocking is that for the whole of 2022, the total sales in the Chinese market fell by 47% year-on-year. Compared to Pandora's once-glamorous glory, the decline is astounding.
At one time, Pandora was once popular, with sales of $2.7 billion and 100 million pieces of jewelry sold in one year. But is it because of a change of heart on the part of consumers, or is it because of their own mistakes? Once upon a time, Pandora was the embodiment of beauty in the eyes of girls, and its name derived from Greek mythology gave it the attributes of the unknown and the unexpected. Pandora's box gives people a sense of curiosity, seduction and taboo, and this mysterious element has become the hallmark of the jewelry brand Pandora.
Pandora officially entered the Chinese market in 2015 and attracted the love of many women with its slogan "A bead represents a story". What sets Pandora apart from other jewelry brands is that it does not offer finished bracelets, but instead offers consumers a variety of pendants and bracelets, allowing consumers to freely combine and create personalized bracelets. This sales model brings pleasure to consumers and makes each girl believe that her bracelet is unique. Pandora positions its products as a way for women to express themselves, allowing women to choose bracelets with special meanings based on festivals, moods, and experiences, and this emotional marketing strategy is deeply ingrained.
Pandora is not only known as the "Zara of jewelry" with new products updated 7 times a year, but also offers more than 700 pendants to choose from, including holiday themes, constellations, numbers, letters, flowers, etc., to meet the various needs of women. This sales strategy has led to tremendous foundational support, spurred female consumers to buy, and was even able to easily accumulate spending in the upper five figures.
In 2016, Pandora's sales in the Chinese market increased by 175%, and in 2017, Pandora added 58 new concept stores in the Chinese market, which was reported by the media as the most promising fast-fashion jewelry brand. However, Pandora's moment of glory seemed to be short-lived.
Pandora raises the price of its products in order to pursue the high-end market, trying to compete with luxury goods. However, this move led to a massive loss of users, and Pandora's exploration of the high-end jewelry market came to an abrupt halt. At the same time, domestic jewelry brands have launched more delicate and creative leather string beaded bracelets, which appear to be more competitive compared to Pandora. Pandora's beaded bracelets don't have much of a technical threshold, and some collections are just minor changes that are then given different names. In addition, consumers complain that Pandora's bracelets are not of high quality, are prone to oxidation and breakage, and do not meet their high price. In fact, the cost of Pandora's products is very low, and the materials mainly include silver, crystal, cobalt, rhodium, etc., which are cheap and in sufficient supply, but the gross profit margin of Pandora's products is as high as 75%, which is comparable to Hermès. Compared to Hermès' gross profit margin, Pandora obviously does not have the same luxury, the investment value is almost zero, and the fashion is not as good as that of competing brands. Pandora's design gradually became lackluster, and the repurchase rate continued to decline. This series of problems has led consumers to gradually realize that Pandora is like a filtered influencer, living only in the void, and the magnificence of the appearance conceals its inner "ugliness".
Pandora has threatened to triple its revenue in China, but that goal seems increasingly distant. In response to the disappointing performance, Pandora launched a two-year "Programme NOW" with strategies such as product adjustments, store renovations and brand image renewals. However, these efforts have not had the desired effect. The continued decline in sales led to the voluntary resignation of the CEO of Pandora in China, the company laid off employees and repeated rumors of a betrayal. Pandora had tried to turn things around by opening a coffee shop and signing a male spokesperson, but those initiatives didn't have much success. Pandora's coffee shop didn't attract much attention and was also subject to competition from specialty coffee brands. In addition, Pandora has tried to announce that it will no longer use natural diamonds in favor of lab-grown diamonds, but this practice has sparked ethical controversy.
The underlying reason for this incident is that Pandora's brand values and marketing strategy are contrary to the actual needs of the Chinese market. Pandora once captured Chinese women's pursuit of personalized and emotional consumption, but with market changes and consumer demand upgrades, Pandora failed to adapt to this change and continued to adhere to its high-gross margin sales strategy, but gradually lost market share.
Overall, Pandora's experience in China is a classic example of how other brands need to adapt their strategies to meet the needs of consumers. At the same time, Pandora has also taught us a valuable lesson, that brand success depends not only on the product itself, but also on meeting the needs of the market and staying competitive through continuous innovation and improvement. I hope that Pandora can learn from this lesson, rediscover its brand charm, and return to the road to success.