Jewelry companies look to cash in on surging gold prices(2)

Past meets present

Lao Feng Xiang is one of China's oldest jewelry brands and its history can be traced back to 1848 in the Qing Dynasty (1644-1911). However, it is acutely aware that to continue prospering it must cater to the needs of a younger generation while keeping its older customers happy.

"Young people prefer products with meaning," said Lu Jing, marketing manager with Shanghai Laofengxiang Co. "They care about flowers, love and life, while the older generation cares more about blessings, safety, health and wealth."

As a time-honored brand with a long history, Lao Feng Xiang knows that the secret to staying competitive is maintaining the quality of traditional craftsmanship and culture while introducing innovative products and techniques, Lu said.

In Chinese culture, feng, the phoenix, is the king of all flying creatures, and xiang means auspicious. The brand's name denotes good luck and it is a fitting emblem for a brand perched at the top of the domestic jewelry market.

According to Lu, as the gold market has expanded across the world, gold-making techniques have undergone development and innovation, and have offered new opportunities for retailers to explore.

Lao Feng Xiang has developed two new store concepts to add to its traditional jewelry shops.

One is Cang Bao Jin, or gold treasure, and the other is Feng Xiang Xi Shi, which celebrates a variety of life events.

Cang Bao Jin stores are decorated in a more traditional and elegant way with a focus on Chinese elements, a concept which is reflected in the products on sale.

"In our Cang Bao Jin-themed stores, the interior decorations are in the colors of black and yellow, which immediately sets them apart from our regular stores," said Cao Cong, a manager at Lao Feng Xiang Jewelry in Shanghai's Xuhui district.

Gold consumers are usually older people, but since the launch of the Cang Bao Jin products many young people, including women aged in their 20s, are buying gold fashion accessories, Cao said.

The Feng Xiang Xi Shi stores are based on special consumption scenarios, Lu said.

Launched last year, when the brand celebrated its 175th anniversary, the Feng Xiang Xi Shi-themed stores look to tap into young generations' need to celebrate important life moments including marriages, childbirths, promotions, housewarmings, birthdays and family reunions, with something "meaningful and memorable".

Lao Feng Xiang can have three stores in a single shopping center that cater to different consumer tastes, Lu said.

"Consumers, especially the young generations are fond of traditional Chinese culture. Therefore, from our perspective, we try to impress them with tradition and culture," Lu said.

Thanks to sticking to both inheritance and innovation, the company has seen its sales revenue snowball from 710 million in 2001 to 71.4 billion yuan ($9.85 billion) last year.

"For more than two decades we have maintained double-digit annual revenue growth, coupled with our store numbers soaring from about 230 branches in 2001 to up to 6,000 worldwide," Lu said.