A Chow Tai Fook shop in Yichang, Hubei province. The company is the world's largest jewelry retailer, with more than 2,000 outlets around the globe. About 90 percent of its stores are in more than 400 cities on the Chinese mainland. Liu Junfeng / for China Daily

Chow Tai Fook to set up 600 stores and expand online sales presence

Hong Kong-based Chow Tai Fook Jewelry Group Ltd, the world's largest jewelry retailer by market value, is planning to add 600 stores and expand its online sales network on the Chinese mainland over the next three years.

Chan Sai-cheong, executive director of Chow Tai Fook, said most of the new stores will be located in China's third- and fourth-tier cities, as the company is eager to have those fast-developing markets help fuel its growth.

"To pursue faster and broader market coverage, we have been focusing on a point-of-sale expansion strategy in lower-tier cities," Chan said. 23

"These cities are experiencing higher economic growth," he said, adding that, due to the locales' resilience in the face of global economic fluctuation, they "have seen rapid expansion in their jewelry markets."

Since opening its first retail store in Beijing in 1998, the company has pursued an active expansion policy. It has more than 2,000 outlets worldwide, with 90 percent located in more than 400 cities on the Chinese mainland.

At the end of the 2013 fiscal year, Chow Tai Fook's sales revenue totaled HK$57.4 billion ($7.4 billion), up 1.5 percent from the previous fiscal year. In the meantime, business on the Chinese mainland contributed 53 percent of the total sales revenue.

"Coupled with ongoing urbanization and rising domestic demand powered by the Chinese government's measures to shift the economy to an internal consumption-driven model, the market potential on the mainland, particularly in lower-tier cities, continues to be attractive to jewelry retailers of all sizes," said Yang Lixin, director of the gemological training center for China's National Gem and Jewelry Technology Administrative Center.

The demand for jewelry remains strong in China, with a 29.6 percent year-on-year growth in retail sales from the gold, silver and jewelry sectors in the first three quarters of 2013, National Bureau of Statistics data show.

The jewelry and gold retail markets of Hong Kong and Macao also have been picking up. Tourist flows from the mainland have increased thanks to a new Chinese tourism law introduced last October that prohibits tours that involve "forced shopping".

Wong Siu-kee, Chow Tai Fook's managing director, said the law will benefit such Hong Kong retailers as his company, as more tourists from the mainland will travel under the "Individual Visit Scheme" that offers the freedom to choose whatever brands or products they want.