Mainland Chinese jewellers continue to open new stores at a record pace as the government stimulates domestic consumption.
In the company’s most recently concluded fiscal quarter, i.e. calendar-Q2, China’s largest jeweller Chow Tai Fook said it saw company-wide sales soar 70% year-over-year driven by “buoyant consumer sentiment” in Mainland China and “continued recovery” in Hong Kong and Macau markets.
However, perhaps most notably management also said that the company opened 259 net new stores, all in Mainland China, bringing the company-wide total to 4,850 (see below chart).
Chow Tai Fook’s store count has surged in recent years as the company uses a franchising model to leverage “local knowledge” in new Mainland China markets. The strategy allows the company to penetrate smaller but rapidly growing cities colloquially referred to as “Tier III, IV and V” sized cities.
For context, “Tier I” cities are understood to include the top four or five largest cities in the Mainland, e.g. Beijing, Shanghai, Guangzhou and Shenzhen. “Tier II” is considered to include roughly 30 “larger” cities and “Tier III” approximately 70 emerging cities, and so on.
It is estimated that there are now over 170 cities in Mainland China that host a population in excess of one million people, with many more likely on the way according to current growth rates.
For the rest of this article: https://gjepc.org/solitaire/china-driving-global-diamond-demand/