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(Video Shoot & Production: Iridium Video)
In the past two years, the epidemic has changed from sudden to normal, always promoting social retail to "move from time to time". Among them, jewelry retail, as a typical category of public spiritual consumption, is facing a more complex business environment, and if you want to find business opportunities in the crisis, you must undoubtedly press the acceleration button of innovation and change.
What is the direction of innovation? A thousand explorers may have a thousand answers, and it is the continuous change of brands that has made the domestic jewelry industry quickly show a "kaleidoscope" color in the past two years. As a "long-established brand" in the industry, Chow Tai Fook is also a pioneer in innovation, which can be seen from its market performance.
(Chow Tai Fook Experience Store)
On 8 June, Chow Tai Fook's annual report for the 2021 fiscal year (1 April 2020 to 31 March 2021) showed that revenue for the fiscal year was HK$70.164 billion, up 23.6% year-on-year. While the gratifying performance is obtained, the brand value ranks among the forefront of the world. In this year's list of the "50 Most Valuable Apparel And Fashion Brands in the World in 2021" released by brand finance, the British brand evaluation agency, Chow Tai Fook ranked 14th, ranking first among Chinese brands.
So, what exactly are Chow Tai Fook's innovative keywords? Under the new consumer market, how can it achieve "contrarian growth" in continuous breakthroughs and innovations? In the jewelry retail market with a hundred flowers, how can Chow Tai Fook promote industry upgrading under the new pattern of "double circulation"? With many questions in mind, Iridium Nebula interviewed Chow Tai Fook Jewelry Group Managing Director (Chinese mainland) Chen Shichang to share Chow Tai Fook's corporate strategy, business development model and future development plan in response to changes in the consumer market.
01
Respond to changes in the consumer market with new retail and intelligence
Promote the renewal and upgrading of the jewelry industry
"The next decade will be the best day for the jewelry industry." In the reception room of the Chow Tai Fook Group Building, Chan said firmly to Iridium Nebula. With more than 40 years of experience in the jewellery industry, he has deep knowledge and experience in this market, and naturally has a unique insight.
Looking at the jewelry industry, 2004-2014 can be described as the "golden decade" of rapid development of the industry, and data show that the total sales volume of the jewelry retail market during the period increased by more than double digits every year. Although the growth rate has slowed down in recent years, the market size of the jewelry industry is still rising year by year, and the jewelry industry has gradually matured, from development, production, processing, wholesale to retail, which has formed a complete industrial chain.
However, in 2020, due to the impact of the new crown epidemic, the micro processing plants and retail stores in the jewelry industry have been shut down, suspended, and even some are facing the risk of closure, and many employees have been laid off.
Based on this background, Chow Tai Fook began to seek new changes, through the exploration of new retail and intelligent tools, to achieve interconnection with consumers, performance can grow against the trend. According to Chen Shichang, after the epidemic, Chow Tai Fook appeased every employee and franchisee for the first time, and simultaneously carried out online training, live broadcast with goods and other models, bringing effective impetus to performance growth.
(Chow Tai Fook D-ONE online jewelry customization platform)
In his view, the jewelry industry in the past was a traditional industry, but through this epidemic, investment in technology and digitalization has made the industry new and upgraded. As the application of technology matures, the jewelry industry will usher in more plasticity and fun, and the next decade will be the most exciting day for the jewelry industry.
02
Seek new growth points with retail expansion
Accelerate sniper sinking market
China has long been one of the world's largest jewelry consumer markets. Related forecasts show that with the continuous development of the domestic economy and the continuous rapid growth of national income, consumer demand for jewelry and jewelry is increasing day by day, the next 5 years China's jewelry industry will maintain a growth trend, its market size compound annual growth rate CAGR of 4.5%, it is expected that in 2026, China's jewelry industry market size will reach 789.29 billion yuan.
Under the continuous growth of the jewelry market, China's huge population base, coupled with the Chinese have a special love for gold jewelry, to meet their wedding, gift-giving and other diversified emotional needs, jewelry has gradually grown into a "daily consumption" category, which in turn contains great potential for development. The new pattern of "double circulation" with internal circulation as the main body and internal and external circulation promoting development is to create new opportunities for the development of the jewelry industry.
(Chow Tai Fook Heritage Series)
(Chow Tai Fook Heaven and Wasteland Old Series)
In line with the "double cycle" new pattern strategy, Chow Tai Fook put forward the "double power" strategic policy, that is, real power + cloud power. What is real power? In fact, it is Chow Tai Fook's retail expansion strategy, the expansion of offline channels and the sinking of channels.
At the 19th Annual Conference of the China Shopping Center International Forum and CASC2021 Asian Shopping Center Conference held this year, Chen Shichang shared that from entering the Chinese mainland in 1998, Chow Tai Fook has opened more than 2,000 branches in just 20 years, which has been praised by peers as "creating the myth of expanding stores of Hong Kong-funded brands". As of 31 March, Chow Tai Fook Chinese mainland 4,445 jewelry retail outlets (including Chow Tai Fook watches and personality brands).
(Chow Tai Fook Fashion Store)
Judging from the current retail distribution points of Chow Tai Fook, it is mainly concentrated in first- and second-tier cities. With the infrastructure, population and urbanization trends of third-, fourth- and fifth-tier cities being closely followed, the income of the sinking market population continues to grow, and the consumption potential needs to be released urgently, becoming an opportunity point for Chow Tai Fook to find new increments and achieve "sharing and win-win" with the sinking market crowd.
To this end, Chow Tai Fook will invest his business vision in the sinking market, enter its shopping malls, small department stores, and also aim at street shops with higher freedom and greater flexibility, form a "community of interests and a community of undertakings" with the sinking market, continuously accelerate the pace of expanding stores, share the market map, and jointly serve the needs of the broadest consumers.
(Chow Tai Fook Street Shop)
It is reported that through the "real power" strategic approach and the combination of multiple factors, Chow Tai Fook will open 7,000 stores by the 2025 fiscal year. Chen Shichang said that relying on strong hard power and retail expansion strategies, Chow Tai Fook can open 1-2 branches in areas/places with a population of 100,000 in the future. In the future, Chow Tai Fook will be managed by district, covering hundreds of branches in each district to create a sustainable brand.
03
Continuous innovation and iteration with smart retail
Enhance the customer experience
In addition to sniping at the sinking market through retail expansion strategies, Chow Tai Fook's exploration of new retail and intelligence is also a key part of its performance growth. Focusing on the smart retail strategy of "Cloud Power", Chow Tai Fook pioneered industry-leading smart retail tools such as Cloud Business 365, Cloud Counter, D-ONE Online Customization Platform, and Intelligent Fengke Disk, providing consumers with more and better experiences and boosting performance growth.
(Cloud Counter)
In fact, as early as a few years ago, Chow Tai Fook keenly sensed the important layout of the state's vigorous support for the development of science and technology and the high-quality development of the real economy with scientific and technological empowerment, and opened the exploration of smart retail. Under the concept of "development is the last word", in order to keep up with consumers and market changes, Chow Tai Fook invests extensively in scientific and technological and intelligent research and development every year, hoping to lead the development of the jewelry market with the help of intelligent means.
For example, the intelligent customer disk set up radio frequency identification technology (RFID) in many Chow Tai Fook stores can accurately accelerate the consumption process such as points, billing, invoicing, etc., reduce labor costs, and also improve customer experience and help brand development by collecting data analysis of consumer habits.
(Smart Client Disk)
"In the market competition, the competition is speed and decision-making." Chen Shichang said frankly, "The smart retail strategy can greatly reduce the pressure on Chow Tai Fook's manpower, inventory pressure, etc., and apply more time to study consumer preferences and habits, and the fashion trends of the future jewelry market." In the application process, smart retail tools will also continue to innovate and iterate. ”
(Cloud Business 365)
Obviously, "innovation" is the key word of Chow Tai Fook's development, and it is also the goal he has always followed. Through continuous innovation in products, design, services and other aspects, Chow Tai Fook has gone through 92 glorious years, and while moving towards the "century-old enterprise", it is still rejuvenated with youthful vitality.
Whether it is the implementation of the innovative pricing method of "one price", the creative design products such as "Peace Angel", or the formation of a brand matrix composed of personalized brands such as HEARTS ON FIRE, SOINLOVE, MONOLOGUE and ENZO with a differentiated strategy, Chow Tai Fook has always been boldly breaking through and digging deeper from the needs of consumers.
(Chow Tai Fook Personalized Brand Store)
With the post-80s and post-90s becoming the main consumer force, the younger generation of consumers are more inclined to jewelry brands that win with a sense of design. Therefore, in terms of product innovation, Chow Tai Fook not only pursues aesthetics, but also designs around the preferences of consumers, giving products more stories and emotions behind them in a limited space for play, highlighting the vitality of life.
This is how one of Chow Tai Fook's blockbusters, the "Angel of Peace" series, was born. When platinum products entered the bottleneck of development, Chow Tai Fook's design team collided platinum with enamel craftsmanship, and created the "Angel of Peace" series with red enamel embellishment, celebrating love and peace; it also carefully designed the packaging box, setting a breakthrough of more than 100,000 pieces of single products, and was also highly praised by the president of the International Platinum Association (PGI) for "making great contributions to the industry".
(Chow Tai Fook Peace Angel Series)
However, just as the so-called "obstacles are long, the line is coming", the process of innovation is destined to encounter difficulties and challenges, but Chow Tai Fook has been "insisting" to break the situation, thus gaining high praise from the industry and consumers. Chen Shichang concluded that after 92 years of ups and downs, Chow Tai Fook's core competitiveness is products and services, that is, to do a good job in every piece of jewelry and artwork, and to serve customers with the best service and the most sincere heart.
"It is very lonely and lonely to always walk on the road of design, but as long as you are willing to go on this road, there will definitely be someone on the road to accompany you." Chen Shichang pointed out that Chow Tai Fook not only has to achieve success in the brand, but more importantly, to drive the development of the jewelry industry, the future jewelry retail industry only through mutual achievements, to achieve "symbiosis and common prosperity", in order to make the domestic jewelry ecology truly meet the public's expectations for spiritual sustenance and happy life.
In the future, with jewelry as the carrier, Chow Tai Fook, which carries art design, ingenuity and smart retail, will continue to empower the jewelry industry and renew more vitality and vitality while creating a new jewelry ecology.
This article is original by Iridium Nebula Business New Media Center, author: Tang Yan, video producer: Xu Chengming, Belle Qi, the article and video copyright belongs to Iridium Nebulas, the picture comes from the brand side, not for commercial use.