French luxury player to open more stores in China

French luxury jewelry brand Van Cleef & Arpels said it will continue to open new boutiques and increase investments in China, one of its three largest markets globally, fueled by its confidence in sales growth potential in China.

The luxury jewelry brand said that after the COVID-19 pandemic, Chinese consumers have become more mature with regard to services and experiences, and their price sensitivity has declined. Many people choose to purchase luxury products in the country, instead of going abroad for cheaper prices.

Entering the China market in 2005, Van Cleef & Arpels now has 29 boutiques in the Chinese mainland, with eight stores in Beijing and Shanghai. In some other major cities, the company generally operates one store in each, and aims to launch more.

The number of stores in China is similar to that in the United States, though expansion in the US began in the 1930s, indicating the faster growth of the Chinese market, it said.

"There is still potential for opening more stores in South China. For instance, there is only one store in Guangzhou, Guangdong province. Sales growth in the city has been faster than Beijing and Shanghai in the previous year," said Laura Lai, managing director of Van Cleef & Arpels China.

"We are confident in the future business growth potential in China. There are wealthy people in every part of China, unlike in the US, where they are more concentrated on the East Coast and West Coast. In China, the demand is highest in first-tier cities, and sales through e-commerce platforms have been rapidly growing in small and medium-sized cities," Lai said.

The company said Chinese luxury consumers are younger, and most of them are aged between 25 and 40. Buying luxury products fits with many Chinese consumers' willingness and values of self-reward behavior and gaining recognition.

In China, about 85 percent of the company's consumers are female, and a growing number of male consumers have been wearing jewelry in recent years. The company has launched large-sized bracelets and rings in multiple styles to cater to diversified demand.

"Although some people's consumption confidence has declined after the pandemic, we think they still believe that jewelry has relatively strong resilience and tend to buy jewelry to commemorate special and meaningful moments," Lai said.

Du Ni, a 35-year-old office worker in Beijing, said in recent years she prefers buying jewelry instead of bags, as such decorations will bring her continuous pleasure.

"If it were an anniversary, I think buying jewelry would have more commemorative value," Du said.

Last year, the global luxury market showcased remarkable stability in the face of geopolitical and economic turbulence, and sales exceeded a record 1.5 trillion euros ($1.63 trillion), according to the latest Bain & Co luxury goods worldwide market study.

Jewelry stands out as a top performer in the luxury market, with consumers making investment-led purchase decisions, surpassing watches in sales growth and showcasing strength in both uber- and entry-luxury segments, the consultancy said.

"As they continue to navigate uncertain times, brands will need to invest in growth enablers, defend core business elements, maintain agility in decision-making, and optimize stock management to ensure efficiency and responsiveness to market demand," said Xing Weiwei, a partner at Bain & Co.

Though having put more efforts into developing its online sales business in China, Van Cleef & Arpels said that as a jewelry brand, its priority is still on opening more physical boutiques, as such stores are places where consumers can experience and try on pieces for themselves.