Pandora, the world’s largest jewelry maker by volume, has an ambitious goal of tripling its revenue in China. But the market is very competitive and the strategic plan proposed by the company does not present any particular attraction. On February 9, the Danish jewelry brand’s annual report for 2021 matched previous forecasts, illustrating that its performance in the Chinese market had been significantly affected by COVID-19.
He points out that a large number of stores were forcibly closed, stating that “the share of Pandora stores temporarily closed due to COVID-19 was 30% in the first quarter, 15% in the second quarter, 5% in the third quarter. and 3% in the fourth quarter. “Beijing’s COVID-related restrictions have also had a direct impact on store traffic, with footfall down by up to 70% compared to 2019. With China’s strict pandemic policies still in place, Daily Jing asks: Can this company, known for its unique collection of charms and bracelets, realize its ambitions in China?
Pandora entered China around 2010 through cooperative distribution, but in 2015 it switched to self-managed stores. Currently, it has 214 stores in China and employs around 1,200 local employees. He has a loyal fan base, with 139,000 followers on Weibo and 54.5k on Xiaohongshu.
The overall business strategy of the company, Phoenix, comprises four pillars built on brand promise, significant growth potential and the ability to attract new consumers. Last year, its US and China markets positioned themselves as its two main markets, with long-term ambitions to double its revenue in the US and triple it in China, using 2019 as a benchmark.
The two markets are naturally very different and the responses of the respective markets have been quite varied. Throughout 2021, compared to the strong performance of the US market, China saw only 5% growth. Despite a significant slowdown in growth in China, management has optimistic expectations for the market.
Johan Melchior, Director of External Communications, said: “Pandora saw some positive signs in the fourth quarter, such as being ranked the biggest fashion jewelry brand on Tmall for the first time since entering China. This provides comfort for the journey ahead. So while the future looks bright, Beijing’s tight controls appear to have set an unknown start date for the strategy’s implementation.
Industry experts explained that other companies are not resting on their laurels. Sky Canaves, senior analyst at Insider Intelligence, said: “As Pandora delays its plans to invest in brand repositioning in China, other brands that are doing well, such as Tiffany & Co. and Swarovski, will continue to double, especially on digital.”
Still, Pandora has a mission, and at the heart of it is personalization – a key strength as it builds direct relationships with consumers. At the end of 2021, the company launched a new store concept called “Evoke” to support more traffic and conversions. Guangzhou’s Grandview Mall was among the first to test the pilot.
At the core of Pandora’s mission is personalization – one of its key strengths in building direct relationships with Chinese consumers.
“The company is focused on providing a personalized shopping experience while presenting jewelry in new and inspiring ways. Evoke will make shopping more intuitive and improve speed of service, allowing customers to explore, find and easy to try out products,” Melchior added. And while that intention is forward-thinking, the question remains: will it help Pandora stand out from its strong competitors and attract customers, especially customers? of Generation Z?
“Every brand in China sees Gen Z as a key driver,” Canaves explained. “This raises the question of how Pandora can differentiate itself. Consumers may prefer to save and splurge on brands that have stronger heritage and name recognition than choose what is perceived as a mainstream product. Pandora needs to think about how its Guangzhou concept store can be adapted to meet the needs of Chinese consumers to attract better conversions.
Yet this commitment to China is actually a two-phase plan: the first part will solidify the brand by establishing the core proposition of collection, affordability and self-expression, while the second phase will focus on the key element of people. Although the second phase is still largely in the ideation stage, the brand should have learned a lesson from the international brand’s missteps in China last year as well as the misguided partnership with its outrageous ambassador, actor Zhang. Zhehan.
Either way, Chinese customers expect to see more concrete results through concrete initiatives, such as signing popular young actress Song Zuer as an ambassador and teaming up with Fun Factory for its Chinese New Year.
As expected, Pandora’s 2021 performance in China has not been outstanding, but the sector remains a high priority. Thanks to the government’s constant zero-tolerance policy, the restrictions have posed a serious challenge to the brand’s aspirations. And while the announcement of a new partnership with Marvel has sparked global interest, no one knows how the Chinese market and its consumers will react to the collection.
“In theory, Pandora’s core charm bracelet offering should appeal to Chinese Gen Z, as these products are highly customizable and reflect the style of the wearer,” Canaves added. “In practice, that message doesn’t seem to resonate very strongly as sales continue to decline amid growing competition.”
So while many say Pandora deserves a place in the market, the ultimate judge will be China’s local customers.