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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.”