Demand for gold jewelry doubles in the first half of 2021
Popularity among consumers in their twenties and thirties a factor
Patriotism and e-commerce boom are helping to drive the trend
Chinese heritage gold market to reach $ 15 billion by 2024
SHANGHAI, Aug.29 (Reuters) – For many affluent young Chinese consumers, modern simplicity is in order and jewelry tradition is back.
Sales of gold bracelets, pendants, earrings and necklaces that are inspired by dragons, phoenixes, peonies and other traditional Chinese motifs and symbols are soaring among consumers, especially those in their 20s and 20s. thirties, helping to revive the demand for gold in the country after a collapse induced by the pandemic.
An e-commerce boom and national pride are fueling the rising demand for so-called heritage gold jewelry, which requires complex craftsmanship and can generate premiums of 20% or more over jewelry in conventional gold, according to industry executives.
The popularity of these new coins started to take off in mid-2020 and helped demand for gold jewelry in China – the world’s largest metal consumer – to more than double in the first half of 2021 compared to a year earlier in March. pre-pandemic levels, according to the World Gold Council (WGC).
Strengthening the economy and improving consumer spending boost sales. Young consumers’ interest in classic designs and the often bulky gold jewelry with a matte finish marks a shift in their appetite for the precious metal, previously shunned as a conspicuous sign of wealth and status symbol for older generations.
It also gives gold a boost at a time when demand from India, the world’s second-largest consumer, has been hit as the pandemic has delayed marriages, where gold is traditionally included in the dowry.
Major Chinese jewelry retailers, such as Hong Kong-listed Chow Tai Fook Jewelery Group Ltd (1929.HK) and Luk Fook Holdings International Ltd (0590.HK), said their heirloom gold collections were doing well, especially among young consumers.
Chow Tai Fook, China’s largest jeweler by market value, said its heirloom gold collection accounted for 40% of its total retail sales value of gold products in mainland China in its fiscal year ended March 2021, compared to 29% the previous year. , faster growth than for other jewelry.
Part of the appeal of heritage gold jewelry, especially among younger consumers, reflects a desire to be patriotic amid a backlash against Western clothing brands in China who have expressed concern over claims of rights violations in China’s Xinjiang region. Beijing has denied the allegations. Read more
“The younger generation grew up when the Chinese economy was stronger, they have more confidence in Chinese development and may have less admiration for Western culture,” said Roland Wang, general manager of WGC China.
“They want to have a more traditional Chinese culture in their daily life, which can be represented through what they wear or how they decorate their home … Heritage gold can bring that to them.”
Gao, a 29-year-old sales manager from eastern Jiangsu province, who only wanted to be identified by one name, says she spent 30,000 yuan ($ 4,620.15) this year on a bracelet and hairpin , with filigree patterns, for everyday use. She plans to pass them on to her two-year-old daughter one day.
“I really like Chinese culture and prefer products with Chinese history. I often wear Han-style (traditional) clothes, that’s why I choose heirloom gold, to match my overall look,” Gao said.
Jewelers say the products are increasingly popular with millennials in Beijing, Shanghai and other major cities as well and an e-commerce boom, giving consumers access to a much wider choice of jewelry products , reinforces the trend.
“The pandemic has indeed made me spend more on gold jewelry… It has triggered a lot of direct sales,” Gao said.
In anticipation of longer-term demand, gold jewelry makers are stepping up their investments in heritage gold. An official at a Shenzhen-based manufacturer, who declined to be identified because he was not authorized to speak to the media, said his company was primarily promoting heirloom gold this year after receiving orders major brands and customers.
“Heritage gold sales have been incredible on this Lunar New Year holiday, surpassing those of conventional gold jewelry,” he said.
“After seeing this trend, our company has extended research and development on design and technology to create more new models of heritage gold. Other gold jewelry makers in Shenzhen are doing the same.
The China Gold Association says heritage gold jewelry has become the main driving force behind the industry’s recovery after the impact of the pandemic. And the rapid growth looks set to continue. According to the market research and research consultancy Beijing Zhiyan Kexin Consulting, the heritage gold market in China increased tenfold between 2017 and 2019 and is expected to reach nearly 100 billion yuan ($ 15.43 billion) d ‘by 2024. Its share of the Chinese gold jewelry market is expected. go from less than 2% in 2017 to almost a quarter by 2024.
“Gold jewelry companies are quickly recognizing the importance of cultural value and digging deep into it,” the consulting firm said in a heritage gold report in January.
($ 1 = 6.4815 yuan Chinese renminbi)
Reporting by Emily Chow in Shanghai, additional reporting from newsrooms in Beijing and Hong Kong; Editing by Shivani Singh and Susan Fenton