焦点 JNA May/June 2023 | 11 disposable income than ever before, allowing them to purchase luxury items such as jewellery. In addition, the development of e-commerce and social platforms make it easier for people living in smaller towns and rural areas to buy jewellery online, making this luxury more accessible to a wider swath of the population. Rising jewellery sales in recent years affirm lower-tier cities’ ability to drive growth. Several big chain stores rely on their local franchisees to speed up expansion, banking on the latter’s knowledge of local operations and markets. Chow Tai Fook accelerated the development of its retail outlets in Tier 3 and lower-tier cities in its financial year 2019 (from April 1, 2018 to March 31, 2019). At a time when the government was progressively promoting the continued development of urbanisation and infrastructure in the lower-tier cities and rural areas, the conglomerate saw great potential for development in these locations, using the franchise model to increase market penetration in lower-tier cities, especially county-level towns. Chow Tai Fook further expanded its market share in lower-tier cities in recent years with the strong support of its franchisees. In the past three years, the group increased the number of Chow Tai Fook retail outlets in mainland China from approximately 3,500 to over 7,000 and gradually increased its nationwide market share of seven to eight per cent to 10 to 11 per cent. Kent Wong, managing director of Chow Tai Fook Jewellery Group, said, “Over the past few years, Chow Tai Fook capitalised on the opportunities in lower-tier cities and the strong demand from franchisees to open shops, enabling the brand to achieve the milestone of 7,000 Chow Tai Fook jewellery retail outlets by FY2023, two years ahead of schedule.” To further expand brand influence and market share, the group launched the Boutique Project in early 2022, which shifts the focus to smaller-scale businesses that require less staff, moderate investments and reasonable returns. These stores can quickly penetrate the market while supporting the innovation and entrepreneurship of the younger generation. They also actively promote product differentiation and personalised offers, grasp consumption trends and bring the brand closer to customers. According to Wong, the group’s initial target for FY2024 was to open 600 to 800 new stores in China but the actual number would depend largely on market opportunities. “Approximately 40 to 50 per cent will be directly operated stores, mainly in Tier 1 and Tier 2 cities. The remainder will be franchised shops, which will be the main vehicle for expansion into lower-tier cities,” he explained. Market preference Consumers in China’s different cities have their own set of preferences when it comes to jewellery, with plain gold pieces moving well in lower-tier markets. According to the 2021 China Jewelry Industry Development Report released by the Gems & Jewelry Trade Association of China in April 2022, overall jewellery retail sales in China came up to RMB 720 billion (US$111.6 billion) in 2021. Plain gold jewellery, jadeite and diamond jewellery were still the largest categories, accounting for 58 per cent, 14 per cent and 14 per cent of the market, respectively. Sales of plain gold jewellery alone reached RMB 420 billion (US$65.1 billion), growing 23.5 per cent year on year. “Demand for gold jewellery is currently higher in lowertier cities than Tier 1 and Tier 2 cities,” said Wong. “In addition, more young consumers in mainland China view % share of point of sales 零售点占比 % share of sales 零售值占比 Tier 1 cities 一线城市 12.2% 14.4% Tier 2 cities 二线城市 41.3% 47.4% Tier 3 cities 三线城市 22.1% 19.9% Tier 4 cities and others 四线城市及其他 24.4% 18.3% Source: Chow Tai Fook Jewellery Group 数据来源：周大福珠宝集团 Chow Tai Fook sales in China (as of mid-FY2023) 周大福各线城市零售点与零售值占比（2023财年中期） Jewellery from Chow Tai Fook 周大福的珠宝
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