Shanghai wanghong’s new landmark “Tian’an Qianshu” was officially opened on December 22, 2021. The mall has introduced more than 160 heavy brands across the fields of fashion, food, life, culture and art. Among them, the “biography” theme experience store of Chow Tai Fook breaks the layout of general traditional stores, and the characteristic decoration of the concept of “vault” and “rotary display” brightens people’s eyes, Exquisite ornaments are displayed on the conveyor belt, bringing innovative shopping space and experience.
Chen Shichang, managing director of Chow Tai Fook jewelry group, said that in the first half of this year, the mainland market accelerated expansion, the sinking strategy has achieved initial results, the recovery performance of the mainland market exceeded expectations, and the high-quality growth brought by the company’s smart retail is worth looking forward to.
expected by 2025
more than 7000 exhibition stores in the mainland market
Chow Tai Fook (01929, HK) recently announced the results of the first half of fiscal year 2022, with a total revenue of HK $44.19 billion (the same below), a year-on-year increase of 79.1%; Among them, retail and wholesale revenue increased by 47.7% and 144.6% respectively year-on-year; The operating profit was 4.47 billion, a year-on-year increase of 9.6%; As the effective tax rate fell by 6.3 percentage points year-on-year, the net profit attributable to the parent increased by 60.4% year-on-year to 3.58 billion. According to the latest financial report, the total number of retail stores of Chow Tai Fook jewelry group has reached 5214, and the strategy of promoting retail expansion has been actively implemented. During the reporting period, 624 Chow Tai Fook jewelry retail outlets were opened in the mainland, of which more than half were located in the third and fourth tier cities and other cities.
According to Chen Shichang, the mainland market is expected to increase 1000 stores throughout the year. Chow Tai Fook will continue to expand stores according to this pace in the future. It is expected that there will be more than 7000 stores in the mainland market by 2025.
“In the past few years, about 70% of Chow Tai Fook’s self operated stores and about 30% of franchise stores; this year, about 70% of franchise stores and about 30% of self operated stores.”
“We hope to lay a good foundation, and now we can expand if we have the conditions of favorable weather, place and people.” According to Chen Shichang, “In the development of first tier and second tier cities, our coverage share is about 85%. In contrast, in the fourth and fifth tier cities, the coverage rate is less than 20%, and there is still a lot of space. We hope to quickly occupy the market through the wisdom and local resources of franchisees in the third and fourth tier cities, combined with our brand experience, penetrate into low tier cities and county-level towns, and capture the huge consumption potential of the mainland market. ”
A report from Zhongtai International Securities pointed out that thanks to more effective cost control and the rapid expansion of mainland franchise channels, the main operating profit margin of Chow Tai Fook jewelry group remained at about 10.1%, with an increase of 0.1 percentage point month on month.
Zhongtai International Securities believes that the mainland is still the main growth driver of Chow Tai Fook, with revenue and operating profit accounting for 87.2% and 95.8% respectively. In fiscal year 2022, mainland revenue increased by 81.7% year-on-year to 38.55 billion yuan; Operating profit increased by 5.7% year-on-year to 4.28 billion yuan; The same store sales increased by 32.2% year-on-year, mainly due to the hot sales of Chow Tai Fook Heritage Series (accounting for 43.3% of the retail value of gold jewelry and products, 7.7 percentage points higher year-on-year) and the relatively weak international gold price, which stimulated the growth of demand for gold jewelry and other products. Chow Tai Fook jewelry group explored the development opportunities of low-level cities and added 624 Chow Tai Fook jewelry brand retail outlets during the period, of which 47.1% were concentrated in third tier and lower tier cities, and the retail value of third tier and fourth tier cities increased by 75.3% and 71.5% respectively year-on-year.
digital distribution hits the needs of young people
innovative scenario product consumption experience
Chen Shichang further analyzed that in the past, Chow Tai Fook believed that it would give front-line branches and franchisees simple and direct distribution, so that they could experience orderly and efficient retail management. “Through the systematic big data of Chow Tai Fook, we can analyze the age groups and products loved by consumers in more than 600 cities in the mainland. Therefore, we can distribute goods accurately.”
But after so many years, Chen Shichang found that today’s young people are more and more personalized and hope to have unique products.
\u3000\u3000 “Our employees, including us, want to be personalized, and some choose the best. So we still focus on digital distribution, while retaining 20% of the distribution for stores to choose. For example, in the ‘inner ecosystem’ built by zhoudafu Jewelry Industrial Park, which covers an area of about 600 mu in Wuhan, four or five thousand square meters have been set aside for an exhibition hall this year. This exhibition hall is’ very strange ‘, isn’t it In addition, only the internal staff of Chow Tai Fook, of course, including the colleagues of franchisees and direct stores, can go to the site to select goods and place orders directly, and the orders can be delivered to the designated branch within a few days. ” Chen Shichang said.
\u3000\u3000 “There is a product that we think is a ‘marriage proposal artifact’, because it is a product specially designed for marriage proposal because we have found out the pain points of young people’s needs. This product is’ protecting life ‘. Consumers use it to propose, which is particularly romantic. We also designed a beautiful music jewelry box for the product, which will sound a song full of sweetness and love when opened The music “agreement”, and lit romantic fireworks in the box. Under the fireworks, there was a proposal doll spinning. ” Chen Shichang said.
The newly launched series of new products for protecting life adopts “heart-shaped” diamonds and is made with “heart”, which fully expresses the hope that both men and women can stick to their commitment and protect their life, and redefines the classic diamond proposal ring. In addition, in recent years, the 17916 series, represented by 22K gold, which breaks through the limitations of traditional K gold, integrates enamel glaze into the peace angel series of platinum, the inheritance series of ancient gold leading the trend of jewelry, and the old series of diffractive projection patents… Chow Tai Fook continues to promote innovation in product design, category promotion and technological innovation, Radiate more vitality and vigor.
Chow Tai Fook has a series of diamond products with complete categories and characteristics, which shows the undoubted strength of brand diamonds. In 2021, it reached a strategic cooperation plan with the Natural Diamond Council to jointly show the charm of natural diamonds and jointly create a “natural diamond dream” for Chinese consumers. It is worth mentioning that Chow Tai Fook t mark diamond applies the brand of “nano lettering patent technology” exclusively developed by Chow Tai Fook to code independently, record the process of diamond from the original stone to the fingertip, like the tunnel of love, witness the story of love, and peep into the beautiful light of time.
Chen Shichang pointed out, “At present, there are a lot of artificial diamonds in the market, or mosan diamonds can be confused with the real ones, but consumers can tell it is natural through the mark of t mark, which allows customers to trace the process of diamonds from purchase to making diamond accessories. And this mark can be seen through a 150x microscope. After a few years, as long as you scan the code, you can still trace the process of diamonds and the story of your love. At present, t Ma Rk products account for almost 23% of the retail value of our diamond products. In the future, we will still focus on t mark. “
According to the financial report, in the first half of fiscal year 2022, the same store sales growth of Chow Tai Fook in the mainland, Hong Kong and Macao maintained positive growth.
The same store sales in the mainland increased by 32.2%. With the support of the improvement of local consumption in Hong Kong and the recovery of passenger consumption in Macao, the same store sales of Hong Kong and Macao surged by about 80% during the period.
During the period, Chow Tai Fook vigorously promoted the smart retail strategy and made every effort to strengthen the realization of omni-channel integration, so as to improve the customer experience. In the first half of this fiscal year, the average selling price of products purchased through cloud business 365 was about 1.8 times higher than that of Chow Tai Fook’s public e-commerce platform. The diamond products customized through the digital jewelry customization platform d-one have accounted for 4.3% of the overall diamond retail value in the mainland during the period, and their average selling price has also continued to rise, about twice higher than the average selling price of similar jewelry inlay stores in the mainland. Mainland e-commerce and retail technology applications accounted for 4.9% and 4.1% of mainland retail value respectively, contributing 9.0% of mainland retail value in total.
The financial report also shows that cloud power (smart retail) continues to achieve positive results. The mainland smart retail value from e-commerce and other retail technology applications increased by 159.8% year-on-year, accounting for 9.0% of the retail value. Among them, ASP from cloud business 365 and cloud counter is about three times that of e-commerce platform.
Chen Shichang explained: “We have accelerated the interaction with consumers through cloud business 365, cloud counter, d-one and smart tray. For example, in d-one, if consumers have their own design ideas, we can help them customize them and deliver them 24 hours as soon as possible. They can match freely, and K gold, platinum and gold can choose their own size. This model allows us to lead the whole industry I believe that consumers prefer innovative digital experience, so this is why we had a very good growth in the first half of the year. “
As a listed company in Hong Kong, environmental protection and low-carbon is also one of Chow Tai Fook’s business development ideas. The company has started to promote it as early as decades ago. Chen Shichang said that, for example, do not use materials that harm the society and pollute the environment, encourage consumers to use electronic invoices, and donate the saved expenses to green environmental protection institutions; In addition, every year, Chow Tai Fook encourages and organizes employees to do social welfare, and advocates and leads VIPs to plant trees in Alxa.
In the face of the difficulties in the special period, Chow Tai Fook has made great progress and achieved good results. However, behind this gratifying answer sheet, Chow Tai Fook’s original intention is even more valuable, Chen Shichang said: “we do every piece of art jewelry with our heart, give back to consumers with sincere services, and use our experience to improve the level of our whole jewelry industry.” It is by adhering to these “three things” that Chow Tai Fook is still full of vitality under the challenge.
The unremitting original intention of “sincerity and eternity” will also drive Chow Tai Fook to climb a new level again and again. With the sense of mission of high-quality domestic brands, Chow Tai Fook will create legends and stories in the industry and even the world.
