Jewelry Industry Shifts To Second Tier Market

The sluggish Hong Kong and Macao market and the continued decline in store sales in the mainland market seem to have failed.

The reporter inquired about the layout and adjustment of the company's strategy in the current market environment, but when the deadline was released, the group did not respond.

However, Xue Shengwen told the China business newspaper: "despite the slowdown in the market, the mainland's tourism to Hong Kong is decreasing. The main driving force for the gold market will still come from the mainland market, so the company will continue to push forward the strategy of" mainland China. "

The industry insiders also told reporters that "gold products are still the main revenue items of the" Lufu jewelry ".

While gold consumption is mainly concentrated in the Chinese region, China's interior is a very precise target market.

It is not realistic to spread other regions in a short time.

So even if competition in mainland China is increasing, no one will give up the market.

Data show that by the year December 31, 2015, there were 1420 stores in the world, 1356 of which were located in the mainland, and 159 self owned stores, 96 of which were located in the mainland.

In the mainland, there are 1260 brands in the mainland.

This layout is still increasing. Only 11 months from the end of 2015 to the end of 12, there will be 11 additional outlets in the mainland and 1 stores in Hong Kong and Macao.

In the 2015 fiscal year and the 2016 fiscal year's report, the group has repeatedly mentioned that it will continue to expand the layout of the mainland of China.

The extent to which this strategy will work will not be the same between the company and the third party.

Although the mainland's economic growth is slowing down, Lufu Group believes that the middle class in mainland China will continue to rise sharply in the long run. "With the increase of per capita income in mainland China, consumers still have strong demand for jewellery products". The group insists on digging the mainland strategy, relying on Hong Kong and Macao's geography, tax advantages and group sales strategy and reputation, and the medium and long-term prospects are still optimistic.

However, on the same issue, the third party organization believes that "under the background of the downturn in the industry, the mainland market is also difficult to become a company (Lufu group).

In this round of cycles, the gold market has many bad factors, and the mainland gold and jewellery market is very competitive. It is difficult for the company to double its market share to 50% in three years.

Xue Shengwen said.

Up to now, the pformation has not been completed, and the agency lacks confidence in the prospects of the group. According to the Ye Jianzhong Research Report of GF Securities (Hongkong) brokerage firm, the third quarter data were not ideal, respectively. The net profit forecast for the 2016 and 2017 fiscal year of Lufu group was 18% and 23% respectively, and the target price was also reduced from HK $17 to HK $13.1.

Although so, but in

With no more room for pfer, Lufu group also began to make intensive efforts in the mainland market.

"In view of the saturation of the first tier cities after several years of development, the group will continue to take advantage of the joint venture mode and the dual brand management advantages of individual brands to dig deeper into the mainland market, accelerate the expansion of cities below the second tier, and build a perfect retail network to enhance market share."

Lufu group mentioned the new development strategy.

In addition, judging from the current economic situation in the mainland of China,

The product line will also be adjusted to cater for the possible expansion of middle class consumption. Its earnings report said: "the government will continue to actively promote economic development and raise the income level of residents in the future.

In the long run, the middle class will go up sharply, which will benefit the development of gold and jewellery market.

The group will also actively cooperate with the current trend of consumption demotion to introduce more fashionable, affordable and suitable jewelry for work to attract middle - class consumers.