COPENHAGEN (Reuters) - Danish jeweler Pandora is turning to traditional Chinese symbols such as peach blossom in a new collection aimed at reviving its fortunes in the world’s biggest market for luxury brands.
The collection, to be launched on Wednesday, is the first from the world’s largest jewelry maker to be tailored to a specific market and could be a test for customizing future ranges, Kenneth Madsen, head of Pandora’s Asia-Pacific region, told Reuters.
Success in China is crucial to Pandora as it tries to regain its footing after a decade of dramatic sales growth came to an abrupt halt last year, lopping more than half off its market value and leading to the ousting of its chief executive.
While mall shopping in big markets such as the United States and Britain is declining, China saw spending on luxury goods surge 20 percent last year, driven by a growing middle class.
But some global brands have struggled to take advantage.
Pandora reported a drop in sales at established Chinese stores last year, and has pledged to take steps to improve its performance, such as lowering retail prices in the country by an average of 15 percent to try to curb sales on the grey market.
Madsen said the new collection was part of the revamp.
“The Chinese love global brands, but they appreciate the local relevance and that a brand shows a commitment to China through specific designs,” he said in an interview, referring to the new collection’s focus on features such as the peach blossom flower - a symbol of love and fortune in Chinese culture.
Pandora, best known for its customizable charm bracelets, will follow up Wednesday’s launch with a big marketing push, exhibiting the new collection in all 210 of its shops in China, as well as in around 40 in Hong Kong, Taiwan and Macau.
It will also advertise the range on social media, such as the popular T-mall shopping platform and in a WeChat pop-up store, and via other promotional events in big cities.
Consultants Bain & Company said in a recent report that global luxury brands losing market share in China often fail to interact with millennials on social media platforms.
“The challenge in China is that it’s all developing at an incredible speed,” Madsen said. “It’s hard for us to keep up.”
Madsen expects the collection to represent a “significant share” of Pandora’s Chinese sales this year. Last year, China accounted for about 10 percent of overall sales of 22.8 billion Danish crowns ($3.44 billion).
Luxury spending by Chinese shoppers both at home and abroad represent one-third of the global market, but an increasing share is spent at home, according to Bain.
Chinese jewelry sales stood at 697 billion yuan ($104 billion) last year and are forecast to grow to 852 billion yuan in 2023, according to Euromonitor.
Reporting by Jacob Gronholt-Pedersen; Editing by Mark Potter