HONG KONG: Chow Sang Sang, a leading jewelry retailer and manufacturer in the Greater China region, plans to spend some HK$50 million to open 25 additional outlets on the mainland this year.

Director and Deputy General Manager Winston Chow said the major expansion is underpinned by the group's recognition of healthy growth prospects on the mainland and the resilience of its economy even in the face of a global recession.

He said the mainland market will be an important growth engine for the group over the next two years.

"We will go full speed ahead in our push for expansion on the mainland," Chow told China Daily.

Chow Sang Sang's revenue on the mainland rose 47 percent to HK$1.5 billion in 2008, accounting for 28 percent of the company's total revenue from jewelry retail sales.

In contrast, sales in Hong Kong and Macao, which account for a combined 70 percent of total revenue, grew at a slower pace.

Sales in Hong Kong and Macao last year expanded 25 percent to HK$3.78 billion.

Between 25 to 30 percent of revenue in Hong Kong was generated from sales to visitors from the mainland.

"Over the next three to four years, the proportion of sales contribution from Hong Kong and the mainland will probably be half and half," he added.

Using Hong Kong as the base for its operations for more than 60 years now, Chow Sang Sang has also embarked on a steady expansion of its operations on the mainland in recent years. The company currently operates 125 retail shops in 45 different cities on the mainland, aside from 47 outlets in Hong Kong, 21 in Taiwan and two in Macao.

Chow said the mainland market offers plenty of potential and room for growth.

Over the past few years, average same-store sales growth was steady at the 20 to 30 percent range.

"Our expansion on the mainland is still at an early stage and we recognize that there is much room for further growth," Chow said.

He likened the mainland retail market to a teenager who requires proper training and grooming to foster its maturity and full development.

"We will try to avoid making risky investments, while focusing more on fast-growing segments of the market," Chow said.

"We always say Chow Sang Sang is now a Greater China company and it is irresistible for us to pursue this development route," he said.

In a bid to further expand its penetration of the high-end jewelry market in Hong Kong, the company recently opened its third flagship store, in Central. The other two are in the tourist district of Tsimshatsui, Hong Kong, and Sanlitun in downtown Beijing.

(HK Edition 05/01/2009 page2)