Tse Sui Luen makes big mainland expansion plan
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Hong Kong Jeweller Tse Sui Luen (TSL) has moved to target the Chinese middle class, according to a report.
TSL has announced plans to open 100 outlets in the Chinese mainland within two years, taking its total number of stores to 487.
The firm’s deputy chairman and chief strategy officer Estella Ng Yi-kum commented that “Even though the yuan is on a downward trend, we have strategies to adjust pricing and use product designs to fit the appetite of our customers to boost sales.”
She said that China will be “the growth engine for TSL for the coming 20 years,” attributing this to the rise of the Chinese middle class, which is expected to flourish under changes planned for China’s tax code.
Ng did admit to concerns about the weakening of the RMB making TSL products more expensive for Chinese shoppers in Hong Kong and devaluing TSL’s assets in China comparative to the US Dollar-pegged HKD. The firm will address these issues strategically by potentially raising prices in China and focusing on smaller, more profitable diamonds.
“We use design to make a 0.3 carat diamond look like half a carat,” Ng said. “So we can have a good margin and attract customers.”
Questions & Answers
Q.What is Tse Sui Luen's target for store expansion in mainland China?
What is Tse Sui Luen's target for store expansion in mainland China?
Tse Sui Luen plans to open 100 new outlets in mainland China within the next two years. This expansion will increase its total number of stores to 487, targeting the growing Chinese middle class.
Q.How does Tse Sui Luen plan to address the weakening yuan and its impact on sales?
How does Tse Sui Luen plan to address the weakening yuan and its impact on sales?
The firm intends to adjust pricing and use specific product designs to appeal to customers' preferences, aiming to boost sales despite the yuan's downward trend. They may also strategically raise prices in China.
Q.What is Tse Sui Luen's strategy for maintaining profit margins with diamond products?
What is Tse Sui Luen's strategy for maintaining profit margins with diamond products?
Tse Sui Luen plans to focus on smaller, more profitable diamonds. They will use design techniques to make a 0.3 carat diamond appear larger, like a half carat, to attract customers and maintain good margins.
Q.What is the long-term outlook for Tse Sui Luen's growth in China?
What is the long-term outlook for Tse Sui Luen's growth in China?
The firm believes China will be its primary growth engine for the next two decades. This growth is anticipated due to the rise of the Chinese middle class and changes expected in China's tax code.
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