YOW YONG HUI: What is ‘Reflections of Siam’ all about?

KENT WONG: The concept itself is not the most important. What matters is the experience. We are targeting high-end customers. And we use these collections to showcase what Chow Tai Fook is able to do with product and experience.  The product is the hero, and we build an experience around it. The annual collection and auction is an opportunity to gather the who’s who of society – the ultimate goal of these collections is to do VIP gatherings. There are only limited seats, and they need to compete for these seats. Only the crème de la crème can attend and it’s by invitation only.

YONG HUI: Why do people trust Chow Tai Fook so much?

KENT: Chow Tai Fook is 85-years old. And for the past 85 years, Chow Tai Fook has led the industry in many areas. We were the first in the 1960s to use pure gold to make jewellery. Now, that has become the industry standard. In 1990, we were also the first to implement a fixed price policy for diamond jewellery. Before that, because of tough competition, many industry players marked up their prices in order to give big discounts to their customers. However, doing that loses the confidence of customers because they don’t know the real market value of what you are selling. And we knew back then there is no future for this kind of business. At Chow Tai Fook, we promise our customers a fair price and great quality. All they have to do is enjoy the shopping experience and craftsmanship. Trust should be built up day-by-day. You can’t build the great wall in a day.

YONG HUI: How do mainland customers differ from those in South East Asia?

KENT: In China, given our thousands of years of history, we have special emotions toward gold jewellery because it represents royalty, fortune, and good luck. We also believe that buying jewellery is a form of wealth accumulation, like saving money. This will not change because this is in our culture. However, the Chinese are now accepting new kinds of jewellery products such as gemsets and diamonds, especially in Tier 1 and 2 cities. The reason for this gradual popularisation in mainland China is the group born in the 1980s and 1990s. Through social media, new kinds of jewellery have found their place amongst the youth. They believe that diamonds can elevate and indicate their social status. Also, the young, and middle class, now like to spend on something innovative to express their personality and individuality. Back in the 1960s, Hong Kong was already a jewellery hub. I, myself, have a lot of customers from Singapore, Indonesia, and Thailand who fly over to shop. They like gemsets such as ruby sapphire, cassia, and star sapphire. This is something different from consumers from mainland China.

Camera eats first.

ALAN CHAN: Also, I have to mention that China, ten years ago, did not have much access to information. Now, times have changed a lot. Same goes for the South East Asian countries. And this has helped the fashion industries a lot.

KENT: Yes. In China, 70 to 80 per cent of people now have mobile phones, and they don’t just use it to communicate. They use WeChat and so forth to share things with each other. And whenever you give people the opportunity to find something interesting, they will take a photo and share it. Like whenever you go to a restaurant, before you eat…

ALAN: Camera eats first.

KENT: And the buying habits of people of course, have been greatly affected by these trends.

ALAN: Yes, so even though ecommerce may not be that big a share of total business at the moment, it is a still great promotional channel. And with jewellery becoming an accessory, the online potential for jewellery is huge.

KENT: And let me tell you this – one of our ecommerce channels, T-Mall, has about 120,000 unique visitors every day – just on one platform. Compare that with my brick-and-mortar stores – every day, we see about 600 to 1,000 visitors a day per store. That’s a huge gap. Right now, about 1 per cent of our total sales in China come from ecommerce. And just in this year-to-date period, we experienced a 60 per cent growth in ecommerce sales in China. In the next 5 years, we expect ecommerce to contribute about 5 per cent of our total sales in China.

Brick and mortar stores will still be important no matter what.

YONG HUI: So will there still be a need for brick-and-mortar stores in the future?

KENT: Of course. Brick-and-mortar stores will still be important no matter what.

ALAN: Exactly, for jewellery, it is very different from a commodity. If you buy a can of soft drink, you can buy it online. For jewellery, you have to experience it. That’s why Kent has a concept called “O-to-O” – online to offline.

KENT: ‘O-O’ means the customer would visit our web store, and we then attract them to visit our stores for the experience. You see, every piece of jewellery has its own design; every piece of gemstone has its unique colour, which makes every piece exclusive. No two pieces are the same. And the only way to experience that is to come to our stores – that is the magic of jewellery.

YONG HUI: How do you think this ‘crackdown’ on gifting will affect the high-end jewellery market?

There was a knowing chuckle from all parties.

KENT: Well, I think you are right – people do worry about China’s anti-corruption stance. But my feeling is that it has affected luxury segments such as expensive Swiss-made watches because some people use them to show off. However, jewellery is more personal. Most of my customers are end-users, they are collectors; so for us, no, the effect is not significant.

Part of our plan is to follow the Chinese people’s footprints.

YONG HUI: How are your plans to venture outside of mainland China?

KENT: We will continue to focus our attention on mainland China as it is one of the world’s fastest growing jewellery markets, especially for diamonds. Of course, at the same time, we try to learn and understand other geographies outside of China, such as South East Asia, and we should! The Chinese like to travel around the world and they shop a lot  So why don’t we follow them all over the world? That’s why we have come here to Singapore, for the first time to launch our high jewellery collection. In doing so, we are targeting the whole region. But our main focus will still be on mainland China.

ALAN: Exactly, part of our plan is to follow the Chinese people’s footprints. As China became more affluent, the Chinese started travelling. First, they went to Hong Kong. Over time, they ventured to Japan, Korea and East Asia. Now, they travel to places like Singapore, Thailand, and the region. Part of our plan is to follow their footprints.

YONG HUI: What about a store in the US?

KENT: For us, it’s not realistic; for example, to open a store in New York right now. It is possible, but you want to do it step-by-step. For example, we opened a store here in Marina Bay Sands, and most of the customers come from mainland China. We use these stores to learn; we take it a step at a time. First, we use the travelling Chinese customers as a base, and then we hope to also attract the locals to buy. Singapore will be the hub for the experience in South East Asia.

India is too far in the future for us to be talking about plans, even though it is a good market.

YONG HUI: What about India. They also have a rising middle-class. Do you think they are a different breed?

KENT: Yes, India has a huge population, and also a rising GDP, and they love gold and diamonds. However, I think, at least in the coming ten years, our focus is still on China, and other selected markets. India is too far in the future for us to be talking about plans, even though it is a good market.

YONG HUI: What is the future of jewellery making?

KENT: At the end of the day, jewellery is an art piece. Yes, now, you can make jewellery with the help of machines. But you still have to polish it, engrave it and so forth. So, on some level you have to handcraft it like a sculpture. Every piece has a story. However, these new technologies such as 3D printing do help us in the backend, in production for example. But for the customer, they will still prefer craftsmanship. Every piece is an individual art piece that cannot be replaced by machines. This is natural beauty from the earth that just can’t be replicated.

I don’t complain that my wife buys too much jewellery.

YONG HUI: What’s your personal connection with jewellery?

KENT: You see, I don’t wear jewellery but my wife has a lot.

The two men shared a knowing moment, and laughed it off.

KENT: I don’t refuse her, and I don’t complain that she buys too much jewellery.

ALAN: Jewellery is becoming an accessory for the ladies, as in handbags, shoes, and clothes. Their dream is to have a big walk-in closet. Every day, they want to open it and have unlimited options for clothes, bags, and clothes. Same for jewellery – they all want a big jewellery box so they can put on something different every day, to mix-and-match with their outfit. That’s the trend.

KENT: Exactly, and it is also a path for women. When she is 18, she will buy her first piece of jewellery. Then, they gradually accumulate them throughout their lives.

Jewellery is a lifetime journey for the ladies.

YONG HUI: How many pieces of jewellery does a typical woman have?

KENT: We think it is increasing. In the old days, maybe they have just one very important piece for example – engagement rings or wedding bands.  They may also have a piece given to them from their parents or grandparents when they were newborns. Nowadays, they also get a piece when they graduate from university. And they get ever more from boyfriends and so forth – so, at least six or seven pieces of jewellery. Not only this. Every year on anniversaries, they get more. So jewellery is a lifetime journey for the ladies.

YONG HUI: What about men?

KENT: 90 per cent of sales are for the ladies, unfortunately.

ALAN: It is 3-to-1, from our database. 3 from the ladies and 1 from the men – but the men buy for the ladies.

KENT: Yes, men buy jewellery for the one he loves. However, from time to time, we make jewellery for men.

Alan pulls back his cuff to show off his G-Dragon bracelet.

ALAN: This is the first Chow Tai Fook jewellery I wear.

KENT: This piece is very hot today. We joined hands with G-Dragon, the leader of the popular Korean group Big Bang, and the piece was designed by him.

YONG HUI: It’s unisex.

KENT: Yes, just for Alan.

The group cracks up, in a flurry of Cantonese I can barely make out. I’m Cantonese but let’s not go there.

YONG HUI: How much is it?

KENT: The basic one is about US$100, and it goes up to about US$100,000.

ALAN: This is to target different groups of fans because we have different tiers of customers. We understand there are older people who also like G-Dragon, and who may like to buy the same thing, but a more exclusive version. There are only eight of the US$100,000 pieces. The first customer for it was a middle-aged man – 50 plus, who is a big fan of Big Bang. He called us even before the product was launched to reserve it.

YONG HUI: Amazing. How does Chow Tai Fook innovate?

KENT: Over the past 85 years, we focused on improving ourselves, on being innovative. And we have been so successful that we need to better ourselves. Many breakthroughs and new technologies have been adopted by us into our daily operations to keep up with the times. For example, we were the first jeweller to use digital marketing. We, in fact, set up a digital marketing team last year. These are young people using the latest technologies to invent and build applications to improve our business. We have a smart tray, for example. When customers walk into our stores, jewellery is presented on a tray. Now, with this Smart Tray, we can collect data every time the pieces are lifted off, and which pieces.

YONG HUI: When was this patented?

KENT: This year.

YONG HUI: So this is already being used in your stores?

KENT: Yes, we are testing it out in some of our stores in Hong Kong.

ALAN: This way, we have a lot of data, and we can calculate all the conversion rates. For example, a piece may have been shown to customers ten times, but has only been purchased once. We want to know why. It’s like a pyramid, so we start off with 100 pieces, only 30 have been tried on by the customer, and only 3 were sold. This gives us data to analyse.

Chow Tai Fook is not an 85-year-old man, we are a young guy.

YONG HUI: How did the company become so data-driven? It’s unusual for a company your size.

KENT: Yeah, we are. We, as a company are very dedicated to innovation and creativity. Chow Tai Fook is not an 85-year-old man, we are a young guy. We are interesting. Today, the big question for retailers is – how you can understand your demand. How can you collect customer data to understand them better? Customers will not tell you what they want directly. But we can ask our analytics because we have the data.

ALAN: You see, we are running a marathon, and we are in front. There is nobody next to us, but we need to keep pushing ourselves because there is no benchmark – we are the leader.

YONG HUI: How big is your digital marketing team?

ALAN: We call it the e-team, comprising e-marketing and e-commerce. It has over 200 people now. The teams manage the whole chain and experience. It’s not just about putting items online. We have real-time support for our customers. You can call us, you can chat with us online, and we will assist you in choosing the right pieces. There was this man who wanted to buy his engagement ring online. So our sales support team had a chat with him online, and we ultimately helped him stage a proposal to his fiancée. This kind of service is important to us. Buy online but service the customer offline – O-to-O. Sometimes, say, we want to run a campaign, and we ask ourselves, who we should target; we got more than a million members. So to make these decisions, we need data. Typically for other companies, the way they go about this is: oh we did it like this last year, so let’s do that again. But with data, it is different; data helps you make fresh and relevant decisions. But you need the tools to collect data. So, our technology team is always under pressure to come up with new tools.

We need to constantly evolve the company, to make it smart – smart marketing, smart tools, and smart people.

KENT: Yes, everybody is talking about Big Data. What is big data, how we can use it. And for us, we really try to figure out the relevant metrics so we can build the right tools. Today, our conversion rate is about 15 per cent – that is quite high. But what about the other 85 per cent who don’t buy? If we can find out why, then we can unlock the potential there. That is the next phase. We have to find out answers to that using technology. And we also look at data from other industries related to lifestyle to discern patterns. We also want to understand how people conduct their lives, what their days are like from the moment they wake up till they go to bed so that we can find the best solutions for them. We help customers fulfil their dreams.

YONG HUI: What’s next for Chow Tai Fook?

KENT: We are today a huge company – in terms of revenue, we are the top amongst jewellers. We are also the top Asian jewellery brand and ultimately, we want to be the top global brand. To do so, we need to constantly evolve the company, to make it smart – smart marketing, smart tools, and smart people. We have very talented people in the company, and over 40,000 staff. Our management is made up with people of all ages – we have young people born in the 1990s, and we have jewellery experts born in the 1960s. We put them together, and we have a chemical reaction. But no matter what, since we are a jewellery company, expertise in jewellery is constant – never changing. This is the core value of the company. But new ideas help us stay in front.

YONG HUI: Any last words?

KENT: The success of Chow Tai Fook is a reflection of the success of the whole jewellery industry.