Jewelry & Watches in Asia-Pacific January 2020: Marketline Industry Profile

MarketLine Industry Profile
Jewelry & Watches in Asia-Pacific

January 2020
Reference Code: 0200-2417
Publication Date: January 2020
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Industry Profiles
1. Executive Summary
1.1. Market value

The Asia-Pacific jewelry & watches market grew by 11.8% in 2018 to reach a value of $339.5 billion.
1.2. Market value forecast

In 2023, the Asia-Pacific jewelry & watches market is forecast to have a value of $526.2 billion, an increase of 55%
since 2018.
1.3. Category segmentation

Jewelry & watches is the largest segment of the jewelry & watches market in Asia-Pacific, accounting for 70.9% of the
market's total value.
1.4. Geography segmentation

China accounts for 56.9% of the Asia-Pacific jewelry & watches market value.
1.5. Market rivalry

The jewelry, watches and accessories market faces certain challenges, including unstable economic conditions in
various regions of the world and currency devaluation in emerging markets. These factors impact on its further fast
development and increase the competition.
1.6. Competitive Landscape

The Asia-Pacific jewelry and watches market is highly fragmented, with players ranging from small specialty jewelers
to large multinational companies which have a global presence, meaning that competition is fierce. The majority of
leading players in the market are regional specialty jewelry and watch retailers such as Chow Tai Fook, however US
brand Tiffany & Co also has a strong presence. Chinese luxury consumers represent a fast increasing proportion of the
global luxury goods market, which has driven spending on high value jewelry and watches. This has been due to the
expansion of the affluent and fashion-savvy middle class, which is bolstering consumption, which has eased rivalry
between players and promoted the dominance of domestic brands.

Industry Profiles
TABLE OF CONTENTS
1. Executive Summary 2
1.1. Market value ................................................................................................................................. 2
1.2. Market value forecast ...................................................................................................................2
1.3. Category segmentation ................................................................................................................2
1.4. Geography segmentation .............................................................................................................2
1.5. Market rivalry ................................................................................................................................ 2
1.6. Competitive Landscape ................................................................................................................2
2. Market Overview 7
2.1. Market definition ........................................................................................................................... 7
2.2. Market analysis ............................................................................................................................ 7
3. Market Data 9
3.1. Market value ................................................................................................................................. 9
4. Market Segmentation 10
4.1. Category segmentation ..............................................................................................................10
4.2. Geography segmentation ...........................................................................................................11
4.3. Market distribution ......................................................................................................................12
5. Market Outlook 13
5.1. Market value forecast .................................................................................................................13
6. Five Forces Analysis 14
6.1. Summary .................................................................................................................................... 14
6.2. Buyer power ............................................................................................................................... 16
6.3. Supplier power ........................................................................................................................... 18
6.4. New entrants .............................................................................................................................. 20
6.5. Threat of substitutes ...................................................................................................................22
6.6. Degree of rivalry ......................................................................................................................... 23
7. Competitive Landscape 24

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7.1. Who are the leading players?.....................................................................................................24
7.2. What are the strengths of leading players? ................................................................................24
7.3. Are there any other notable players in the market? ...................................................................24
7.4. What strategies do leading players follow? ................................................................................25
7.5. What has been the rationale behind recent M&A activity? .........................................................25
8. Company Profiles 26
8.1. Chow Tai Fook Jewellery Group Limited....................................................................................26
8.2. Lao Feng Xiang Co Ltd ..............................................................................................................31
8.3. Gitanjali Gems Ltd ......................................................................................................................34
8.4. Tiffany & Co................................................................................................................................ 37
8.5. Kuwayama Corporation ..............................................................................................................40
About MarketLine .................................................................................................................................... 44

Industry Profiles
LIST OF TABLES
Table 1: Asia-Pacific jewelry & watches market value: $ billion, 2014–18 9
Table 2: Asia–Pacific jewelry & watches market category segmentation: $ billion, 2018 10
Table 3: Asia–Pacific jewelry & watches market geography segmentation: $ billion, 2018 11
Table 4: Asia-Pacific jewelry & watches market distribution: % share, by value, 2018 12
Table 5: Asia-Pacific jewelry & watches market value forecast: $ billion, 2018–23 13
Table 6: Chow Tai Fook Jewellery Group Limited: key facts 26
Table 7: Chow Tai Fook Jewellery Group Limited: Annual Financial Ratios 28
Table 8: Chow Tai Fook Jewellery Group Limited: Key Employees 29
Table 9: Chow Tai Fook Jewellery Group Limited: Key Employees Continued 30
Table 10: Lao Feng Xiang Co Ltd: key facts 31
Table 11: Lao Feng Xiang Co Ltd: Annual Financial Ratios 32
Table 12: Lao Feng Xiang Co Ltd: Key Employees 33
Table 13: Gitanjali Gems Ltd: key facts 34
Table 14: Gitanjali Gems Ltd: Key Employees 36
Table 15: Tiffany & Co: key facts 37
Table 16: Tiffany & Co: Annual Financial Ratios 38
Table 17: Tiffany & Co: Key Employees 39
Table 18: Kuwayama Corporation: key facts 40
Table 19: Kuwayama Corporation: Annual Financial Ratios 42
Table 20: Kuwayama Corporation: Key Employees 43

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LIST OF FIGURES
Figure 1: Asia-Pacific jewelry & watches market value: $ billion, 2014–18 9
Figure 2: Asia–Pacific jewelry & watches market category segmentation: % share, by value, 2018 10
Figure 3: Asia–Pacific jewelry & watches market geography segmentation: % share, by value, 2018 11
Figure 4: Asia-Pacific jewelry & watches market distribution: % share, by value, 2018 12
Figure 5: Asia-Pacific jewelry & watches market value forecast: $ billion, 2018–23 13
Figure 6: Forces driving competition in the jewelry & watches market in Asia-Pacific, 2018 14
Figure 7: Drivers of buyer power in the jewelry & watches market in Asia-Pacific, 2018 16
Figure 8: Drivers of supplier power in the jewelry & watches market in Asia-Pacific, 2018 18
Figure 9: Factors influencing the likelihood of new entrants in the jewelry & watches market in Asia-Pacific,
2018 20
Figure 10: Factors influencing the threat of substitutes in the jewelry & watches market in Asia-Pacific, 201822
Figure 11: Drivers of degree of rivalry in the jewelry & watches market in Asia-Pacific, 2018 23

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2. Market Overview
2.1. Market definition

The Jewelry, Watches and Accessories market includes gold jewelry, silver jewelry and other precious jewelry like
diamonds, platinum, precious stones (sapphires, emeralds and rubies), pearls (natural and cultured) and semi-
precious stones (e.g. quartz, opal, topaz, amethyst, coral etc.), fashion jewelry (non-precious jewelry), hair
accessories, belts, hats, gloves, scarves, sunglasses and ties, plus watches.
The market is valued at retail prices, and all currency conversions are performed using constant average 2018
exchange rates.
For the purposes of this report, the global market consists of North America, South America, Europe, Asia-Pacific,
Middle East, South Africa and Nigeria.
North America consists of Canada, Mexico, and the United States.
South America comprises Argentina, Brazil, Chile, Colombia, and Peru.
Europe comprises Austria, Belgium, the Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy,
Netherlands, Norway, Poland, Portugal, Russia, Spain, Sweden, Switzerland, Turkey, and the United Kingdom.
Scandinavia comprises Denmark, Finland, Norway, and Sweden.
Asia-Pacific comprises Australia, China, Hong Kong, India, Indonesia, Kazakhstan, Japan, Malaysia, New Zealand,
Pakistan, Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam.
Middle East comprises Egypt, Israel, Saudi Arabia, and United Arab Emirates.
2.2. Market analysis

The Asia-Pacific jewelry & watches market has experienced very strong growth in the historic period. This trend is
expected to continue in the forecast period, albeit at a slightly decelerated rate.
The Chinese market is by far the largest is the region, accounting for 56.9% of its total value in 2018, therefore its
performance is heavily reflected in the regions as a whole. India and Japan were the second and third largest,
accounting for 18.4% and 6.2%, respectively.
The Asia-Pacific jewelry & watches market had total revenues of $339,511.9m in 2018, representing a compound
annual growth rate (CAGR) of 10.6% between 2014 and 2018. In comparison, the Chinese and Japanese markets grew
with CAGRs of 13.6% and 1.6% respectively, over the same period, to reach respective values of $193,249.1m and
$21,072.6m in 2018.
China is the stand-out performer globally, with luxury sales in particular continuing to grow significantly, despite its
economy slowing for the first time in 28 years in 2018. The Chinese economy has transformed significantly in the past
decade, economic prosperity has vastly improved the standard of living in the country and led to rising incomes, which
has led to a surge in the market. Chinese luxury consumers represent a fast increasing proportion of the global luxury
market, due to the expansion of the affluent and fashion-savvy middle class, which is bolstering luxury consumption.
Many local and international luxury brands are raising product prices in Japan on the back of increased spending by
the inbound tourists and the weaker yen. For instance, in 2017, the London-based jewelry brand, Graff, announced its
plans to increase the prices of its merchandise in Japan, with some of the product categories seeing price increases of
around 8%. Similarly, Japanese luxury brand Tasaki has also announced price rises for its merchandise, including rings
and necklaces, from January 2017.

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Growth in the Indian consumer market has been driven by rapid urbanization, increasing disposable incomes and
growing purchasing powers, also driving demand for both jewelry & watches. The government’s decision to allow
100% FDI in single-brand retailing and 51% FDI in multibrand retailing coupled with its decision in 2016 to exempt
foreign retailers for three years from the 30% local sourcing rule has aided brands in entering the market.
South Korea is considered to be a very exciting market for the future in jewelry and watches. Stable economic growth,
low income inequality, and the industrial hubs of Seoul and Gyeonggi-do have fuelled spending on luxury goods.
Comparatively South Korea has a good deal of potential for growth, because of the relatively small market size
compared to its peers.
The jewelry & watches segment was the market's most lucrative in 2018, with total revenues of $240,630.7m,
equivalent to 70.9% of the market's overall value. The accessories segment contributed revenues of $98,881.2m in
2018, equating to 29.1% of the market's aggregate value.
Although most shoppers prefer to try on products in store, the growing popularity of shopping online is a key trend
which has impact the market. The Asia-Pacific online retail sector grew by 22.1% in 2018 and is expected to increase a
further 136% by 2023.
Customers have been won over by the convenience, variety and cheaper prices which online retailers of jewelry &
watches can offer. While this has helped drive growth in the market, the prominence of heavy discounting and lower
prices online has eroded revenue somewhat.
The performance of the market is forecast to decelerate, with an anticipated CAGR of 9.2% for the five-year period
2018 - 2023, which is expected to drive the market to a value of $526,241.7m by the end of 2023. Comparatively, the
Chinese and Japanese markets will grow with CAGRs of 9.5% and 1.1% respectively, over the same period, to reach
respective values of $303,588.7m and $22,267.4m in 2023.
Socio-demographic factors will continue to play an important role in the Chinese markets growth in the coming years;
the economic growth in the country, rapid urbanization and the growth of the middle class will increase disposable
incomes and encourage consumption.
GDP growth in India is expected to remain robust in the coming years, making India the fastest-growing G20 economy.
Social factors will continue to play an important role in the growth of the market. Economic development in the
country, rapid urbanization and the growth of the middle class will increase disposable incomes and encourage the
purchase of jewelry & watches.

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3. Market Data
3.1. Market value

The Asia-Pacific jewelry & watches market grew by 11.8% in 2018 to reach a value of $339.5 billion.
The compound annual growth rate of the market in the period 2014–18 was 10.6%.
Table 1: Asia-Pacific jewelry & watches market value: $ billion, 2014–18
Year $ billion € billion % Growth

2014 227.1 192.3
2015 249.3 211.1 9.8%
2016 274.2 232.2 10.0%
2017 303.6 257.1 10.7%
2018 339.5 287.5 11.8%
CAGR: 2014–18 10.6%
SOURCE: MARKETLINE MARKETLINE
Figure 1: Asia-Pacific jewelry & watches market value: $ billion, 2014–18

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4. Market Segmentation
4.1. Category segmentation

Jewelry & watches is the largest segment of the jewelry & watches market in Asia-Pacific, accounting for 70.9% of the
market's total value.
The Accessories segment accounts for the remaining 29.1% of the market.
Table 2: Asia–Pacific jewelry & watches market category segmentation: $ billion, 2018
Category 2018 %
Jewelry & Watches 240.6 70.9%
Accessories 98.9 29.1%
Total 339.5 100%
Figure 2: Asia–Pacific jewelry & watches market category segmentation: % share, by value, 2018

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4.2. Geography segmentation

China accounts for 56.9% of the Asia-Pacific jewelry & watches market value.
India accounts for a further 18.4% of the Asia-Pacific market.
Table 3: Asia–Pacific jewelry & watches market geography segmentation: $ billion, 2018
Geography 2018 %
China 193.2 56.9
India 62.3 18.4
Japan 21.1 6.2
South Korea 11.3 3.3
Rest of Asia-Pacific 51.6 15.2
Total 339.5 100%
Figure 3: Asia–Pacific jewelry & watches market geography segmentation: % share, by value, 2018

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4.3. Market distribution

Clothing, Footwear and Accessories Specialists form the leading distribution channel in the Asia-Pacific jewelry &
watches market, accounting for a 21.4% share of the total market's value.
Department Stores accounts for a further 7.5% of the market.
Table 4: Asia-Pacific jewelry & watches market distribution: % share, by value, 2018
Channel % Share
Clothing, Footwear and Accessories Specialists 21.4%
Department Stores 7.5%
Online Pureplay 3.3%
Hypermarkets, Supermarkets and Hard Discounters 2.5%
Other 65.3%
Total 100%
Figure 4: Asia-Pacific jewelry & watches market distribution: % share, by value, 2018

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5. Market Outlook
5.1. Market value forecast

In 2023, the Asia-Pacific jewelry & watches market is forecast to have a value of $526.2 billion, an increase of 55%
since 2018.
The compound annual growth rate of the market in the period 2018–23 is predicted to be 9.2%.
Table 5: Asia-Pacific jewelry & watches market value forecast: $ billion, 2018–23
Year $ billion € billion % Growth

2018 339.5 287.5 11.8%
2019 369.5 312.9 8.8%
2020 402.6 340.9 9.0%
2021 439.5 372.2 9.2%
2022 480.7 407.0 9.4%
2023 526.2 445.6 9.5%
CAGR: 2018–23 9.2%
Figure 5: Asia-Pacific jewelry & watches market value forecast: $ billion, 2018–23

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6. Five Forces Analysis

The jewelry & watches market will be analyzed taking retailers of jewelry, watches and accessories as players. The key
buyers will be taken as consumers, and manufacturers and suppliers of raw material as the key suppliers.
6.1. Summary
Figure 6: Forces driving competition in the jewelry & watches market in Asia-Pacific, 2018
The jewelry, watches and accessories market faces certain challenges, including unstable economic conditions in
various regions of the world and currency devaluation in emerging markets. These factors impact on its further fast
development and increase the competition.
Buyer power is moderate, with a large number of individual buyers having zero switching costs, leading to retailers
needing to compete to gain customers. In some countries, including Mexico, India, Turkey and Brazil, there is a
growing number of ultra-high net worth individuals who can exercise a greater degree of purchasing power.
Additionally, the emergence of fashion jewelry with a strong brand focus and adaptability to consumer demands has
meant customers are more astute with their purchases.
As loss of a relationship with suppliers could have a detrimental effect on a company’s results, keeping close
commercial relationships with a number of suppliers is a better strategy than relying on one supplier alone. The
prevalence of vertical integration by retailers tends to weaken supplier power.
These non-essential and luxury items face a very strong threat from substitute products and are affected by
fluctuations in the price and supply of diamonds, gold and, to a much lesser extent, other precious and semi-precious
metals and stones.
Trends that have been shaping the apparel industry over the past 30 years are also becoming evident in the jewelry
and watches market. These include internationalization and consolidation, the growth of branded products, a
reconfigured channel landscape, 'hybrid' consumption, and fast fashion. Consumer behavior is evolving and fine
jewels are no longer reserved for special occasions or typically gifted from men to women. The previously clear-cut
boundaries between fine jewelry, made of precious metals and stones, and fashion jewelry, typically made of plated
alloys and crystal stones, are starting to blur.

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6.2. Buyer power

Figure 7: Drivers of buyer power in the jewelry & watches market in Asia-Pacific, 2018
In the retail market, there are a large number of individual buyers, which typically weakens buyer power. However, in
some countries, including China and India, there are growing numbers of Ultra High Net Worth individuals. However,
switching costs are essentially zero as there is nothing to stop a consumer moving from one retailer to another,
leading to retailers having to compete to gain customers. Product differentiation, price sensitivity and customer
service are therefore key areas for retailers to consider and subsequently improve the buyer’s power.
Product differentiation is becoming an increasingly important aspect, particularly for the mid-range ‘fashion jewelry’
segment. Typically bought as gifts as opposed to an investment, this segment of the market is almost entirely based
around a strong brand identity and unique products. However, this does not apply to watches, of which the high-end
market is dominated by a strong brand identity with unique products in their exclusive range. The intricacy of
mechanical movement is a particularly strong measure for such product differentiation.
Price sensitivity is complex in this market. Jewelry is a non-essential item and therefore must be priced competitively
to attract customers, especially in fashion jewelry whereby changing customer demands and constantly evolving
trends lead to a lack of willingness to invest. Moreover, the regular bargain sales in this market lead to customers
becoming more astute with their purchase, further emphasizing their power in terms of price sensitivity.
According to in-house research, the compound annual growth rate of the Asia-Pacific online retail sector in the period
2017-22 is predicted to be 18.4%, strong growth will strengthen buyer power by forcing retailers to be more
competitive with their pricing. However, for highly valued brands with exclusive commodities such as diamonds or
exceptional craftsmanship, it will be regarded as an investment piece which will hold its value. As such, it is often
preferred over several disposable fashion pieces.
Some consumers, particularly in Asia, buy expensive items to demonstrate their wealth. In those cases, it can be
preferable to charge higher amounts rather than offering large discounts. Asia holds the most billionaires in the
world, with the richest 1% of the population accounting for 82% of the wealth, suggesting the buyer power is
increased as substantial sums of money can be spent on luxurious items. For example, Japan has approximately 2.8m
millionaires, which accounts for 2% of the population and a significant segment of the jewelry and watches market.
The previously clear-cut boundaries between fine jewelry, made of precious metals and stones, and fashion jewelry,
typically made of plated alloys and crystal stones are starting to blur. For example, fine jewelry used to be almost
exclusively a gift purchase, but today’s consumers are buying higher-end items for themselves. Some fine jewelry is

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available at bargain prices. Conversely, brands such as Lanvin and Roberto Cavalli sell fashion jewelry for thousands of
dollars.
Individuals do have the option to backwards integrate by making the jewelry themselves. However, it is time
consuming and will not be finished to the same standard as the retailers, who have extensive knowledge and the
necessary machinery.
Overall, the buyer power is moderate.

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6.3. Supplier power

Figure 8: Drivers of supplier power in the jewelry & watches market in Asia-Pacific, 2018
In this market, designers and manufacturers of jewelry, watches and accessories are key suppliers. They can
differentiate themselves relatively effectively by means of product design, increasing their supplier power.
A degree of vertical integration between suppliers and the market players is not uncommon. For example, Kuwayama
Corporation is a leading company within Asia-Pacific, but as well as sourcing its merchandise from a network of
manufacturers, it also has a manufacturing subsidiary which is predominately its main supplier. This form of backward
integration by retailers weakens supplier power. Nevertheless, there is also a retail presence with manufacturers
pushing through forwards integration. For example, watchmaker Swatch has networks of single-brand and multi-
brand outlets. By reducing their dependence on retail companies as customers, forward integration by suppliers
strengthens their power.
Particularly in the sourcing of precious stones and metals, suppliers gain significant power through the intellectual
knowledge upon finding such resources, which is usually kept in secrecy and extremely difficult to backwards
integrate into. This increases supplier power as it forces retailers to go through the manufacturing market instead of
backwards integrating straight into the raw materials.
Consumers may boycott players that are not seen to operate in an ethical way. This can result in players switching
suppliers or using alternative raw materials. Controversial inputs include so called 'blood diamonds'. In 2017, the
Kimberley Process Certification Scheme (KPCS), which was introduced in 2003 in an attempt to curtail trading in 'blood
diamonds', agreed to look seriously at changing its definition of conflict diamonds and how its rules are enforced.
Suppliers are therefore carefully controlled by players and even consumers.
As the loss of a relationship with these suppliers could have a detrimental effect on a company’s results, keeping close
commercial relationships with a number of suppliers is a better strategy than relying on one supplier alone. The
amount of suppliers a retailer can purchase from reduces the supplier power, as there is competition within their
segment of the market.
Whilst there is an abundance of options to produce jewelry, from gold and diamonds towards less expensive materials
such as wood, colored stones and the increasingly common synthetic diamonds; for fashion jewelry, this damages the
supplier power. However, particularly for the high-end market, the importance of quality is a necessity and as such,
provides a strong power towards suppliers, particularly for precious stones and metals.
The jewelry market is heavily affected by fluctuations in the price and supply of diamonds, gold and, to a much lesser
extent, other precious and semi-precious metals and stones. For example, gold prices fluctuated from a high of $43.74

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to a low of $37.84 in 2018. Manufacturers adjust their prices accordingly during these periods and have to re-
negotiate with large retailers upon the rate it will be sold at, often leading to a cut in their profits as retailers fight to
keep their prices consistent if prices increase.
The high cost of gold has forced many designers to work with less expensive materials, such as wood, synthetic
materials, and colored stones. While the sizes of the stones are growing, the share of gold and platinum is decreasing.
Even in the bridal market the use of traditional materials is decreasing.
Switching costs could be increased if long-term contracts are involved; however, there are few inherent switching
costs, and the effect is to weaken supplier power.
Overall, the supplier power is moderate.

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6.4. New entrants

Figure 9: Factors influencing the likelihood of new entrants in the jewelry & watches market in Asia-Pacific, 2018
The jewelry, watches and accessories retail market is generally fragmented, with a lack of dominant incumbents
leading to opportunities for new players to enter the market without the need to scale to become competitive.
Particularly for the low-end market, there are relatively low fixed costs or retaliation of major competitors due to the
sheer volume of retailers in the market. The fashion jewelry market is also fragmented with many fashion retailers
expanding their product ranges to incorporate fashion jewelry lines to complement their main clothing lines. Most
major luxury retailers are now well established in Asia Pacific with China and Hong Kong being two of the most
penetrated markets at 89% and 81%, respectively. However, following several years of rapid expansion, these markets
are approaching saturation point.
Specifically for the low-end of the market, the threat of new entrants is very strong due to the fact that anyone can
make ‘jewelry’, which could include beads or rough stones which are easily accessible to individuals to build their own
necklace. However, fine jewelry is very difficult to source in terms of the authenticity of the stone itself. For example,
Burmese rubies are worth more simply because they are from Burma, which is hard to access as a new entrant.
Nevertheless, there is a surprisingly vast amount of wholesalers in the market, which makes the potential threat of
entry high as suppliers in general are easily accessible.
There are no specific regulations or qualifications to start selling jewelry. Retailers that wish to offer consumer credit
to facilitate purchases of expensive items will need to comply with the appropriate financial services regulations.
Advertising is important in this market for players trying to build brand identity. As shoppers increasingly engage in
online research prior to an in-store purchase and frequently turn to social media for information and advice, market
players turn to digital media as a platform for conveying information, shaping brand identity, and building customer
relationships.
Capital requirements are not particularly high, and small independents - perhaps offering hand-made items - can
thrive alongside both mass-consumer chains and the upmarket boutiques. Some markets exhibit idiosyncrasies here.
For example, duty-free shops constitute a large channel for jewelry and watch sales in South Korea. Already number
one in duty-free shopping with 11% of the global market, the South Korean government has confirmed that further
downtown duty-free stores will be licensed. This booming niche is driven by increased visitor numbers, especially from
China.
Globally, online fashion jewelry sales are predicted to capture 15% of the overall sales by 2020, with fine jewelry
currently only accounting for 4%. In this market, capital requirements are not particularly high, and small

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independents - perhaps offering hand-made items - can thrive alongside both mass-consumer chains and the
upmarket boutiques. For new entrants, the low cost and ever growing market shows an opportunity to penetrate the
market.
A potential barrier for new entrants is the emergence of the largest jewelry retailers looking to capture the market by
providing jewelry, watches and accessories at every price-point of the market. For example, Chow Tai Fook has
jewelry ranging from CNY230 ($34) to CNY97,000 ($14,370). This weakens the threat of new entrants as the market is
covered by companies which have the financial power to retaliate towards potential threats.
There are opportunities in fashion and costume jewelry, with lower prices driving growth in this market. Statement
fashion jewelry pieces have become as important in buying into a new trend as the likes of other accessories such as
handbags. Jewelry styles and used materials have become more diverse, and bold. As the fashion industry is
developing more male-specific trends and styles, male fashion jewelry has also been on the rise, thus opening up a
new marketplace for costume jewelry brands.
Particularly for high-end jewelry and watches, many consumers buy from well-respected brands such as Lao Feng
Xiang for the experience. From the large retail spaces in prime positions, to the intricacies in the display of products
and subsequent packaging, it is nearly impossible for new entrants to gain the respect and level of service these
brands possess.
Intellectual property is only a significant issue where retailers are highly reliant on specific designers' work.
Mergers and acquisitions allow expanding players' geographical presence and offerings.
The emergence of e-commerce and global tourism has created a greater transparency around the international price
differentials between jewelry, watches and accessories. Hefty price tags on luxury jewelry has meant that customers
are struggling to reconcile the price of such products with their real value. As a result, such brands must assess how to
mitigate this volatility under the concern that new entrants will provide a more attractive pricing model for a global
scale. .
Overall, there is a strong likelihood of new entrants.

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6.5. Threat of substitutes

Figure 10: Factors influencing the threat of substitutes in the jewelry & watches market in Asia-Pacific, 2018
While there are a number of reasons why products in this market are purchased, they are most commonly bought as
gifts or luxuries which are non-essential. Moreover, there is a wide range of substitutes both in terms of other gift
options, general expenses and alternative luxuries which could be bought instead. Therefore, different substitutes
might be relevant at different price-points: confectionery at one end of the scale, a holiday or a car at the other.
In some countries they may also be used as investments or stores of wealth. In this situation, financial services
products are also significant forms of indirect competition.
Minimal switching costs are involved within the market, with many substitutes providing benefits that jewelry and
watches cannot supply.
Homemade jewelry is a form of substitution for this market, particularly due to its normally high value being a valid
reason to produce it at home. However, it does require an expense in terms of the time taken to complete and the
overall quality of the finished product, which would not be up to the same finish as a professionally designed watch or
jewelry.
Counterfeit forms of jewelry and watches are continuing to flood the market each year. Asia-Pacific has been regarded
as the home of counterfeit culture, sourcing over 95% of the counterfeit goods worldwide and a predicted value of
$2.66tn by 2022. Whilst not only taking market share from genuine retailers, these counterfeits are also severely
damaging their brand image. Rolex is the most counterfeited watch brand in the world and in being so, deters genuine
buyers from spending thousands on an item that could be viewed as fake or common. In China, this is a particularly
acute problem where brand protection, copyright and patents are significantly less protected than elsewhere in the
world.
The threat from substitutes is therefore strong.

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6.6. Degree of rivalry

Figure 11: Drivers of degree of rivalry in the jewelry & watches market in Asia-Pacific, 2018
Jewelry, watches and accessories retailing is highly fragmented and competitive. Specialty jewelers such as Chow Tai
Fook and Gitanjali Group compete against other retailers that sell jewelry, including department stores, mass
merchandisers, discount stores, apparel and accessory fashion stores, brand retailers, shopping clubs, home shopping
television channels, direct home sellers and online retailers and auction sites.
Fashion retailers are also expanding their product ranges to incorporate fashion jewelry lines. The specialists are
compelled to succeed in one market, whereas more diversified companies can compensate for any weakness in
jewelry sales with other revenue streams. Furthermore, specialists may experience strong seasonality, with sales
peaking during key holiday events such as Christmas or more recently sales events such as 'Black Friday' or China's
'Singles Day'. These events require strong competition with heavy reductions, alongside an investment in temporary
staff and advertising, which can put a severe strain on profits. However, the market is not difficult to exit, and this
eases rivalry.
Recent years have seen luxury brands begin to expand beyond their core fashion businesses into the food & beverage
market, i.e. examples include 1921 Gucci restaurant in Shanghai and Cafe Dior by Pierre HermÃ on the top floor of
Christian Dior's flagship store in Seoul. It illustrates the transitioning of brands to being more lifestyle-driven. Including
a food & beverage component in stores enables luxury retailers to provide their consumers with a more complete
experience in which they can shop, relax and socialize.
Compagnie Financiere Richemont is a parent company to a wide variety of well-known luxury brands at different price
points. As such, the rivalry within the market is reduced as it is less reliant on the sale of jewelry and watches, or even
a specific brand image for its overall success. Tiffany & Co on the other hand, is dependent upon the success of its
individual brand and the jewelry and watches market. However, in terms of the degree of rivalry, this can create a
competitive advantage in terms of a strong brand image, as opposed to a parent company spreading thin across the
market.
The under-penetrated emerging markets of Asia Pacific, including Malaysia, Thailand, India, Vietnam and Indonesia
are expected to drive the global jewelry and watches sales and luxury goods as a whole in the forecast period. In
China, the growing trend of shopping for luxury goods abroad and the recent ban on spending public funds on luxury
items for gifting may cause a slowdown of retail sales.
Overall, there is a moderate degree of rivalry.

Industry Profiles
7. Competitive Landscape
The Asia-Pacific jewelry and watches market is highly fragmented, with players ranging from small specialty jewelers
to large multinational companies which have a global presence, meaning that competition is fierce. The majority of
leading players in the market are regional specialty jewelry and watch retailers such as Chow Tai Fook, however US
brand Tiffany & Co also has a strong presence. Chinese luxury consumers represent a fast increasing proportion of the
global luxury goods market, which has driven spending on high value jewelry and watches. This has been due to the
expansion of the affluent and fashion-savvy middle class, which is bolstering consumption, which has eased rivalry
between players and promoted the dominance of domestic brands.
7.1. Who are the leading players?

Chow Tai Fook Jewellery Group Limited (Chow Tai Fook) Limited is a provider of design, manufacturing, trading, and
marketing of jewelry products. The company’s products portfolio include gem-set jewelry, gold products, platinum /
karat gold products and watches. It also offers engagement rings, wedding bands, necklaces, pendants, earrings,
chain/anklet, bracelets and figures. Chow Tai Fook is also involved in the distribution of watches of various brands.
The company operates in China, Japan, Taiwan, Macau, Hong Kong, Singapore, Malaysia, South Korea and the US.
Lao Feng Xiang Co Ltd (Lao Feng Xiang) is a designer, producer and supplier of jewelry products. The company offers
gold and silver products, diamonds, jewelry glasses, jade, pearl, enamel, red coral, platinum, wedding jewelry, colored
stones and silverware. Its product portfolio includes gold ornaments, rings, chain, pendants, silver bracelet, silver pot,
silver teapot, earring, brooch, bangle, necklace, dental carvings, and others. Lao Feng Xiang also offers after-sales
services. The company owns and operates retail stores located across China.
Tiffany & Co (Tiffany) is a holding company, specialized in designing, manufacturing and selling fine jewelry through its
principal subsidiary, Tiffany and Company. The company is a provider of engagement jewelry, diamond engagement
rings for brides and grooms. It also offers jewelry made of platinum, diamond, gold and other precious metal. Apart
from these, Tiffany sells timepieces, leather goods, sterling silver goods (other than jewelry), crystal, stationery,
fragrances and accessories.
Kuwayama Corporation (Kuwayama) is a manufacturer and wholesale retailer of jewelry products. The company
engaged in designing, manufacturing, processing and marketing of jewelry items such as necklaces, pendants, rings,
bracelets and ear rings under the brand name, EmbrasseR purest. Kuwayama has manufacturing facilities in Japan,
Thailand and China.
7.2. What are the strengths of leading players?

Chow Tai Fook has retail network comprising of over 3,490 points of sale in China, Hong Kong, Singapore, Malaysia,
South Korea and the US, a strong retail presence has helped it maintain its market leading position. In mainland China,
the company operates 3,340 points of sale.
7.3. Are there any other notable players in the market?

Cartier (a subsidiary of Richemont) has run several campaigns in China to increase the awareness of the brand and has
since become a notable player in the market. Following the success of the campaigns and sensing the increasing
spending through online channels by the Chinese, the retailer is adopting the strategy of targeting luxury customers
online to boost sales. For instance, it unveiled its online store portal on WeChat, a popular social media platform in
China. With an active monthly user-base of 850 million, WeChat serves as a potent tool for luxury retailers to

Industry Profiles
advertise their brands and boost sales. Cartier sells over 60 products through WeChat including its famed Clou
Collection and also holds sales events on special occasions such as Valentine’s Day to boost sales.
Gitanjali is one of the largest integrated branded jewelry manufacturer and retailers in the fast growing Indian market.
Its strong strategic presence across the critical value chain allows the company to have a complete control over its
product development and distribution operations. Its operations span across the entire value chain from sourcing,
cutting, polishing and distribution of rough diamonds to manufacturing, branding and retailing of jewelry. The
company sources diamonds from Diamond Trading Company (DTC) and secondary markets and processes at
Touchstone (Surat), Rajiv Gems Park (Hyderabad) and SEEPZ (Mumbai). The polished diamonds are then supplied to
domestic players and exported to Antwerp, the US and Hong Kong and other countries in Europe. It has seven jewelry
manufacturing facilities with over 3,000 Points of Sale (PoS) across 200 cities in India. The company’s integrated
business model offers a competitive advantage as it produces and retails the jewelry under various brands in India,
and also in global markets. Gitanjali also has operations in retail and lifestyle businesses. Under this business, the
company planning to launch its own umbrella branded retail business Gitanjali Lifestyle by offering 40 brands of both
own and franchised and it also intends to soon sell branded jewelry in its stores.
7.4. What strategies do leading players follow?

One of the key strategies which leading players implement to promote growth is introducing exciting new products to
the market, in order to attract customers. Tiffany & Co has followed this strategy to drive growth and maintain a
leading market position. In August 2019, the company announced the launch of Tiffany Men’s, a dedicated men’s
collection and the first of its kind for the company. The new collection includes a range of products including
bracelets, bangles, necklaces and watches, ranging in price from $200 to $15,000. The launch will not only help
Tiffany’s expand into the men’s luxury market but also help diversify its customer base by attracting male customers.
7.5. What has been the rationale behind recent M&A activity?
LVMH Moet Hennessy Louis Vuitton SE, a luxury group and Tiffany & Co., a luxury jeweler, announced on 28 October
2019 that the companies have entered into a definitive agreement whereby LVMH will acquire Tiffany for $135 per
share in cash, in a transaction with an equity value of approximately $16.2bn. LVMH’s acquisition of Tiffany has been
approved by the boards of directors of both companies and the Tiffany Board of Directors recommends that Tiffany’
shareholders approve the transaction with LVMH. The transaction is expected to close in the middle of 2020 and is
subject to customary closing conditions, including approval from Tiffany’s shareholders and the receipt of regulatory
approvals. LVMH said it believes that the acquisition will boost its geographic presence and complement its 75
distinguished Houses, as well as expanding its presence in the jewelry and watches market. Since 2015, Tiffany & Co
has reported a fall in its annual sales and profit, therefore there are hopes that the acquisition will give the company
the financial boost it needs.
In September 2014, Chow Tai Fook Jewellery Group Limited entered into a conditional agreement to acquire all the
equity interests in Hearts on Fire Company LLC, a US-based luxury branded diamond company offering premium bridal
and fashion jewelry products, for $150 million on a cash-free and debt-free basis. In 2013, Hearts On Fire reported net
sales of $104.8 million, which represented an increase of 5.5% from $99.3 million a year earlier. The acquisition has
helped bolster Chow Tai Fook’s long term growth plans and expanded its presence in diamond products which has
benefited its core business offerings.

Industry Profiles
8. Company Profiles
8.1. Chow Tai Fook Jewellery Group Limited
8.1.1. Company Overview
Chow Tai Fook Jewellery Group Limited (Chow Tai Fook) Limited is a provider of design, manufacturing, trading, and
marketing of jewelry products. The company’s products portfolio include gem-set jewelry, gold products, platinum /
karat gold products and watches. It also offers engagement ring, wedding bands, necklace, pendant, earring,
chain/anklet, bracelet and figures. Chow Tai Fook is also involved in the distribution of watches of various brands. The
company operates in China, Japan, Taiwan, Macau, Hong Kong, Singapore, Malaysia, South Korea and the US. Chow
Tai Fook is headquartered in Central, Hong Kong.
The company reported revenues of (Hong Kong Dollars) HKD66,660.9 million for the fiscal year ended March 2019
(FY2019), an increase of 12.7% over FY2018. In FY2019, the company’s operating margin was 10%, compared to an
operating margin of 10.1% in FY2018. In FY2019, the company recorded a net margin of 6.9%, compared to a net
margin of 6.9% in FY2018.
8.1.2. Key Facts
Table 6: Chow Tai Fook Jewellery Group Limited: key facts
Telephone: 852 2 5243166

Fax: 852 2 5269178
Number of Employees: 30000
Website: www.chowtaifook.com
Financial year-end: March
Ticker: 1929
Stock exchange: Hong Kong Stock Exchange
SOURCE: COMPANY WEBSITE MARKETLINE
8.1.3. Business Description
Chow Tai Fook Jewellery Group Limited (Chow Tai Fook) Limited is a Hong-Kong based company that manufactures
and sells jewelry products and watches. Chow Tai Fook has retail network comprising of over 3,134 stores in China,
Hong Kong, Singapore, Malaysia, South Korea and the US.
The company's rest of the retail partner locations are mainly situated in the UK, Ireland, Caribbean and Asia-Pacific
region. Chow Tai Fook offers a range of jewelry products and watches. The jewelry products include Gem-set jewelry,
Gold Products, Platinum / karat gold products, Gemstones, and watches. It also offers wedding, birthday, and
corporate gifts.
Chow Tai Fook offers its products under the brand 'Chow Tai Fook'. Geographically, the company classifies its
operations into two segments, namely Mainland China, and Hong Kong, Macau and Other Markets. In FY2019,
Mainland China segment accounted for 63.7% of the company's total revenues, followed by Hong Kong, Macau and
other Markets with 36.3%.
The company's subsidiaries include CTF Watch (HK) Limited, Highrise Achiever Limited, Bentley Trading Limited,
Techni Development Investment Limited, Chow Tai Fook Jewellery Company Limited, Beijing Chow Tai Fook Jewellery

Industry Profiles
Company Limited, Chow Tai Fook Jewellery and Watch Company (Macau) Limited, Chow Tai Fook Jewellery
(Shenyang) Company Limited, and Chow Tai Fook Jewellery (Shenzhen) Company Limited, among others.

Industry Profiles
Table 7: Chow Tai Fook Jewellery Group Limited: Annual Financial Ratios
Key Ratios 2015 2016 2017 2018 2019

Growth Ratios
Sales Growth % -16.96 -11.96 -9.45 15.44 12.69
Operating Income Growth % -24.91 -42.87 11.33 33.69 10.75
EBITDA Growth % -24.91 -42.87 11.33 33.69 10.75
Net Income Growth % -24.97 -46.09 3.87 34.03 11.77
EPS Growth % -24.81 -46.08 3.83 33.87 11.95
Working Capital Growth % -2.41 -11.58 -12.44 7.98 -8.00
Equity Ratios
EPS (Earnings per Share) HKD 0.55 0.29 0.31 0.41 0.46
Dividend per Share HKD 0.28 0.16 0.16 0.27 0.35
Dividend Cover Absolute 1.95 1.84 1.91 1.52 1.31
Book Value per Share HKD 3.94 3.49 3.18 3.34 3.08
Profitability Ratios
Gross Margin % 29.67 27.64 29.20 27.41 27.91
Operating Margin % 10.97 7.12 8.75 10.13 9.96
Net Profit Margin % 8.49 5.20 5.96 6.92 6.87
Profit Markup % 42.19 38.20 41.24 37.76 38.71
PBT Margin (Profit Before Tax) % 10.36 6.96 8.54 9.86 9.53
Return on Equity % 13.84 8.43 9.61 12.25 14.88
Return on Capital Employed % 17.10 10.91 13.34 16.27 19.10
Return on Assets % 8.88 5.04 5.82 7.66 7.64
Return on Working Capital % 20.61 13.32 16.94 20.97 25.24
Operating Costs (% of Sales) % 89.03 92.88 91.25 89.87 90.04
Administration Costs (% of Sales) % 19.21 20.54 20.11 18.46 18.04
Liquidity Ratios
Current Ratio Absolute 2.72 2.61 2.68 2.38 1.96
Quick Ratio Absolute 0.68 0.91 0.78 0.67 0.51
Cash Ratio Absolute 0.43 0.69 0.50 0.38 0.28
Leverage Ratios
Debt to Equity Ratio Absolute 0.17 0.23 0.21 0.24 0.33
Net Debt to Equity Absolute 0.17 0.04 0.06 0.16 0.34
Debt to Capital Ratio Absolute 0.15 0.18 0.18 0.19 0.25
Efficiency Ratios
Asset Turnover Absolute 1.05 0.97 0.98 1.11 1.11
Fixed Asset Turnover Absolute 15.92 11.77 10.67 11.73 12.24
Inventory Turnover Absolute 1.08 1.13 1.17 1.32 1.28
Current Asset Turnover Absolute 1.15 1.10 1.12 1.29 1.29
Capital Employed Turnover Absolute 1.56 1.53 1.52 1.61 1.92
Working Capital Turnover Absolute 1.88 1.87 1.94 2.07 2.53
SOURCE: COMPANY FILINGS MARKETLINE

Industry Profiles
Table 8: Chow Tai Fook Jewellery Group Limited: Key Employees
Name Job Title Board

Wong Siu-Kee Kent Managing Director Executive Board
Albert Chan Hiu-Sang Director Executive Board
Chan Chi Kong Morison Deputy General Manager Senior Management
Chan Sai-Cheong Director Executive Board
General Manager Branding and Marketing
Chan Yee-Pong Alan Senior Management
Management
Cheng Chi-Heng Conroy Director Executive Board
Cheng Chi-Kong Adrian Director Executive Board
Cheng Chi-Man, Sonia Director Non Executive Board
Cheng Ka-Lai, Lily Director Non Executive Board
Cheng Kam Biu Wilson Director Non Executive Board
Cheng Kar-Shun Henry Chairman Executive Board
Senior Manager, Procurement (Gemstones)
Cheng Ming-Chi Operational Management
Department
Cheng Ming-Fun Paul Director Non Executive Board
Cheng Ping-Hei Hamilton Director Executive Board
Cheng Ping-Hei Hamilton Finance Director and Company Secretary Executive Board
Director Investor Relations and Corporate
Danita On Senior Management
Communications
Fung Kwok-King Victor Director Non Executive Board
Kwong Che-Keung Gordon Director Non Executive Board
Lai Sau-Cheong, Simon General Counsel Senior Management
Lai Sau-Cheong, Simon Joint Company Secretary Senior Management
Lam Hung Shing Max Director Creative Senior Management
Lam Kin-Fung Jeffrey Director Non Executive Board
Lau King Ming General Manager Production and Logistics Senior Management
General Manager Business Strategy and
Lee Tin-Hei, Jade Senior Management
Analytics
Leung Man-Yan, Ivy Chief Intellectual Capital Officer Senior Management
Liu Chun Wai Bobby Director Executive Board
Mark Wong Kim-Ming Senior Manager, Diamond Department Operational Management
Or Ching-Fai Raymond Director Non Executive Board
Suen Chi-Keung Peter Director Executive Board
Tan Guet-Lan Lauren General Counsel Senior Management

Industry Profiles
Table 9: Chow Tai Fook Jewellery Group Limited: Key Employees Continued

General Manager Management Information
Tsang Siu-Kwong Senior Management
System Department
Wong Tang Alex General Manager Testing Centre Senior Management

Industry Profiles
8.2. Lao Feng Xiang Co Ltd
Lao Feng Xiang Co Ltd (Lao Feng Xiang) is a designer, producer and supplier of jewelry products. The company
provides gold and silver products, diamonds, jewelry glasses, jade, pearl, enamel, red coral, platinum, wedding
jewelry, colored stones and silverware, among others. It offers product portfolio such as gold ornaments, rings, chain,
pendants, silver bracelet, silver pot, silver teapot, earring, brooch, bangle, necklace and dental carvings, among
others. Lao Feng Xiang also provides after-sales services. The company owns and operates retail stores located across
China. It has operations in Shanghai, China and Sydney, Australia. Lao Feng Xiang is headquartered in Shanghai, China.
The company reported revenues of (Renminbi) CNY43,784.5 million for the fiscal year ended December 2018
(FY2018), an increase of 10% over FY2017. In FY2018, the company’s operating margin was 4.8%, compared to an
operating margin of 4.8% in FY2017. In FY2018, the company recorded a net margin of 2.8%, compared to a net
margin of 2.9% in FY2017.The company reported revenues of CNY15,005.4 million for the first quarter ended March
2019, compared to a revenue of CNY7,279.6 million the previous quarter.
8.2.2. Key Facts
Table 10: Lao Feng Xiang Co Ltd: key facts
Head office: No. 1904-5 Nanjing West Road, Shanghai , Shanghai, China
Website: www.laofengxiang.com
Financial year-end: December
Ticker: 600612
Stock exchange: Shanghai Stock Exchange

Industry Profiles
Table 11: Lao Feng Xiang Co Ltd: Annual Financial Ratios
Key Ratios 2014 2015 2016 2017 2018

Growth Ratios
Sales Growth % -0.45 8.76 -2.10 13.86 9.98
Operating Income Growth % 20.14 9.72 2.85 11.79 10.01
EBITDA Growth % 19.60 9.51 2.90 12.86 9.84
Net Income Growth % 5.62 18.88 -5.36 7.44 6.02
EPS Growth % 3.78 17.36 -4.61 7.55 5.91
Working Capital Growth % 20.98 25.41 15.24 15.52 31.64
Equity Ratios
EPS (Earnings per Share) CNY 1.80 2.14 2.02 2.17 2.30
Dividend per Share CNY 0.90 0.96 1.00 1.05 1.10
Book Value per Share CNY 7.54 8.68 9.68 10.72 11.84
Gross Margin % 8.35 8.00 8.66 8.10 8.01
Profit Markup % 9.11 8.69 9.48 8.82 8.70
Return on Equity % 23.82 24.60 20.89 20.26 19.46
Return on Assets % 8.99 9.66 8.26 8.27 8.33
Liquidity Ratios
Leverage Ratios
Debt to Equity Ratio Absolute 0.30 0.25 0.33
Net Debt to Equity Absolute -0.43 -0.42 0.30 0.17 0.32
Debt to Capital Ratio Absolute 0.23 0.20 0.25
Efficiency Ratios

Industry Profiles
Table 12: Lao Feng Xiang Co Ltd: Key Employees

Fuliang Zhou Director Executive Board
Fuliang Zhou Secretary Executive Board
Gangchang Li Deputy General Manager Senior Management
Hua Huang Chief Financial Officer Executive Board
Hua Huang Director Executive Board
Hua Huang General Manager Executive Board
Lihua Shi Chairman Executive Board
Longji You Director Non Executive Board
Qixiu Zhang Director Non Executive Board
Shengkang Zhang Deputy General Manager Senior Management
Yongzhong Wang Deputy General Manager Senior Management
Zhihong Xin Deputy General Manager Senior Management

Industry Profiles
8.3. Gitanjali Gems Ltd
Gitanjali Gems Limited (Gitanjali) is a diamond and jewelry company. The company’s activities include sourcing,
cutting and polishing rough diamonds and distributing the polished diamonds. It also offers loose diamonds, diamond
studded jewelry and other stone-studded jewelry, watches, spiritual artifacts and accessories. Gitanjali markets these
products under the brands of Nakshatra, Gili, Asmi, Sangini, D’Damas, Giantti, Greggio and Morelatto. It also offers
apparels under the Gili and Diya brands. Apart from these, Gitanjali is involved in retailing and real estate business.
The company operations spread across India, the US, the UK, Thailand, Belgium, China, Japan, Italy, South East Asia
and the Middle East. Gitanjali is headquartered in Mumbai, Maharashtra, India.
The company reported revenues of (Rupee) INR165,728.7 million for the fiscal year ended March 2017 (FY2017), an
increase of 18.5% over FY2016. In FY2017, the company’s operating margin was 3.6%, compared to an operating
margin of 4.7% in FY2016. In FY2017, the company recorded a net margin of 1%, compared to a net margin of 0.7% in
FY2016.The company reported revenues of INR37,887.0 million for the second quarter ended September 2017, a
decrease of 32.5% over the previous quarter.
8.3.2. Key Facts
Table 13: Gitanjali Gems Ltd: key facts
Laxmi Towers Office No.A-1, A-Wing, 7th Floor Bandra Kurla Complex, Bandra
Head office:
(East), Mumbai, Maharashtra, India
Website: www.gitanjaligroup.com
Gitanjali Gems Limited (Gitanjali) manufactures and sells diamonds and jewelry. It also undertakes other businesses
such as retail and lifestyle and infrastructure businesses. The company has operations in the US, the UK, Thailand,
Belgium, China, Japan, Italy, and countries in South East Asia and the Middle East. The company has over 3,010 points
of sale (PoS) in 200 cities across India. It also operates 643 shop in shop stores, 391 franchise stores and 259 company
owned stores.
Gitanjali operates through three reportable business segments: Jewelry Business, Diamond Business, and Others.
The company’s Jewelry Business segment manufactures gold and diamond studded jewelry. It also offers silver,
platinum and stainless steel jewelries, studded with diamond and other gems. Gitanjali offers jewelry of various style
and design including ethnic and casual designs, contemporary, Indian traditional and classic. The company sells these
products to merchant jewelers under its own store brands and to retail chains. Its export processing unit is located at
SEEPZ - Andheri, Mumbai and other domestic manufacturing units are located at Goregaon and Andheri in Mumbai,
Surat in Gujarat, Rajiv Gems Park in Hyderabad and Manikanchan SEZ in Kolkata. In FY2016, the Jewelry Business
segment reported revenue of INR112,514.5 million, accounting for 77.8% of the company’s total revenue.
The Diamond Business segment of the company is involved in manufacturing and exporting of cut and polished
diamonds. It markets processed diamonds in loose form to merchant jewelers and jewelry houses across the world. Its
diamond cutting and polishing facilities are located in Mumbai and Hyderabad, India. The segment also exports
diamond jewelry to the US, Hong Kong, Japan, China, Thailand and countries in the Middle East. In FY2016, the
Diamond Business segment reported revenue of INR31,992.7 million, accounting for 22.1% of the company’s net
sales.

Industry Profiles
The company, through the Others segment, offers products such as watches and other lifestyle accessories under
Greggio, Morelatto, Sector, Just Cavali, Marvin, Everlast, Umbro, Miss Sixty and Roberto Cavali brands. In FY2016, the
other segment reported revenue of INR109.5 million, accounting for 0.1% of the company's net sales.
Gitanjali also has operations in retail and lifestyle and infrastructure businesses. Under retail and lifestyle business,
the company planned to launch its own umbrella branded retail business Gitanjali Lifestyle by offering 40 brands of
both own and franchised and soon it also intends to soon branded jewelry in its stores. In this view, Gitanjali plans to
acquire three retail store chains in the US and also signed an agreement with niche global designer brands to retail
with its own brands.
Under Infrastructure business, the company manages real estate projects by constructing fine and luxury homes for its
customers. The company has economic zone unit at Rajiv Gems Park in Hyderabad.

Industry Profiles
Table 14: Gitanjali Gems Ltd: Key Employees

Alpa Talsania Head PPC, GOLD and CSD Senior Management
Dhanesh Sheth Director Non Executive Board
Kapil Khandelwal President Banking and Finance Senior Management
Mahendra Bhandare Group Vice President - Human Resources Senior Management
Mehul C. Choksi Chairman Executive Board
Mehul C. Choksi Managing Director Executive Board
Nazura Ajaney Director Non Executive Board
Chief Executive Officer Modern Trade and
Pankaj Shah Senior Management
COCO Business
S. Krishnan Director Non Executive Board
Sanjeev Agarwal President Senior Management
Saurav Bhattacharya President Senior Management
Simmi Sulke Vice President Media Senior Management
Sunil Varma Head International Business Senior Management
Suresh Kayakool Vice President Supply Chain Senior Management

Industry Profiles
8.4. Tiffany & Co
Tiffany & Co (Tiffany) is a holding company, specialized in designing, manufacturing and selling fine jewelry through its
principal subsidiary, Tiffany and Company. The company is a provider of engagement jewelry, diamond engagement
rings for brides and grooms. It also offers jewelry made of platinum, diamond, gold and other precious metal. Apart
from these, Tiffany sells timepieces, leather goods, sterling silver goods (other than jewelry), crystal, stationery,
fragrances and accessories. The company markets its products through multi channels including retail outlets, online
shop, catalogs, and independent distributors. Tiffany offers its products across Asia-Pacific, Americas, Europe and the
Middle-East. Tiffany is headquartered in New York, the US.
The company reported revenues of (US Dollars) US$4,442.1 million for the fiscal year ended January 2019 (FY2019), an
increase of 6.5% over FY2018. In FY2019, the company’s operating margin was 17.8%, compared to an operating
margin of 19.4% in FY2018. In FY2019, the company recorded a net margin of 13.2%, compared to a net margin of
8.9% in FY2018.The company reported revenues of US$1,003.1 million for the first quarter ended April 2019, a
decrease of 24% over the previous quarter.
8.4.2. Key Facts
Table 15: Tiffany & Co: key facts
Head office: 727 Fifth AvenueNew York, New York, United States
Website: www.tiffany.com
Financial year-end: January
Ticker: TIF
Stock exchange: New York Stock Exchange
Tiffany & Co (Tiffany) designs and manufactures jewelry. The company also sells eyewear, timepieces, leather goods,
sterling silver goods, fragrances, stationery and other accessories.
The company classified its business operations under four reportable segments: Americas, Asia-Pacific, Japan and
Europe.
It also classifies operations into into four product categories: Jewelry collections, Engagement jewelry, Designer
jewelry and others.
The company operates 321 stores across Americas, Asia-Pacific, Japan, Europe, and in Emerging Markets. The
company sells and distributes its products in more than 20 countries worldwide.

Industry Profiles
Table 16: Tiffany & Co: Annual Financial Ratios
Key Ratios 2015 2016 2017 2018 2019

Growth Ratios
Sales Growth % 5.43 -3.41 -2.51 4.20 6.53
Operating Income Growth % 162.10 -4.71 -5.12 12.23 -2.36
EBITDA Growth % 162.10 -4.71 -5.12 12.23 -2.36
Net Income Growth % 166.96 -4.19 -3.84 -17.04 58.44
EPS Growth % 3.48 -14.46 -0.76 15.74 11.93
Working Capital Growth % 12.61 -2.54 5.84 10.80 -6.66
Equity Ratios
EPS (Earnings per Share) USD 3.73 3.59 3.57 4.13 4.62
Dividend per Share USD 1.48 1.58 1.75 1.95 2.15
Book Value per Share USD 21.93 22.96 24.20 25.97 25.66
Gross Margin % 59.70 60.69 62.23 62.61 63.28
Profit Markup % 148.14 154.39 164.76 167.45 172.34
Return on Equity % 17.08 15.93 14.80 11.45 18.81
Return on Assets % 9.75 9.01 8.73 7.01 10.86
Liquidity Ratios
Leverage Ratios
Efficiency Ratios

Industry Profiles
Table 17: Tiffany & Co: Key Employees

Abby F. Kohnstamm Director Non Executive Board
Alessandro Bogliolo Chief Executive Officer Executive Board
Alessandro Bogliolo Director Executive Board
Andrea C. Davey Senior Vice President Global Marketing Senior Management
Senior Vice President Diamond and Jewelry
Andrew W. Hart Senior Management
Supply
Annie Young Scrivner Director Non Executive Board
Fransesco Trapani Director Non Executive Board
Gretchen Koback-Pursel Chief Human Resources Officer Senior Management
Gretchen Koback-Pursel Senior Vice President Senior Management
James Lillie Director Non Executive Board
Jane Hertzmark Hudis Director Non Executive Board
Leigh M. Harlan General Counsel Senior Management
Leigh M. Harlan Secretary Senior Management
Leigh M. Harlan Senior Vice President Senior Management
Mark Erceg Chief Financial Officer Senior Management
Mark Erceg Executive Vice President Senior Management
Pamela H. Cloud Chief Merchandising Officer Senior Management
Pamela H. Cloud Senior Vice President Senior Management
Philippe Galtie Executive Vice President Global sales Senior Management
Robert S. Singer Director Non Executive Board
Roger N. Farah Chairman Executive Board
Rose Marie Bravo Director Non Executive Board
William A. Shutzer Director Non Executive Board

Industry Profiles
8.5. Kuwayama Corporation
Kuwayama Corporation (Kuwayama) is a manufacturer and wholesale retailer of jewelry products. The company
engaged in designing, manufacturing, processing and marketing of jewelry items such as necklaces, pendants, rings,
bracelets and ear rings under the brand name, EmbrasseR purest. Kuwayama has manufacturing facilities in Japan,
Thailand and China. It operates across various geographical regions including Japan, Belgium, Thailand and China. The
company is headquartered in Tokyo, Japan.
The company reported revenues of (Yen) JPY32,998.9 million for the fiscal year ended March 2018 (FY2018), a
decrease of 11.8% over FY2017. In FY2018, the company’s operating margin was 2.4%, compared to an operating
margin of 1.5% in FY2017. In FY2018, the company recorded a net margin of 1.9%, compared to a net margin of 1.6%
in FY2017.The company reported revenues of JPY7,400.9 million for the second quarter ended September 2018, an
increase of 6.5% over the previous quarter.
8.5.2. Key Facts
Table 18: Kuwayama Corporation: key facts
Head office: 2-23-21 Higashi Ueno, Taito-Ku, Tokyo, Japan

Telephone: 81338357231
Fax: 81338396024
Website: www.kuwayama.co.jp
Ticker: 7889
Stock exchange: Tokyo Stock Exchange
Kuwayama Corporation (Kuwayama) deals with the manufacturing and distribution various jewelries. It operates
across various regions such as Japan, Belgium, Thailand and China. The company has four production bases across
including Toyama factory (Japan), Bangkok factory (Thailand), Wuxi factory(China) and Guangzhou factory(China).
The company's products include necklaces, pendants, rings, bracelets and ear rings. Kuwayama is also engaged in
planning and design, production, sales and after sales services for its in-house, and OEM (original equipment
manufacturer) and ODM (original design manufacturer) operations.
Kuwayama's key jewelry collections include CNC Ring, Reprise, Vetelueur, Harmony, Pearl Jewelry and Dolce Festa.
The company offers its products under various brands such as Marea Rich, Embrasser Purest and D+
The company's subsidiaries include the following: NJ Corporation, Brilliance International Japan Limited, Clair Co., Ltd.,
K.C.D Corporation, ATELIER G.S.P. Ltd., Christy Gem Co. Ltd, and among others.
NJ Corporation is engaged in jewelry wholesale and sale of jewelry to department stores.
Brilliance International Japan Limited is involved in manufacturing, assembling, importing and selling jewelry.
Clair is engaged in importing and selling jewelry.

Industry Profiles
K.C.D Corporation is involved in jewelry and accessory designing and sales within the fashion business interface.
ATELIER is engaged in assembly and repair of jewelry.

Industry Profiles
Table 19: Kuwayama Corporation: Annual Financial Ratios
Key Ratios 2014 2015 2016 2017 2018

Growth Ratios
Sales Growth % 9.05 3.65 3.68 -2.86 -11.75
Operating Income Growth % 65.88 3.03 -26.74 -47.12 46.92
EBITDA Growth % 52.58 3.65 -23.50 -38.24 29.08
Net Income Growth % 14.63 17.25 -45.35 14.20 7.11
EPS Growth % 17.50 8.58 -44.33 73.77 -26.38
Working Capital Growth % -15.73 35.67 24.02 34.14 7.32
Equity Ratios
EPS (Earnings per Share) JPY 79.57 93.30 50.99 58.23 62.37
Dividend per Share JPY 18.00 18.00 18.00 18.00 18.00
Book Value per Share JPY 1432.88 1549.33 1557.88 1554.73 1621.71
Gross Margin % 27.30 27.97 25.65 26.57 27.59
Profit Markup % 37.54 38.84 34.51 36.19 38.10
Return on Equity % 5.55 6.02 3.27 3.75 3.85
Return on Assets % 2.92 3.25 1.66 1.90 2.10
Liquidity Ratios
Leverage Ratios
Efficiency Ratios

Industry Profiles
Table 20: Kuwayama Corporation: Key Employees

Hitoshi Saeki Director Non Executive Board
Isao Hori Director Non Executive Board
Koichi Uehira Outside Director Non Executive Board
Nobuo Aihara Vice Chairman Non Executive Board
Noriko Harasaki Director Non Executive Board
Shigeru Matsuura Director Non Executive Board
Takahiro Kuwayama Chief Executive Officer Executive Board
Takahiro Kuwayama Director Executive Board
Takahiro Kuwayama President Executive Board
Yukihiro Kuwayama Chairman Executive Board

Industry Profiles
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MarketLine Industry Profile

Jewelry & Watches in Asia-Pacific

Reference Code: 0200-2417

Publication Date: January 2020

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 1

1.1. Market value

1.2. Market value forecast

1.3. Category segmentation

1.4. Geography segmentation

1.5. Market rivalry

1.6. Competitive Landscape

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 2

1.1. Market value ................................................................................................................................. 2

1.2. Market value forecast ...................................................................................................................2

1.3. Category segmentation ................................................................................................................2

1.4. Geography segmentation .............................................................................................................2

1.5. Market rivalry ................................................................................................................................ 2

1.6. Competitive Landscape ................................................................................................................2

2.1. Market definition ........................................................................................................................... 7

2.2. Market analysis ............................................................................................................................ 7

3.1. Market value ................................................................................................................................. 9

4.1. Category segmentation ..............................................................................................................10

4.2. Geography segmentation ...........................................................................................................11

4.3. Market distribution ......................................................................................................................12

5.1. Market value forecast .................................................................................................................13

6. Five Forces Analysis 14

6.1. Summary .................................................................................................................................... 14

6.2. Buyer power ............................................................................................................................... 16

6.3. Supplier power ........................................................................................................................... 18

6.4. New entrants .............................................................................................................................. 20

6.5. Threat of substitutes ...................................................................................................................22

6.6. Degree of rivalry ......................................................................................................................... 23

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 3

7.1. Who are the leading players?.....................................................................................................24

7.2. What are the strengths of leading players? ................................................................................24

7.4. What strategies do leading players follow? ................................................................................25

8.1. Chow Tai Fook Jewellery Group Limited....................................................................................26

8.2. Lao Feng Xiang Co Ltd ..............................................................................................................31

8.3. Gitanjali Gems Ltd ......................................................................................................................34

8.4. Tiffany & Co................................................................................................................................ 37

8.5. Kuwayama Corporation ..............................................................................................................40

About MarketLine .................................................................................................................................... 44

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 4

Table 6: Chow Tai Fook Jewellery Group Limited: key facts 26

Table 8: Chow Tai Fook Jewellery Group Limited: Key Employees 29

Table 10: Lao Feng Xiang Co Ltd: key facts 31

Table 11: Lao Feng Xiang Co Ltd: Annual Financial Ratios 32

Table 12: Lao Feng Xiang Co Ltd: Key Employees 33

Table 13: Gitanjali Gems Ltd: key facts 34

Table 14: Gitanjali Gems Ltd: Key Employees 36

Table 15: Tiffany & Co: key facts 37

Table 16: Tiffany & Co: Annual Financial Ratios 38

Table 17: Tiffany & Co: Key Employees 39

Table 18: Kuwayama Corporation: key facts 40

Table 19: Kuwayama Corporation: Annual Financial Ratios 42

Table 20: Kuwayama Corporation: Key Employees 43

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 5

© MARKETLINE THIS PROFILE IS A LICENSED PRODUCT AND IS NOT TO BE PHOTOCOPIED Page | 6