The Five-Minute Interview: Kent Wong.
Chow Tai Fook continues to endure declining sales as a slowdown in China, especially in Hong Kong, shows little sign of abating. Kent Wong, the company’s managing director, spoke with Rapaport News outlining its strategy to navigate changing consumer buying patterns and enable long-term growth.
Rapaport News: How has 2016 been for Chow Tai Fook?
Wong: This year has been a challenge. The global economy is still uncertain which has affected buying sentiment. We forecast our sales declines will ease in the fiscal second half since we’re working off a lower base after sales fell last year.
China is now a huge jewelry market. An adjustment was anticipated after a period of such tremendous growth in the previous three-to-five years.
What is Chow Tai Fook doing to navigate the slowdown?
The weaker market doesn’t affect our strategy in the medium-to-long term. We believe in China as the economy is still growing at about 6 percent per year.
We continue to implement our “Smart+” strategy, which we launched internally three years ago. It defines how we evaluate and differentiate ourselves to provide the best-quality product and service that will help us achieve our goal to be the most desirable brand in China.
However, we also recognize a need to adapt to a new retail model. We’re looking at how we can personalize our product and service to accommodate evolving consumer buying habits.
Whereas in the past, advertising influenced people, today people influence people. Millennials are highly aware of what their friends are doing. They like to share and show what they have on social media. That is primarily done through mobile, which has emerged as the most important device that connects people to each other as well as to things. That’s done instantly so we have to learn how to capture those instant messages.
Another factor is that the product life cycle is much shorter than before and trends are more difficult to predict. Buying behavior is changing so we have to apapt our selling model.
How does a large retailer like Chow Tai Fook offer personalization to its customers?
We initiated a program to capture millennial demand through personalization. We’ve developed a new store concept for a different type of client that offers not just a personalized product but also an experience. At the same time, we continue to strengthen our core business to attract customers through our chain stores and mass production.
Are we now seeing consolidation in the Chinese and Hong Kong jewelry retail space, reversing the aggressive expansion prior to 2015?