JewellWorld.com

Online Jewelry Shopping in China

History May 2000 Founded as an owned subsidiary of Luk Fook Holdings Ltd.

First established to provide B2B platform ONLY for suppliers.

Initial Success and Praise lead to its entry into B2C market.

December 2002 Section for general public to purchase jewelry in gold, karat, platinum and silver.

Product Price Range Hundred to Thousand Hong Kong dollars.

Main Focus Lower priced products and younger generation of audience.

Countries Canada, Australia , United Kingdom and United States.

Formulation of the Idea Marketing Manager : Joseph Lee Considered expansion of company’s

business in a saturated Hong Kong market.

Met with Marketing Director: Derek King Responsible for Hong Kong and mainland Chinese jewelry markets’ development.

Two major topics:a) Expansion of Online Shopping Strategy into B2C area in mainland

China Whether to move into B2C area fully or wait & analyze.

b) Segmentation to be employed to move into B2C market.

Target audience was another concern.

Luk Fook Holdings (INTL) Ltd.

Established in 1991 and listed on the Hong Kong Stock Exchange in May 1997.

Manufacturing and distribution of its product, including procurement, logistics , management , and marketing.

Three subsidiaries: a) Luk Fook Jewelleryb) IceGc) Jewellworld.com

Target audience: Luk Fook Jewellery - Mature customers aged 35 years and older IceG - Young female white-collar workers

Products in pure gold, karat gold, gems, platinum, jade ad diamonds.

Factories: Hong Kong and mainland China.

Retail Stores: Hong Kong, Macau and Canada and expansion Chinese mainland.

The Macro Environment1] The Chinese Economic Environment in 2004

Open Market Policy’ Introduced by President Deng Xiao Ping in 1978.

World Bank statistics a) Annual growth of GDP in 2003: 9.1 %

b) Mainland’s GDP in 2004: Seventh in the world.

Jewelry considered as a value reserve and a luxury product Immense popularity among consumers.

Average spending on jewelry remained at a high level over past few years.

The Macro Environment1] The Hong Kong Consumer Market After 1997: A period of deflation

Purchasing power of citizens dropped Sales of jewelry was badly affected

Est. Number of Mainland visitors: Year 2003: 8.5 million (54.9 % of Hong Kong tourist arrivals)

Introduction of ‘visa free’ individual travel.

Year 2003: Mainland visitors spent an avg. of US $723/visit. (64% of total expenditure of visitors to Hong Kong)

Est. purchase of jewelry in retail stores: HK $3,000 (US $385). Jewelry Most popular item Shopping Expenditure:

a) 27.8% (HK $8.8 billion) Garmentsb) 17.7% Jewelryc) 9.9% Watches