Chinese jewelry retailer Chow Tai Fook is seeking new growth points and the group plans to develop its diamond wholesale business in the U.S.
Huang Shaoji, managing director of Chow Tai Fook, revealed that the group will begin its diamond wholesale business in the U.S. within the year and they have already established a team for a feasibility study. He also revealed that this wholesale business is different from the Hearts on Fire diamond brand, which was acquired by Chow Tai Fook for USD150 million in 2014. The wholesale business will sell loose diamonds and diamond embryos to American retailers; while Hearts on Fire sells its own brand of jewelry to franchisees.
At the same time, Chow Tai Fook intends to further expand into the Chinese market with Hearts on Fire. By the end of June 2016, Hearts on Fire launched 140 sales sites in mainland China. Over 80% of the revenue of this brand is from the wholesale business. Targeting the American market, the group is now hoping to develop new its business. According to Huang, the reason for choosing America is because it is the largest diamond market in the world, accounting for up to 40% by some estimates.
In addition, Huang said the wholesale business will help the group test the conditions of the new market. They will also cooperate with local retailers who are familiar with the local market.