Gold jewellery market consumption ushered throughout the economic recovery

The National Bureau of Statistics recently released consumption data for the first quarter of 2023. According to the data, total retail sales of consumer goods reached 11,492.2 billion yuan, marking a year-on-year increase of 5.8 percent. Specifically, retail sales of gold, silver, and jewellery totaled 97 billion yuan, reflecting a 13.6 percent year-on-year growth. March alone saw retail sales of 28.8 billion yuan, up by 37.4 percent year-on-year. Notably, the category of gold, silver, and jewellery showed the most significant increase in total retail sales, indicating a robust recovery trend.

The jewellery market experienced a surge in consumption following adjustments in epidemic policies:

The first quarter of 2023, coinciding with the Spring Festival and benefiting from post-epidemic policy adjustments, witnessed a peak period for gold jewellery consumption. Significant recovery was noted in jewellery consumption, with heightened activity observed across various regions, including major cities like Beijing, Shanghai, and Shenzhen. Renowned jewellery brands such as Chow Tai Fook, Lao Fengxiang, and Liufu capitalized on marketing opportunities, resulting in bustling store environments and heightened demand even in wholesale markets. Retailers responded by increasing their inventory of gold jewellery.

Chow Tai Fook Group reported a 14.2 percent year-on-year increase in retail sales value for the first quarter. Mainland China contributed significantly, with a 9.6 percent year-on-year rise, comprising 88.9 percent of the group's total retail value. Although same-store sales declined by 5.6 percent overall, sales of jewellery inlays, platinum, and K-gold jewellery saw a 19.3 percent decrease year-on-year. In contrast, gold jewellery and products saw a 2.0 percent decline year-on-year. In Hong Kong, Macao, and other markets, however, there was a notable 71.2 percent year-on-year increase in retail sales, accounting for 11.1 percent of the group's total retail value. Same-store sales in these regions soared by 96.5 percent, driven by a 99.2 percent year-on-year increase in jewellery inlays, platinum, and K-gold jewellery, and a 116.5 percent year-on-year rise in gold jewellery and products.

According to data from the China Gold Association, gold consumption during the period from the Spring Festival to the Lantern Festival in 2023 rose by 18.2 percent year-on-year. Cultural and creative products, bracelets, and other jewellery accessories for the Year of the Rabbit enjoyed high sales during the Golden Week. Investment products like gold coins and investment gold bars also saw increased consumer interest.

Valentine's Day on February 14th further boosted sales of gold and silver jewellery. Gold jewellery, prized for its value retention properties, gained popularity among consumers, alongside rising sales of personalized jewellery. Prices for jadeite, jade, gems, and other high-end jewellery materials surged, leading to increased sales compared to the previous year.

From mid-March onwards, international gold prices steadily rose, prompting heightened interest from investors and buyers alike. Domestic gold prices mirrored this trend, with physical stores like Chow Tai Fook, Zhou Shengsheng, and Lao Fengxiang seeing prices rise by up to 40 yuan per gram within a week, exceeding 580 yuan per gram at their peak. Overall, March witnessed a 6.4 percent increase in gold prices, marking an 8 percent rise year-on-year.

Jewellery exhibitions resumed, with demand outpacing supply:

Epidemic policy adjustments facilitated the revival of major jewellery exhibitions. Events such as the Thailand International Jewellery Exhibition, Hong Kong International Jewellery Exhibition, and China International Jewellery Exhibition were held successively from February to March. These exhibitions attracted widespread attention, with participants, buyers, wholesalers, and jewellery enthusiasts from around the globe converging to explore the latest offerings.

Shortages were observed in jadeite and precious stones. At the Thailand Jewellery Fair, industry peers noted a general increase in gemstone prices. The average retail price for platinum necklaces and rings reached 1820 yuan per gram, marking a 2.3-fold increase from 2022. Similarly, the average wholesale price of gold jewellery rose to 2660 yuan per kilogram, a 3.5-fold increase from the same period last year. Silver jewellery's average wholesale price surged to 6200 yuan per kilogram, more than doubling from 2022. High-grade gemstones like diamonds, red sapphire, and turquoise saw sharp price hikes, with rubies doubling in value. The subsequent Hong Kong and Beijing exhibitions highlighted depleted inventories among merchants, prompting urgent replenishment and underscoring a surge in jewellery demand amid supply shortages.

Shifts in gold jewellery consumption trends, driven by younger demographics:

According to the 2022 National Jewellery Consumption Trends Report, consumers aged 25 to 34 accounted for 55 percent of gold jewellery purchases in mainland China, making them the largest consumer group. The 35-44 age group followed closely, representing 36 percent of the market. Looking ahead, Generation Z, consumers under 25, are poised to become pivotal in driving gold consumption, signaling a youthful shift in China's jewellery market.

Gold jewellery and investment products are gaining favor among consumers within China's retail jewellery market. In the first seven months of 2022, gold products dominated jewellery sales, capturing a 59 percent market share. As domestic gold jewellery designs and craftsmanship continue to evolve, younger consumers are increasingly embracing gold jewellery.

The "2021 China Gold and Jewellery Consumption Survey White Paper" underscores this trend, revealing a growing preference among younger consumers for diverse and innovative gold products. While gold was historically associated with wedding accessories, its appeal now extends to a broader range of products characterized by diversified designs. Consumers aged 25-35 account for a significant 75.59 percent of gold jewellery purchases, with post-90s and post-00s generations driving this trend.

Changing consumer perspectives on jewellery consumption, from emotional value to investment value:

The rapid evolution of the internet and the layered impact of the epidemic have reshaped consumer attitudes towards jewellery consumption. Traditional emotional marketing strategies in the jewellery sector are losing appeal, as consumers increasingly prioritize value retention. Gold jewellery, in particular, has emerged as a cornerstone of the jewellery market's consumption patterns.

The World Gold Council highlights gold jewellery's dual appeal as both a striking accessory and a store of wealth. It satisfies consumer demands for both aesthetic beauty and financial security. Domestic gold jewellery has seen significant stylistic upgrades, driving technological advancements in production processes.

Looking forward, technologies like ancient gold and 5G gold manufacturing are pioneering innovative jewellery designs that resonate with growing consumer demand. This trend not only supports industry growth but also reflects China's evolving gold consumption landscape towards more sophisticated and diversified preferences.