Chow Tai Fook looks to Japan for growth
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Hong Kong jeweller Chow Tai Fook is looking to Japan for growth to compensate for its challenges in greater China.
The company is about to open a shop inside the Laox duty-free shopping centre in Tokyo’s Shinjuku district, a prime destination for Chinese tourists to the city.
Currently, Chow Tai Fook operates just 19 of its total 2326 stores outside Hong Kong and Mainland China.
Chow Tai Fook’s sales fell by 25.7 per cent in Hong Kong and Macau and by 20.9 per cent in Mainland China in the half year to September 30.
In Japan, the jeweller will targeting tourists from China, rather than Japanese consumers who are unlikely to be lured by the style of its offer. Tourism numbers from China to Japan have been rising in recent years due to more relaxed visa conditions and currency fluctuations. Last year, more than 6 million Chinese visited Japan, spending an average of US$2000, more than twice that of the average tourist.
“With an emphasis on gold and somewhat ostentatious design, Chow Tai Fook looks unlikely to appeal to the Japanese market,” commented David Blecken of Campaign Japan. “That should not be a major problem considering the continuing growth of inbound tourism to the country and relatively high spending of visitors, although Chow Tai Fook has low awareness among non-Chinese groups.”
Questions & Answers
Q.What are Chow Tai Fook's main reasons for seeking growth in Japan?
What are Chow Tai Fook's main reasons for seeking growth in Japan?
The company is facing challenges in Greater China, with sales falling significantly in Hong Kong, Macau, and Mainland China. Expanding into Japan aims to compensate for these declines and use the growing Chinese tourist market there.
Q.Why is Chow Tai Fook focusing on Chinese tourists rather than Japanese consumers in Japan?
Why is Chow Tai Fook focusing on Chinese tourists rather than Japanese consumers in Japan?
The article suggests the jeweller's style, with an emphasis on gold and ostentatious design, is unlikely to appeal to Japanese consumers. Instead, they are targeting high-spending Chinese tourists whose numbers in Japan are increasing.
Q.What proportion of Chow Tai Fook's current stores are located outside Hong Kong and Mainland China?
What proportion of Chow Tai Fook's current stores are located outside Hong Kong and Mainland China?
Chow Tai Fook currently operates only 19 of its total 2326 stores outside these two regions. The new Tokyo shop will add to this small international presence.
Q.How much do Chinese tourists typically spend when visiting Japan?
How much do Chinese tourists typically spend when visiting Japan?
Last year, more than 6 million Chinese visitors spent an average of US$2000 per person in Japan. This amount is more than double what the average tourist spends.