Gold prices soar and plummet. Can traditional stores like Chow Tai Fook successfully transition into luxury brands?

Hot sections

Custom watchlist Data center Market data center Capital flow Simulated trading

        Client

Gold prices may rise and fall, but gold itself never loses its luster.

The moment the February Spring Festival holiday ended, Xu Yan went on a spending spree with the year-end bonus she’d received before the break.

She had previously seen online a post saying Lao Pu Gold would raise its prices at the end of February. At the time, she didn’t think it was a big deal. But then the news that international gold prices kept climbing pushed her to act—“Back then, it felt like gold was setting new highs at the drop of a hat. Every day I scrolled through Xiaohongshu and kept coming across those ‘buy early, enjoy it early’ case studies. I just couldn’t help feeling itchy to get in.”

With tens of thousands of yuan in her year-end bonus in hand, Xu Yan decided to put two pendants she’d long had her eye on into her collection. She didn’t go to a physical store. Although adding mall points might make it a bit cheaper, she had no time to join the crowds and line up. Still, one reason she placed an order quickly was that when she checked out, the store’s online flagship store had a promotion of 1000-100 yuan. The downside was that, unlike offline purchases where you can pick up immediately, online orders require waiting. After placing the order, the page showed that the products were basically all pre-orders, to be shipped by March 29.

But very quickly, her dissatisfaction about the brand’s slow shipping was overtaken by her joy at the higher prices after the increase. For an 18.6g or so silk-weaving (climbing丝) gourd pendant, she got a 10% discount when she bought it, and it came to under 30,000 yuan. Then on February 28, when the brand adjusted its pricing, this chain jumped to over 43,000 yuan. Another flower-weaving qilin “lucky bag” pendant, with a weight just under 20g, cost nearly 31,000 yuan, and after the price hike, its price also surpassed 45,000 yuan.

This round of price increases of more than 30% made Xu Yan feel like she’d come out ahead. In the following two weeks, she would check from time to time to see if it had shipped, and occasionally she would nudge customer service. Of course, the replies she got were still stock phrases like “We have too many orders; as soon as there’s stock, we’ll ship as quickly as possible.”

In mid-March, Xu Yan finally received the necklace she’d been waiting for—but the bad news came right along with it: international gold prices began adjusting. This time the direction was not upward; it was a steady slide all the way down.

When gold prices swing up and down, who is the big winner

On March 23, Black Monday, as the situation in the Middle East escalated and further crushed investor sentiment, spot gold plunged out of control. That day, after suffering another drop of more than 10% from the previous week to reach a seven-week low, spot gold set the largest single-week decline since March 1983. During the trading session, it repeatedly fell below five key round-number levels: 4500, 4400, 4300, 4200, and 4100 USD per ounce, with the lowest point reaching 4098 USD per ounce. By then, it meant that the gains since early this year had been erased.

However, over the next two days, gold regained lost ground and rebounded strongly. In the New York late trading on March 24, spot gold rose 1.47% to 4472.020 USD per ounce. COMEX gold futures rose 1.19% to 4492.30 USD per ounce.

On the morning of the 25th, spot gold continued climbing. During the session, it broke through the two major thresholds of 4500 USD and 4600 USD in succession, rising by nearly 3%.

Affected by this, the prices of gold jewelry for some domestic brands were also raised. The per-gram price for gold returned to 1400 yuan. On March 25, Zhou Shengsheng’s fully gold jewelry was priced at 1418 yuan per gram, up 68 yuan from the previous day. Chow Tai Fook and Chow Tai Fook also quoted 1408 per gram, up 66 yuan per gram from the previous day.

With gold prices swinging sharply, consumers like Xu Yan felt unsettled every day, toggling between unrealized gains and losses—while the real big winner was stepping onto the stage, pleased as punch.

On March 23, Lao Pu Gold (06181.HK) released its annual results for the year ended December 31, 2025. In 2025, Lao Pu Gold’s tax-included sales performance was approximately 31.4 billion yuan, up 220.3% year over year; revenue was about 27.3 billion yuan, up 221.0% year over year. Profit attributable to owners of the parent company was 4.87B yuan, up 230.5% year over year.

Over the past two years, the global luxury goods industry has been stuck in a downturn cycle, yet the popularity of this brand has kept rising, drawing increasing attention and demand. People engaged in commercial real estate told the reporter that five years ago, in domestic high-end malls, it was common to see people lining up at the entrances of LV and Chanel whenever there was a price increase. But in the past two years, the lining-up phenomenon appeared at Lao Pu’s doors.

In its announcement on the 23rd, Lao Pu Gold disclosed that it expects sales performance for the first quarter of 2026 to be 19 billion to 20 billion yuan, with net profit of 18k to 3.8 billion yuan. This means that in the first quarter of this year, Lao Pu Gold achieved 70% of last year’s full-year revenue.

Taking cues from luxury brands, gold shops need to transform

Buying and selling gold in China is a traditional and long-established business.

Gold prices are publicly transparent. For many years, when setting their prices, merchants tried all sorts of ways to make money through craft fees with thin margins as well as high-volume sales, and the premium was limited.

Now, among all gold and jewelry peers, Lao Pu is clearly a leader. All products under the brand are priced “all-in per piece,” which makes its gross margin far higher than other competitors. According to financial report data, Lao Pu’s gross margin is usually above 40%, while other companies such as Chow Tai Fook and Zhou Liu Fu (Zhou Saturday?) and others typically hover between 20% and 30%. Due to the large increase in gold prices in 2025, Lao Pu’s gross margin fell slightly from the 2024 fiscal year to 37.6%. However, in the latest announcement, the company said that after its third price adjustment in October 2025, its gross margin returned to above 40%.

Similar to the pricing strategy of luxury brands, Lao Pu Gold in recent years has maintained a frequency of raising prices two or more times per year. In April 2025, at the company’s earnings call presentation, founder Xu Gaoming said, “If we can’t sell gold better than selling leather goods, then we need to go back and reflect.” To some extent, this also reflects Lao Pu’s self-positioning.

According to recent research data from Frost & Sullivan, the average overlap between Lao Pu Gold consumers and consumers of the international top five luxury brands such as Louis Vuitton, Hermès, Cartier, and Bulgari increased from 77.3% in July 2025 to 82.4%.

But market voices are not uniformly praising; there are always doubters. In Zhou Ting’s view, head of the Yao Ke Research Institute and a senior luxury industry practitioner, last year saw multiple brands raise prices multiple times and by large margins. The core strategic intention was very clear: to urgently break away from the basic positioning of being “a gold-selling retailer,” complete its leap toward an orthodox luxury brand, and attempt to raise prices continuously so as to benchmark and stand alongside the premium levels of leading luxury brands in Europe and the U.S.

Raising prices for products is understandable—so long as the market accepts it. But Zhou Ting also pointed out that the real premium barrier for top luxury brands lies in century-old history and the brand culture and spiritual core that can’t be replicated, an exclusive system of craft patents, a deep tie between customer circles and identity, and strict scarcity management, which ultimately enables independent pricing power that stands apart from raw material costs.

Xu Yan previously bought many luxury jewelry pieces. She said that the Cartier and Boucheron jewelry she bought was actually made of 18K gold, but they were sold at prices several times higher than gold. Even Tiffany’s silverware was priced far higher than gold. But ten years ago, or even five years ago, when gold hadn’t risen as much, “I didn’t have that concept and wouldn’t have minded that much. It was purely about face—just buying a brand.”

Jenny previously worked for multiple luxury groups. She believes that when people buy those international big brands, they don’t pay attention to the underlying raw materials. They buy the value behind that brand. But she also admits that in recent years, domestic jewelry brands that have risen up truly have excellent craftsmanship, “it just takes time to be tested and proven. There are lots of people around me buying, and I followed suit and bought too.”

However, the rising challengers have also attracted the attention of old European brands. The Richemont Group owns brands such as Cartier and Van Cleef & Arpels. Last year, the group’s revenue in the China market fell by 23%. The group CEO rarely mentioned Lao Pu Gold and said it “boosted the jewelry market’s thirst and vitality.” And when LVMH’s CEO visited China last year, he also went to tour Lao Pu Gold.

Lao Pu’s rapid rise in recent years has drawn massive attention. After the initial surprise and lack of preparedness, some companies have already started to benchmark Lao Pu and put forth their own voices.

At the beginning of this March, Chow Tai Fook announced that Xie Dinghong would serve as the group’s Global Creative Director. This newly appointed creative director previously worked at companies such as Burberry and Canada Goose. Before joining Chow Tai Fook, he was Creative Director for Hermès in China, and he was also the brand’s first creative director based full-time outside the Paris headquarters.

Industry insiders interpreted this as a signal that Chow Tai Fook planned to pivot toward a luxury-oriented transformation.

In Chow Tai Fook’s 2025 annual report, the company mentioned that the revenue from its priced-for-gold products (gold products with a fixed price) surged by 105.5% year over year. A new lineup of hallmark fixed-price gold products—Chow Tai Fook’s “Chuanfu Series” and “Gugong Series”—achieved about 4 billion Hong Kong dollars in sales, exceeding the annual target.

Companies that continue to “sell by the gram” will still exist. In the jewelry sector, whether Chinese enterprises can break the fixed label of “traditional gold retailers” and push toward a transformation into luxury branding—so as to obtain even higher premiums—hinges on whether they can tell the brand story well. Whoever can tell the brand story well will have the higher gross margin. Brand power will become the focus of the next round of competition.

 Sina partners with a large platform for futures account opening—safe, fast, and reliably protected
![](https://img-cdn.gateio.im/social/moments-a75fdb6475-34a575257f-8b7abd-ceda62)

A wealth of information and precise insights—exclusively on the Sina Finance app

Byline: Zhu Hunan