Jewellery maker Pandora has made the decision to delay its planned brand relaunch in China due to slow customer demand in the aftermath of the COVID-19 pandemic. Although China has been identified as a potential driver of future growth for the company, the country’s jewellery market is recovering at a slow pace following the strict COVID-19 restrictions. Chief Executive Alexander Lacik has noted that middle-income earners in China are exercising caution as they reenter the market, unlike the trend witnessed in Europe and the United States.

Initially, Pandora had intended to launch a country-wide marketing campaign for its brand relaunch in China. However, due to the ongoing pandemic, the company revised its plans and opted for a simultaneous launch in major cities instead. Nevertheless, with traffic volume still significantly below pre-pandemic levels, Pandora has now decided to adopt a sequential launch strategy, focusing on one city at a time.

Although China currently only contributes 3% to Pandora’s revenue, the company remains optimistic about its potential for growth in the country. Despite the challenging circumstances, Pandora reported first-quarter results that slightly surpassed analysts’ expectations, prompting the company to raise the lower end of its full-year growth outlook. Pandora now expects to achieve organic sales growth between -2% and 3% for the year, an improvement from its previous estimate of between -3% and 3%.

Industry analysts, including Janne Vincent Kjaer from Jyske Bank, have observed no signs of a significant slowdown in Pandora’s sales despite the prevailing macroeconomic challenges. Kjaer described the company’s quarterly results as a solid start to the year.

Pandora’s decision to adjust its brand relaunch strategy in China reflects the difficult circumstances faced by the retail industry as it strives to recover from the impacts of the pandemic. The company’s cautious and measured approach of focusing on one city at a time demonstrates its commitment to ensuring the success of its relaunch efforts in a critical market. With a revised growth outlook and positive sales performance, Pandora remains hopeful about its long-term prospects in China and the global market.

Useful links:
1. CNBC: Pandora sees strong trading in first quarter, income doubled
2. Reuters: Pandora expects strong rebound in 2021 after sales slowdown