Interview | Mainland consumption is expected to follow Hong Kong? Executive Director Chow Tai Fook: Be patient and keep your career

Special interview

Written by: Lin Leqian

2020-10-05 07:15

Last update date: 2020-10-05 07:15

The new crown pneumonia epidemic has been plagued for a long time. Local retail sales have fallen for 19 consecutive months, and tourists have almost disappeared. The decline in jewelry and watches has been particularly serious.

However, with the easing of the epidemic, a "consumption rebound" first appeared in the Mainland, and long queues appeared outside luxury stores. It is hoped that the local market will also recover.

Jewellery brand Chow Tai Fook (1929) has operations in both China and Hong Kong, and can best experience the consumer markets of the two places.

The company's latest sales data show that in the second quarter of this year, the retail value of the mainland market rose slightly by 0.1% year-on-year, but the retail value of Hong Kong, Macau and other markets still fell 69%, showing completely different performance.

In an interview with "Hong Kong 01", Liao Zhenwei, executive director of Chow Tai Fook, believes that many markets around the world have returned to consumption in the same period last year, and urged local retailers to be patient and use the epidemic as an opportunity for transformation to find new directions to expand customer sources.

Liao Zhenwei described that in the past, making jewellery was Make to Stock (stock-type production), and the finished products were sold in stores or online stores, but now it is Make to Order (make-to-order production), which makes unique ornaments according to customer requirements.

(Photo by Huang Baoying)

The mainland is now "explosive buying tide", about 100,000 yuan watches are "very popular"

During the epidemic, people were trapped at home for a long time. With the lifting of restrictions, citizens can no longer wait to go out shopping. The mood of "explosive buying" among mainland citizens is particularly evident.

"During the epidemic, citizens have been bored for a long time. They have not been shopping for a period of time, and they are unable to travel. The phenomenon of retaliatory consumption will occur. Recently, watches in the mainland have been selling well, and products with a unit price of about 100,000 yuan are very popular." In the past one and a half months, many markets around the world have returned to consumption in the same period last year, as has the mainland market.

Chow Tai Fook also took the opportunity to launch a new "D-ONE" customized service, which stimulated customers' desire to spend with new experiences. Liao Zhenwei described, "Previously, making jewellery was Make to Stock. Selling online, more young people are pursuing personalized products, and the group also has to Make to Order (make to order) to make unique accessories according to the requirements of customers.” Traditional jewelry industry needs 30 to 40 days to complete this process , Through the use of factory automation, artificial intelligence and other technologies, the latest accessories can be delivered to customers in only 2 to 3 days.

For example, the group held D-ONE customized activities in Qingdao earlier, attracting about 80% of young people to participate. They generally accept diamond jewelry with a higher unit price, ranging from about 12,000 to 13,000, mainly for weddings and birthday gifts. It’s worth noting that about 10% of customers leave the store and buy it late at night until morning. They believe that stores alone cannot meet their needs. They must cooperate with online sales channels and continue to use technology to improve customer experience.

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Liao Zhenwei described that because he does not know when the epidemic will end, retailers must be patient, hold on to their business, and look for new directions in the process to expand their customer base.

(Photo by Huang Baoying)

Hong Kong businessmen must have the patience to find new directions to expand their source of customers

The local market relies on tourist consumption. Even if consumption in the Mainland rebounds, Hong Kong may not be able to benefit.

Liao Zhenwei said that during the peak period of free travel to Hong Kong, more than half of Chow Tai Fook’s Hong Kong business came from tourists. As the epidemic changes consumption between the two places, the group will deepen its relationship with local customers through different tools, such as the launch in March this year The online sales channel "My Smart" platform allows employees to promote products to customers through instant messaging software, hoping to test more technology applications in the local market to promote local consumption.

Chow Tai Fook has been rooted in Hong Kong for nearly a hundred years. Liao Zhen has been a front-line salesperson. He has joined Chow Tai Fook for more than 20 years. He has also witnessed the ups and downs of the local retail industry. When asked when the Hong Kong market will rebound, he described, "Since the return in 1997, SARS Since the financial tsunami, the retail industry has experienced many ups and downs. Every time they encounter difficulties, companies must adapt to the environment immediately. As soon as they stop, they will be eliminated. Because you don’t know when the epidemic will end, retailers must be patient , To hold onto the business, and find new directions in the process to expand the source of customers."

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