Chow Tai Fook, Hong Kong’s largest jewelry company, has ruled out introducing a line of lab-grown diamonds at its stores, noting that Chinese consumers are not interested in the category.
“We don’t have any idea to develop lab-grown diamonds at this moment because we don’t see any market for it right now,” Kent Wong, managing director of Chow Tai Fook Jewellery Group, said in an interview with Rapaport News on Friday the 14th. “Chow Tai Fook is a jewelry brand as well as a diamond brand, and our brand value is authenticity, so we have to live up to that.”
The emphasis on natural products being real and authentic is too strongly embedded in the local consumer mindset and Chinese culture, he explained.
To illustrate the point, he noted that Chow Tai Fook’s Monologue brand, which targets younger Generation Z consumers, saw a sharp increase in sales since it introduced a line of natural-diamond jewelry. When the brand first launched about a year ago, it excluded diamonds from the product line and focused on low-priced materials, such as crystal stones set in silver, so that it could sell at an average retail price of CNY 1,000 ($146) — compared to a group average of CNY 3,500 ($510).
However, sales stagnated, forcing the company to fine-tune the collection to include pieces with small diamonds and 18-karat gold, even if it meant the average price would go up. “The result is that sales have increased, and our diamond pieces now contribute 40% of Monologue’s revenue,” Wong reported. “So, it’s important to understand that Chinese consumers value natural as real, and there’s no grey area in China when it comes to man-made diamonds.”