Competition heats up among jewellers in China

Despite stellar growth in 2011, China’s home-grown jewellery brands are facing fiercer competition as foreign brands strengthen their foothold in China, Global Times reported.

China’s jewellery retail market has been upbeat over the past two years, with total retail sales surging 40 percent year-on-year from $39 million (RMB 250 billion) in 2010 to $60 million (RMB 380 billion) in 2011, according to the Gems and Jewelry Trade Association of China (GAC).

However, analysts warned local jewellery brands of a possible slowdown this year, and that they will face tougher competition particularly from overseas and Hong Kong-based rivals in third- and fourth-tier cities.

"Small players featuring weak financial strength, unclear brand image and average products are facing possible closure," Wang Jing, a gold market analyst with Shenzhen-based Qianzhan Intelligence Co, was quoted as saying.

Currently, European and American brands such as Cartier and Tiffany have established mature markets in first-tier Chinese cities, while domestic brands such as Shanghai-based Laofengxiang and Laomiao, as well as Hong Kong-based Chow Sang Sang and Chow Tai Fook, dominate second-tier cities.

Smaller jewellery brands would vie for market share in the third- and fourth-tier cities, according to Liu Jianhua, deputy secretary-general of the Diamond Division of the GAC.

Unclear brand image and lower quality assurance put smaller home-grown brands at a disadvantage. Foreign brands can set prices several times higher than that of the domestic brands, Liu said.

Retail store of Shanghai Laofengxiang Jewelry Co Ltd

Retail outlet of Laomiao Jewellers in Jiangxi

Tag: Jewellery Retail | Luxury Goods | Cartier | Tiffany | Chow Sang Sang | Chow Tai Fook | Laofengxiang | Laomiao | Hong Kong | Shanghai | China | Gems and Jewelry Trade Association of China

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