Six Chinese fine jewellery brands made it to a list of the world’s 100 largest luxury companies, according to the fourth annual Global Powers of Luxury Goods report by market research firm Deloitte.
The report, titled “The new luxury consumer,” examined top luxury goods companies globally based on their consolidated sales of goods in FY 2015, which Deloitte defined as financial years ending within the 12 months to June 30, 2016.
Hong Kong-based Chow Tai Fook Jewellery Group Ltd made it to the top 10, but fell two places to number nine from its FY 2014 ranking while China’s Lao Feng Xiang Co Ltd moved one slot higher to number 13.
Chow Sang Sang Holdings International Ltd remained at the 25th spot while Luk Fook Holdings (International) Ltd ranked 28th from 31st in 2014.
Eastern Gold Jade Co Ltd of China secured the 36th spot from 53rd previously while Zhejiang Ming Jewelry Co Ltd fell six places to number 48.
Sales by these Chinese brands were heavily affected by various factors such as the strengthening of the US dollar, economic slowdown in the region, weak retail environment, and decline in tourist visits and spending in Hong Kong and Macau, according to Deloitte. This was particularly evident in four of the six Chinese jewellery groups included in the list. Despite a challenging environment, however, all the companies remained in profit.
The research firm considered Eastern Gold Jade as the star performer among the group. With a 95 percent growth in luxury goods sales and a 22.3 percent CAGR (compound annual growth rate from 2013 to 2015), it was the fastest-growing company in the top 100, moving up 17 places, noted Deloitte.
A rebound in the wholesale of jade and growth in investment demand for gold bars fuelled Eastern Gold Jade’s business, it added.
“Both mainland China and Hong Kong continue to experience a slowdown in luxury goods spending, with economic uncertainty dampening consumer confidence. The Hong Kong market is still affected by strained relations with the mainland, with many wealthy Chinese tourists staying away and choosing to travel to other cities for shopping,” remarked Deloitte.
China’s weaker economy has resulted in lower spending, and the central government’s crackdown on luxury gift-giving in the corporate sector continues to have an impact, it noted.
“Nevertheless, demand remains steady among the country’s expanding middle-class consumers, with their increasing disposable income, as they continue to buy better-quality products, and showcase their social status,” said Deloitte. “In addition, as in other emerging markets, prices of luxury goods in China are being adjusted downwards to bring them in line with global markets. This is encouraging more Chinese consumers to purchase luxury brands in domestic markets.”