The Prospect of Tiffany’s Chinese Market Is Grim

The film “Tiffany’s Breakfast” enables the jewelry queen to become famous around the world. As Tiffany’s fanatic admirer, Audrey Hepburn made Tiffany the embodiment of beauty and love. Many people said Tiffany needs to be saved by Hepburn again. In recent years, compared with other luxurious jewelry brands, Tiffany is evidently not as popular as other jewelry giants in China. The third quarter net profit fell 30%. Under the influence of this bad news, Tiffany’s share price plunged 10%. Just like its blue signature, except for its good image of love, beauty, romance and dreams, this blue seems to more represent its melancholy. After the financial crisis of 2008, Tiffany has also ushered in its spring. The first half of 2010, the growth in Asia-Pacific region reached more than 27%. However, when other luxury brands have recovery growth, Tiffany has experienced a cold winter. The total turnover steadily declines. As we know, it is one of the largest jewelry makers, all of its products ranging from opal beads to earring display are all made delicately and meticulously. We can see from the third quarter earnings this year, the sales growth in the American region receives 38.6 million; while 19 million in Asia-Pacific region. Different from other European brands, tiffany’s home base is in the United States, therefore, the sales in United States market occupies more or less half of Tiffany. Unfortunately, 3% growth rate is much less than that of expectation. In second quarter, it declines 1%, which shocks lots of people. The total volume in United States even drops 9%. Tiffany’s group contributes its bad performance to higher tax rate, continued weakness in the economy, high cost of precious metals and diamonds. But this seems not to be convincing. At the time that many luxury brands enter in China, in 2001, Tiffany is also aware of it. In 2007, it sets up wholly-owned foreign subsidiary with independent teams. The CEO also claimed to set up 25 to 30 chain stores. Two years later, Tiffany’s stores in China only increase 10, 22 in total. While its rival Cartier has 224 shops in China, 10 times over Tiffany. Other brands have aggressively entered Chinese jewelry market, the marketing and selling channels remain traditional and old. Only in the aspect of wedding jewelry, Tiffany has certain reputation. From the product point, tiffany adheres to its traditional and classic policy, not introduce products for a particular market or region and also not launch a high-end custom service. While other brands take great efforts to cater to Chinese market, this seems much more different. But, Tiffany may also begin to realize its problem.