China's largest jewelry retail chain, Chow Tai Fook, is spreading its wings further afield and is aiming to expand more broadly into retail in a bid to capture some of the business of Chinese retail giant Alibaba and other Internet retailers. It invested $54 million in shopping platform CTFHOKO.com in December and a mall to showcase products sold online, offering genuine imports such as infant formula, diapers and cosmetics at prices at least 10 percent cheaper than shops in mainland China and is aimed at consumers wary of counterfeit goods online, according to a Bloomberg report.
The firm has been prodded into the direction of general consumer goods after its traditional jewelry business suffered its worst year since 2011 as China’s slowing economy and anti-corruption campaigns curb demand for luxury goods. The firm is entering the $100 billion-a-year online Chinese market for imports such as cookies and diapers, offering genuine products as consumers remain concerned about local products after a series of scandals over fake goods. The firm is taking the omni-channel approach to new lengths by opening not just a physical store to complement its online offerings, but a shopping mall in the Qianhai free trade zone in the southern city of Shenzhen to exhibit products sold online, while some goods are also for sale at the stores.
Since the first phase of the three-story mall opened in December, Chow Tai Fook has invited 21 Hong Kong retail brands, such as cosmetics retailer Sa Sa International Holdings Ltd. and Maxim’s Cakes, to display their products and sell on its website. At least another 50 retailers will open outlets at the mall when its next phase is ready in May.