A brief outlook on Chinese jewelry
In Chinese culture, jewelry dates back to around 5000 BC, in the Neolithic. Ever since then, its role was a complex one, as it represented social status and spiritual values, while also being used for practical reasons.
For example, around 221 BC - 220 AD, the queens and imperial concubines would wear gold rings on their left hands, to showcase that they were pregnant or menstruating and, thus, unable to serve their emperors.
For the Chinese, jewelry had so much cultural value that people would be buried with their wealth. This phenomenon made it possible for archeologists and historians to discover many beautifully preserved pieces of Chinese jewelry, thus being able to understand the country’s identity, its level of craftsmanship and heritage.
The Chinese jewelry market reached $100 billion in 2020, according to Euromonitor Intl.
In a 2018 article, Gerry Chen, Trade Engagement Director, at the World Gold Council, emphasized China’s role as the largest jewelry market consumer, accounting for 30% of the global market.
According to the Euromonitor International report, quoted by Business of Fashion, the Chinese jewelry market reached the $100 billion threshold in 2020, an impressive number when it comes to consumption.
Out of all sales from 2020, just 15% is represented by branded pieces, 5% less than the global market average. While, as the above mentioned source shows, most of the world’s jewelry is unbranded, there are several companies which have proved popular with Chinese audiences.
Domestic names like Chow Thai Fook, Qeelin, Cindy Chao have managed to use technologies, omnichannel experiences, craftsmanship and symbols that are deeply rooted in the Chinese culture to attract audiences their ways. This enabled them to compete with internationally acclaimed companies, with impressive heritage, like Tiffany & CO., Cartier, Van Cleef & Arpels or Chaumet.
Image credit : Cindy Chao
Jewelry in China - between good wishing, investment and relationship commitment
While adult women jewelry represents the most important part of the Chinese market, there are other segments that also attract consumers and which are worth taking into account.
Image credit : Qeelin
Male jewelry, for example, is bought predominantly by men, who shop for pieces that would help them complete their looks or which may be considered either investments or collectibles. The segment, although well represented, is developing at a slow pace, as audiences require more attention, innovative designs and more persuasive communications.
Buying jewelry for children as a way of showing goodwill, and wishing them health and happiness is a tradition in China, where consumers often opt for bracelets and necklaces from precious metals that are often considered inflation-proof.
Moreover, many seniors choose to buy jewelry as a way of securing their assets against inflation, but also of showing their love towards family members. Heirloom jewelry plays an important part in their lives, as it is part of their culture to pass down iconic pieces, from one generation to the other.
China is the world’s largest platinum jewelry consumer
As Statista shows, in 2020, China had a gross demand for platinum for jewelry, which was assessed at 945,000 ounces (29.5 tonnes), significantly higher than Japan, which came out second in the world top, at 238,000 ounces. Moreover, 2019 HKTDC Research reports that the country also registers the highest number of distributors for platinum jewelry, 3.8 times higher than Japan and 4.4 times higher than India.
While platinum consumption is higher than in other countries, the precious metal is far from being a top preference for mass consumers, who appear to be more intrigued by gold and diamonds.
Chinese consumers have a cult for gold jewelry
China is one of the leading forces on the global market, when it comes to gold consumption, being the second biggest consumer, after India, Investopedia reports. According to the China Gold Association, 676 tons of gold jewelry were bought in the country, in 2019.
Especially traditional Chinese consumers have a cult for gold, which, in their culture, symbolizes spiritual and material abundance and freedom.
In earlier days, consumers were predominantly interested in 24 ct. gold jewelry, but, in time, as younger audiences started emerging, jewelers introduced K-gold (18 ct. gold), and 22 ct. gold. This way, new, fashionable, affordable pieces became available on the market, satisfying the needs of Generation Z and some Millennials and offering better profit margins to retailers.
Of course, while the interest for gold is consistent throughout the year, it peaks before the Chinese New Year, when consumers offer it to their dear ones. As tradition dictates, older, financially potent people give red envelopes with money or gold jewelry to their younger relatives, be those children, nieces, nephews etc.
New trends shifting Chinese jewelry market : Our TOP 5
Still, while many things are consistent in China’s appreciation for jewelry, there are some new trends which are impacting retail ecosystems, as well as the approaches and technologies used.
1. As the pandemic continues, Chinese consumers direct their money from travel towards purchasing jewelry
2021 looks like a good year for the Chinese market, Jing Daily reports, as, in the first quarter, gold, silver and jewels sales reached $15.9 billion, over 80% more than in 2020. Out of all, gold pieces registered record figures, standing out at 191.1 tonnes and reaching the highest quarterly level since 2015. Polished diamonds also surpassed their 2019 levels, generating sales of $722 million, between January and March of this year.
This showcases that, consumers are starting to feel safe about making acquisitions and, moreover, that they are interested in developing a culture that fosters heirloom jewelry, by purchasing valuable, durable items.
Moreover, as countries have yet to open their borders fully and to foster travel, tourism, the greatest competition to jewelry in chinese consumer budget, has been reduced, which means consumers have more income to spend on iconic pieces.
2. More and more consumers are choosing silver and diamonds over gold
In the past years, the enthusiasm for gold has been reducing in China, where, in 2019, consumption fell 9.6%, compared to 2018. The decrease is attributed to the general audience, with Generation Z paving the way. As figures from the World Gold Council showcase, only 12% of Chinese consumers with ages from 18 to 22 years old said they would buy gold jewelry in the following year.
Younger demographics consider gold tacky and out of style, as a Zhihu report quoted by Jing Daily showcases. In order to escape that esthetic, shoppers are looking at international, mainstream companies like Pandora, Tiffany & CO. and APM Monaco.
Millennials, on the other hand, are more passionate about diamonds. According to the aforementioned 2019 HKTDC research report, about 80% of the Chinese consumers that purchase diamonds are born in the ‘80s and ‘90s. The occasion of choice is for their weddings, but others also apply.
While now just under 50% of the couples getting married choose the Western approach and use diamond rings to showcase their eternal love, the percentage is expected to grow to 75% in the following years.
As De Beers’ Diamond Insight Report shows, China is the world’s second largest diamond consumer, after the US, and has the fastest growth rate.
3. Although the number of weddings decreases, more and more consumers are buying diamonds to celebrate relationship and life milestones
According to information released by China’s National Bureau of Statistics, from 2013 to 2019, the number of Chinese people getting married for the first time has decreased by 41%, from 23.8 million, to 13.9 million.
In today’s landscape, it has become acceptable for women to remain single and many are taking advantage of the opportunity to focus on themselves and fight for a society that offers more inclusivity and gender equality.
Still, even in this context, diamond sales are growing and that is due to the fact that Generation Z and Millennials associate the jewels with more than traditional commitment.
These demographics purchase diamonds to showcase their love and appreciation for their dear ones, to celebrate important events and milestones.
For example, as a De Beers’ 2019 report shows, Chinese husbands offer diamonds to their wives when celebrating anniversaries, while those in same-sex couples use diamonds to mark special moments.
Another De Beers’ more recent, 2020 report shows that, when prompted, over 4 out of 5 Chinese higher income men mentioned they intended on gifting their beloved ones with diamond jewelry in the coming holiday season, while 4 out of 5 women in higher income groups mentioned they intended on buying diamond jewelry for themselves.
4. Niche jewelry designers are gaining ground
What young consumers don’t find in the jewelry offer they encounter on the Chinese market is a high attention to design. According to the De Beers’ 2019 report, Millennials would buy more diamonds if designs were more appealing.
Younger shoppers perceive jewelry as personal statements, which enable them to express themselves, as well as complete their looks and styles. This is why they often opt for pieces that have average prices of up to $150 and which they can mix and match with their outfits.
If Millennial shoppers have a preference for established international brands, like Pandora and Swarovski, Generation Z is open to discovering new names and supporting the Chinese market and its domestic designers, which prove to be more agile, affordable and which boast gender-fluid designs.
Names like HEFANG Jewelry, OOAK or Cought in Vain have been generating mentions and content on social media using immersive technologies and gathering large amounts of followers on their accounts.
5. Consumers want phygital experiences
In the past years, even before COVID-19, jewelry businesses have paid attention to digitalization, developing direct-to-consumer platforms and expanding their social presences.
Now, names like Tiffany, Bvlgari, Cartier and Louis Vuitton developed WeChat mini programs, while Van Cleef & Arpels launched its e-store on Tmall. Richemont added Cartier to its Tmall Luxury Channel and created its flagship store online.
Although consumers still want to try and see jewelry in physical form, there is a strong need for a new type of immersive, tech-oriented, phygital retail, which makes digitalization mandatory. The objective here is to build both trust and connection, to limit unnecessary contact and develop new opportunities for brand engagement and interaction.
Enabling private consultations or 3D product visualization and configuration are excellent ways of attracting audiences and leading them one step further in the awareness - consideration - purchase funnel.
This is why seamless experiences that move from the offline to the online are necessary, when approaching the younger Chinese consumers, which represented one of the most relevant income sources for jewelry brands, during the COVID-19 crisis.
China’s jewelry market is undergoing a significant transformation as younger consumers and low-tier cities are emerging as key drivers of growth. Millennials and Gen-Zs are reshaping the local jewelry market by showing a strong preference for gold jewelry over traditional silver and diamond options. This shift in consumer behavior has prompted established jewelry brands to revamp their product lines and marketing strategies to cater to the evolving tastes and preferences of this new generation of consumers.
Additionally, the growing prosperity of China’s lower-tier cities has opened up new opportunities for jewelry brands to expand their reach and tap into previously untapped markets. As a result, understanding the changing dynamics of the Chinese jewelry market has become crucial for both established brands and emerging players seeking to capitalize on this fast-evolving market.
In 2021, China had the largest jewelry market in the world, accounting for 27.2% of the global share. Jewelry sales in China mostly followed the household disposable income which has been growing relentlessly since 2010, leading the best-off class to increase elevenfold between 2010 and 2020.
Data source: Statista, designed by Daxue Consulting, 2014-2022 size of the Chinese jewelry marketThere are three distinct players in China’s jewelry market: world-renowned brands, Hong Kong brands and Chinese mainland brands. Foreign companies like Cartier, Swarovski and Van Cleef & Arpels dominate the premium high-end market in higher-tier cities, with prices generally higher than those of domestic brands. Hong Kong and mainland brands, on the other hand, compete in the high and medium-end markets. While Chinese domestic jewelry companies are younger than their international counterparts, typically with no more than a hundred years of history, they offer more affordable prices.
Leading companies like the Chow Tai Fook Group implement a multi-brand strategy to build a high-end jewelry brand image. Jewelria, for example, is a brand of the Chow Tai Fook group which targets high-income people and only has stores in a few first-tier cities. Meanwhile, new domestic brands, such as YIN, I Do and Qeelin, are gaining ground by targeting previously overlooked customer segments, particularly younger demographics. However, branded jewelry still only accounts for 15% of the Chinese jewelry market, indicating plenty of room for new players to enter the market.
As the Chinese jewelry market reaches maturity in first- and second-tier cities, jewelry companies are turning to third-tier cities as the key engine of growth. The population growth rate in low tier-cities has doubled over the last 10 years and the total population in third-tier cities is five times larger than in first-tier cities. The increasing purchasing power of second- and third-tier cities is driving demand for jewelry in China and prompting store expansion in these areas.
Lukfook and Chow Tai Fook have the largest number of stores in mainland China, with Lukfook opening about 280 new stores in lower-tier cities between 2013 and 2017, while Chow Tai Fook focused on second-tier cities with around 500 new stores. Foreign brands like Cartier are also expanding in second-tier cities.
However, the market in first-tier cities remains significant, and jewelry houses continue to invest in upgrading their positioning and branding strategies to meet the needs of their most sophisticated customers.
According to the Gems & Jewelry Trade Association of China, China’s diamond jewelry market reached 12.4 billion USD in 2021. China has steadily held the position as the world’s second-largest diamond market for over a decade, preceded only by the US. According to diamonds.net, between 2002 and 2018, the import of net polished diamonds through the Shanghai Diamond Exchange recorded an astonishing annual increase of about 27%. As younger generations impose themselves as the main drivers of national consumption, China’s diamond market boasts great potential for growth —according to both McKinsey and Bain, China will account for roughly half of all global luxury spending by 2025.
Source: WeChat, Cartier’s flagship store on WeChatAlthough diamond jewels are increasing their share in the bridal market, as Gen-Z consumers become the main group of newlyweds and domestic marriage rate declines, the non-bridal segment is bound to play a major role in boosting the demand for jewelry goods. Thus, brands like I Do are now attempting to widen their audience, conveying the idea that diamonds are not just for weddings.
Highly educated women in higher-tier cities are a significant consumer group in the jewelry market in China. Unlike Westerners, Chinese men also show great appetite for diamonds and jewelry in China. In fact, according to a 2019 survey by the Hong Kong Trade Development council, 67% of Chinese male consumers aged 30-44 expressed a desire to own diamonds.
Source: Weibo, Cantonese actor Zhong Hanliang wearing one of the rings from Bulgari B.zero1 unisex collectionIn accordance with Chinese traditions, people give longevity locks, bracelets, and necklaces to children as lucky charms as well as a way of wishing them a healthy and happy life. In particular, gold jewelry items are the top choice among parents concerned about family’s future financial situation due to their inflation-proof value. Many companies have launched children’s collections, such as Chow Tai Fook’s collaboration with Disney and Marvel for its baby gift sets.
Smart jewelry is a growing trend in China’s jewelry market. With the rise of wearable technology, consumers are increasingly interested in jewelry that serves a dual purpose – not only as an accessory but also as a smart device. Smart jewelry can track fitness goals, monitor health, and even provide notifications from your phone. Domestic brands such as Ringo and Unicmi have already entered the market with their own smart jewelry products, while international brands like Swarovski and Misfit are also tapping into this emerging market. The potential for smart jewelry in China is vast, with consumers looking for innovative and convenient ways to incorporate technology into their everyday lives.
In China, the digital world has become an integral part of the luxury consumer’s journey. McKinsey reports that around 60% of touchpoints are digital in China, but customers still prefer to gather information online then purchase them in physical stores, which include display counters in shopping malls, specialty stores and experiential stores. Nevertheless, independent shops, chain stores and e-commerce are gradually gaining ground.
E-commerce players such as Zbird display sample products in their physical stores and keep limited inventory, while customers can place orders via in-store tablets, their own mobile devices, or store clerks. Retailers keep their most expensive items in physical stores, as customers prefer to see and try them before spending large amounts of money on jewelry in China.
Most major players in China have their own Tmall and JD flagship stores, while WeChat and VIP are the most popular social-media platforms where users can have access to jewelry products. WeChat maintains its position as the most popular Chinese social media platform with 1.3 billion monthly active users in 2022.
Jewelry houses rely on Tencent’s multifunctional app for their O2O strategy in China, with Cartier being the first luxury jewelry brand to use WeChat moments ads. For 2023 Valentine’s Day, the brand launched a limited-edition red gift box on its WeChat store, containing rings, perfume, accessories, and handbags. With over 300k views on the gift box social media posts, Cartier increased Chinese consumer desire for its products and its luxury limited-edition presentation.
Besides WeChat, Weibo and Douyin are also witnessing a major increase in the number of jewelry brands running a flagship store on the platforms. As of March 2023, domestic jewelry brand I DO boasts 300k fans on Douyin, making it one of the most popular national jewelry houses on the platform. Some of I DO’s most popular Douyin posts with over 2 million views are of romantic wedding proposals with a I DO ring.
Moreover, live-streaming sales has become increasingly popular for all major jewelry brands. Jewelry was the top category in terms of live-streaming seller transaction volume in 2021.
The jewelry market in China is constantly evolving to meet the needs of younger, customization-demanding consumers. Key players are enhancing their O2O strategy by integrating online and offline features to improve the customer experience. For instance, LVMH-owned Chaumet allows customers to measure their finger sizes in 360 degrees on their mini program, while Cartier offers tailor-made services like engraving, gift-wrapping, and white-glove delivery services via Tmall.
Moreover, jewelry houses rely on storytelling to stand out from the crowd and catch consumers’ attention. Foreign brands emphasize their long history and deep-rooted legacy, while Chinese brands focus on design, social commitment, quality of raw materials, and cost-effectiveness. Additionally, classic pieces from big names are seen as ever-green and versatile, while domestic brands provide younger, more fashion-forward jewelry to target Gen-Z consumers, as seen with WBJ and YIN.
Sustainability is also a growing concern for high-end luxury consumers in China. A study by Agility TrendLens 2021 found that 88% of Chinese high-end jewelry consumers take brands’ social responsibility seriously when purchasing luxury goods, with 89% willing to pay a premium for sustainable and eco-friendly products. This trend extends to China’s diamond market, with 56% of respondents open to paying between 10% and 20% more for a sustainable diamond.
While there is still a bias against artificial diamonds, moissanite diamonds are becoming increasingly popular among Chinese Gen-Z consumers. This is because young couples are looking for more cost-effective options for their weddings, and lab-grown gems offer a more affordable choice. The pandemic has accelerated this trend, as couples prefer to allocate their money to other commodities.
Data source: Agility TrendLens 2021, designed by Daxue Consulting, Percentage of surveyed high-net-worth consumers who are willing to pay more for a sustainable brand by countryAuthor: Hannah Wu