Department stores and specialized jewelry retailers remain the leading distribution channels for jewelry in China, explained Huo of Euromonitor. "However, Internet retailing continues to increase dynamically."
Swarovski, which also sells products online through its own website, remains cautious over its online strategy because Chinese customers still prefer to visit their shops to check first-hand the volume, shape and characteristics of the pieces.
"For online purchases, we see limited growth now. Currently, less than 10 percent of our sales in China come from online channels," said Belin. However, at some point this year or next year, we will start exploring other options to team up with other online players."
With around a third of its total revenues coming from Chinese consumers, including purchases overseas done by Chinese travelers, China remains a crucial market for the brand.
Although the company refuses to disclose annual revenues, it hints that the turnover generated in China amounts to a couple of billion yuan. This year, the company expects to grow in high single digits.
Because Chinese consumers still have a preference for precious metals and stones, Swarovski decided to launch an exclusive line of fine jewelry in 2012 specifically designed for the Chinese market.
The collection of fine jewelry combined the traditional designs of the brand with the use of precious stones, producing 18-karat gold diamond swans necklaces and amethyst hearts.
"We thought that it would be a smart strategic move for us to enter that market," said Francis. "Both fashion jewelry and fine jewelry are growing at similar speeds here, which means that in the last years we have not seen fine jewelry losing ground to fashion jewelry."
Danish silver jewelry manufacturer Pandora entered the Chinese market in 2010 by signing franchise agreements with three different local partners in Harbin, Shanghai and Shenzhen.
It was only six months ago when the company changed its business strategy to be more directly involved in the stores and start investing in marketing campaigns.
"We are struggling to get the business foundation to operate across China," said Kenneth Madsen, president of Pandora Asia. "We want to grow quite fast at the moment, but we need a controlled expansion strategy."
The retailer, which had a retail network of 72 stores in 2015, plans to open 30 additional stores this year, concentrating on opening full-size commercial venues and further expanding into second-tier cities.
This year, the company will open stores in smaller cities like Chengdu, Dalian, Chongqing, Nanjing and Tianjin.
"We were very surprised by the strong demand from smaller cities and we realized we can be very successful in some of these second-tier cities," added Madsen.
Pandora, which defines itself as an accessible luxury, produces hand-finished silver jewelry pieces at competitive prices, with a focus on beads and charms with different motives to personalize the pieces.
Although Pandora does not disclose figures for individual markets, it notes that the Asia Pacific region accounted for 16 percent of the company's total revenue last year, a figure significantly higher than in 2014.
"Asia Pacific, with China being the largest market in this region, is taking a bigger and bigger share of Pandora," said Madsen. "This region is an absolute priority for us."
In 2015, Pandora recorded global annual revenues of 16.7 billion yuan. For this year, Pandora expects to reach revenues of 19 billion yuan, with the Asia Pacific region driving growth and taking a large share of the company's turnover.
The company is now examining options to team up with online stores to increase its sales in the country.
"We do not have an e-commerce platform at this point, but it is certainly a big, if not the largest, priority for us right now," added Madsen.
