Recently, Pandora's financial report showed that in the first three months of this year, Pandora's sales in the Chinese market fell by 17% year-on-year, which sparked heated discussions. Pandora, a jewelry brand that was once highly sought after by young people in the Chinese market, is now not doing as well as it could seem. What is the situation of the Jinan store? Why can't it be sold? In this regard, a reporter from Qilu Evening News did an investigation.
There is only one Pandora Jinan store left
On May 16, the reporter saw in Henglong Plaza, Jinan City, that it was noon, and there were not many people in the mall. However, the store of Pandora Jewelry (Jinan Henglong Store) on the first floor of the east wing of the mall was not patronized by any customers except for one clerk, and it was slightly deserted.
"Pandora originally opened a store in Yuhan Ginza, Jinan in 2015, and later moved to Hang Lung Plaza, with a maximum of three stores in Jinan." The staff of Pandora Jewelry (Jinan Henglong Store) told reporters that the sales volume is okay, the customers are mainly young women, and there is no change in the store for the time being.
In the store, the clerk showed the reporter a number of small blue and pink beads with relatively high sales, and the price was mostly about 500 to 600 yuan.
The reporter searched and found that the Pandora jewelry store in the MixC in Jinan City had been withdrawn a year ago, and the Pandora jewelry (Ginza Mall store) had also been closed for a long time. So far, Pandora Jewelry is the only one left in the Jinan market, Hang Lung Plaza.
Coincidentally, Pandora's withdrawal is not a city in Jinan. According to media reports, in Changsha, Pandora, which was once located in Yuefang, has been replaced by HM. Pandora stores in Beijing's Wangfu Central and Taikoo Li Sanlitun South in Beijing have also closed. In the upscale business districts of two major cities, Shanghai and Guangzhou, several Pandora stores have also been replaced by top international luxury brands Tiffany & Co.
It is understood that Pandora is an internationally renowned jewelry brand from Denmark, and its biggest feature is the DIY product model of "bracelet + beads". Because of the "Pandora Organization" (Pandora Organization), it is sought after by the majority of young women. Some netizens once ridiculed: As soon as you enter the "Panmen", it is as deep as the sea, and you buy them one by one.
Pandora once sold 100 million pieces a year
In 1982, Danish goldsmith Per Enevoldsen and his wife founded Pandora in Copenhagen as a goldsmithing workshop. Since 2000, Pandora has been expanding into the global market, and its stores are keen to be close to luxury brands such as Rolex, Cartier, Tiffany, etc., and in 2010 Pandora was listed on the NASDAQ OMX Copenhagen Stock Exchange.
As one of Pandora's seven core markets in the world, the Chinese market has had a "honeymoon period" with it.
In 2015, Pandora had just entered China with annual sales of 100 million pieces, and its sales soared to $2.7 billion, making it one of the top three jewels in the world, which is a miracle in the fashion world. In the heyday, customers had to wait in line when they entered the store to consume, and even overseas specialty stores were squeezed out by domestic purchasing agents.
From the location of Pandora's store in Jinan, it can be seen that Pandora is confident in its sales. Hang Lung Plaza, The MixC and Ginza Mall have relatively high consumption, and there are many luxury brands that compete with them. In many large shopping malls in first-tier cities in China, Pandora's stores are always adjacent to other international luxury brands.
In China, Pandora opened more than 240 stores in just four years, and sales peaked in 2019, with sales of 1.97 billion Danish kroner ($284 million).
"For a few hundred dollars, you can buy a small bead and match it freely on a Pandora bracelet." Yang Qing, born in the 90s, told reporters that she used to be particularly infatuated with Pandora when she went to college, because she was able to freely match according to personal preferences, which was unique and not the same.
Many interviewed citizens said that they could match their own dream "beads" in Pandora, and this "sense of customization" made young girls very excited. And compared with the overall bracelet that can easily cost thousands of yuan, the happiness that can be bought for a few hundred yuan is more in line with the consumption concept of college students and young people.
However, the good times did not last long, and since 2021, Pandora's sales in the Chinese market have begun to decline year by year. From DKK 1.126 billion (USD 162 million) in 2021 to DKK 564 million (USD 81.44 million) in 2023. In the first quarter of this year, it fell by 17% year-on-year, and sales were only 110 million Danish kroner (about 15.873 million US dollars).
Pandora has been cold in the Chinese market, and it is more obvious in the second-hand market. Pandora's jewelry has been sold at a "bone" discount, the original price is about 1,000 yuan, and the second-hand price is generally one or two hundred yuan. Even many second-hand luxury merchants will directly refuse to accept Pandora jewelry, and some merchants give a price of only "silver jewelry weight", ranging from 5 yuan to 10 yuan per gram.
In the face of declining sales and shrinking revenue proportions, Pandora also said that it is adjusting its development strategy in China, and is striving to revitalize the performance of the Chinese market by optimizing product structure, adjusting store layout, and innovating marketing methods.
Will Pandora's declining revenue in China lead to a further contraction in the number of its stores? The reporter has repeatedly tried to contact Pandora's operator in the Chinese market, Pandora Jewelry (Shanghai) Co., Ltd., but has not received any relevant reply by press time.
Why can't Pandora sell anymore?
"Pandora is basically a silver jewelry product, and it will oxidize and turn black after wearing it for a long time, which is not good-looking." Xiao Yang, a citizen of Jinan who was once a loyal fan of Pandora, told reporters that silver jewelry is very inconvenient to take care of, and it is easy to depreciate.
With the "discoloration" of products, consumers are also beginning to change their minds. It is understood that Pandora jewelry uses a large number of cheap materials such as alloys, 925 silver, zirconia and enamel, but these materials not only do not retain their value, but are also easily oxidized.
In terms of product design, industry insiders believe that Pandora lacks characteristics and cannot only rely on simple changes in materials or adding colors to complete the "new". And after the brand premium, it is difficult to be accepted by Chinese consumers.
Moreover, the DIY model of bracelet + beading is no longer exclusive to Pandora, many jewelry brands have launched this model, and the design is constantly innovating.
In addition to fashion, value preservation has also become one of the factors to consider when buying jewelry. Many netizens feel that Pandora's cost performance is not high, and spending thousands of yuan to buy a string of fashion items is not as "fragrant" as the current gold jewelry with novel styles at the same price.
According to the "2023 Jewelry Consumption Trend Survey Report" released by Ipsos, 91% of Chinese respondents tend to buy jewelry with Chinese cultural heritage characteristics.
In recent years, many domestic gold jewelry brands have gradually risen and become Pandora's fierce rivals. According to Deloitte's Global Powers of Luxury Goods 2023 report, companies from China occupy 10 of the top 100 spots, and are concentrated in the gold and jewellery industry, with well-known gold jewellery brands such as Chow Tai Fook, Lao Feng Cheung, China Gold, and Chow Sang Sang Sang among them.
The young customers who supported Pandora's explosion lacked loyalty, and they came because of their personalized and diversified needs, and when product innovation was unsustainable, they decisively chose to leave.
The luxury industry collectively "wintered"?
It's not just Pandora that can't be sold, the crystal giant Swarovski is starting to go downhill. Under the influence of declining sales, Swarovski plans to reduce its global network of 3,000 stores and carry out two rounds of layoffs from 2020 onwards, starting a restructuring plan.
At the same time, the growth rate of luxury goods sales in 2023 is only 7%. Old luxury brands such as LV, Hermès, Gucci and Balenciaga are also facing a decline in sales.
As a leading luxury group, Kering owns a series of fashion, leather goods and jewelry brands such as Gucci, Saint Laurent, Bottega Veneta, Balenciaga and Boucheron. The group's operating income in the first three months of the year shrank by 10 percent from a year earlier, to 4.5 billion euros, the data showed. The performance of the main brand Gucci fell sharply, with revenues of around 2.1 billion euros, down 18% year-on-year. Kering's chief financial officer, Armelle Poulou, said in the earnings conference that Gucci's sales performance in the Chinese market is worrying.
Industry veterans believe that the reason for the decline in the performance of some luxury brands in 2023 is that young customers account for a large proportion of their customer groups. This group is more vulnerable to economic pressures than older, wealthier buyers.
"Winning China is a fact that all luxury brands have to face, so no matter how difficult it is for Chinese customers to grasp, China is still the most important market for luxury brands." Zhou Ting, an expert in the luxury industry, believes that first of all, luxury goods must be close to Chinese consumers, link to stores and homes, and connect offline and online; Secondly, it is necessary to fully tap the potential of Chinese culture and use Chinese elements to develop more products that Chinese customers like. At the same time, luxury goods should further respect and value Chinese consumers, and cancel unreasonable sales policies such as distribution.