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September 19, 2009

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Jeweler plans major mainland expansion

HONG Kong-based jeweler Chow Sang Sang said it plans to open 25 stores a year on the Chinese mainland in the next few years, with mainland operations becoming the company's biggest profit-maker in 2012.

"Our focus is on the mainland with its huge growth potential," Vincent Chow, group general manager of Chow Sang Sang Holdings International, told Shanghai Daily yesterday. "The mainland is becoming our biggest profit engine."

Chow Sang Sang's mainland sales have shown double-digit growth in the past five years, and Chow said he expects the momentum to continue.

"With China's expanding economy, mainland demand will keep growing," Chow said. "Even in Hong Kong, our sales are underpinned by mainland tourists."

Gold is cheaper in Hong Kong and Macau than on the mainland.

In the first half of this year, the company's retail sales on the mainland rose 22 percent from a year earlier to HK$896 million (US$115.5 million), accounting for about a third of sales in its mainland, Hong Kong, Macau and Taiwan markets.

Chow said the mainland expansion will go beyond big cities like Shanghai and Beijing.

"We will also push into second- and third-tier cities to boost our sales," he said.

The company also operates 133 mainland outlets, where it vies with rivals such as Hong Kong-based Chow Tai Fook Jewelry and local rivals such as Shanghai Laofengxiang.

Gold jewelry demand on the mainland rose 9 percent in the first half of this year, while the appetite for gold worldwide contracted 8 percent.


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