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Gold wholesaler dives into retail
By Zhang Fengming |
September 29, 2009, Tuesday
|
Online Edition
Online Edition
SHENZHEN Yihua Jewelry will double its number of retail outlets in China by the end of 2010 as the major jewelry wholesaler spearheads into retail in the aftermath of the financial crisis.
Yihua, China's first gold jewelry wholesaler, teamed up with Shanghai Lao Miao Jewelry Co and Hong Kong's Lukfook Jewelry, to tiptoe into China's retail jewelry market.
"The financial crisis squeezed wholesaler's already-low profit margins, pushing us to foray into the retail business," said Tom Xie, director and president of Shenzhen Yihua Jewelry Co today.
Wholesale profit margins are less than 10 percent, while retailers have much higher margins, Xie said.
Yihua started building up its retail chain last year and has set up almost 70 outlets in China.
The company will double its retail outlets in China in one year by adding franchises in the Yangtze River Delta, Beijing and the Pearl River Delta.
Yihua is a long-term supplier for Lao Miao, Shanghai Laofengxiang, and other major retail jewelers. It made about 8 billion yuan in revenue from wholesale sales to mainland jewelers and about 1.5 billion yuan on exports to Hong Kong jewelers.
Shenzhen and Gongguan in southern Guangdong Province is home to the majority of China's gold jewelry wholesalers.
Many famous retailers outsourced their jewelry processing business to wholesalers in Guangdong.
Yihua, China's first gold jewelry wholesaler, teamed up with Shanghai Lao Miao Jewelry Co and Hong Kong's Lukfook Jewelry, to tiptoe into China's retail jewelry market.
"The financial crisis squeezed wholesaler's already-low profit margins, pushing us to foray into the retail business," said Tom Xie, director and president of Shenzhen Yihua Jewelry Co today.
Wholesale profit margins are less than 10 percent, while retailers have much higher margins, Xie said.
Yihua started building up its retail chain last year and has set up almost 70 outlets in China.
The company will double its retail outlets in China in one year by adding franchises in the Yangtze River Delta, Beijing and the Pearl River Delta.
Yihua is a long-term supplier for Lao Miao, Shanghai Laofengxiang, and other major retail jewelers. It made about 8 billion yuan in revenue from wholesale sales to mainland jewelers and about 1.5 billion yuan on exports to Hong Kong jewelers.
Shenzhen and Gongguan in southern Guangdong Province is home to the majority of China's gold jewelry wholesalers.
Many famous retailers outsourced their jewelry processing business to wholesalers in Guangdong.
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