Jewelers seeing a bit of a sparkle on mainland
Waves of jewelry store closures tell the story: The jewelry business has been among the hardest hit in the coronavirus pandemic. But it may be seeing light at the end of the tunnel with a staggered recovery in the wake of the Chinese mainland’s peak wedding season in early October.
World demand for jewelry in the first half plunged 46 percent to 572 tons compared with the same period a year ago, with markets in lockdown and consumers deterred by soaring gold prices and a squeeze on disposable income, according to the World Gold Council.
The price of gold climbed 17 percent in US dollar terms in the first six months, hitting record highs, among other currencies. The high prices were lifted by record flows of 734 tons into gold-backed exchange-traded funds as global central banks and governments cut rates to inject massive liquidity.
Platinum recovery
Demand for jewelry on the mainland also faltered, according to the National Bureau of Statistics. Jewelry retail sales slumped 20 percent yearon-year between Januar y and July to 115 billion yuan ($17.4 billion). But sales in July rose 7.5 percent to 17.9 billion yuan.
Data provider iiMedia Research said the mainland’s jewelry market is on the mend with the easing of socialdistancing restrictions and a booming wedding market. Policies spurring consumption are also likely to accelerate the recovery.
Platinum prices are at a favorable level compared to gold this year, contributing to a faster recovery in the platinum jewelry market. Other key factors include improved consumer demand, said Liu Zhenzhen, director of global corporate marketing at Platinum Guild International — a marketing organization for platinum jewelry.
The mainland’s platinum jewelry marke t has been recovering since April, with demand picking up in both the manufacturing and retail sectors. With plain gold and gem-set jewelr y currently overstocked, platinum jewelry manufacturers have seen an increase in orders for replenishment of plain platinum jewelry.
“We’ve seen 1 percent year-on-year growth in platinum jewelry fabrication in the second quarter, and a 1 percent rise in PGI retail partners’ sales during the same period on the mainland. The momentum continued to be stronger in September and during the October National Day holidays,” said Liu.
Hybrid marketing
Liu said platinum jewelry prices are attractive compared to gold prices, and some retail and manufacturing partners are refocusing on platinum jewelry.
The public-health crisis has forced industries like the jewelry business, which relies mainly on physical retail sales, to review their investments with a more advanced digital strategy.
But Liu believes brick-and-mortar stores are still important as most consumers on the mainland still prefer to shop at stores, especially for wedding jewelry.
“Wedding jewelry is different from fashion jewelry. Consumers want to touch, wear and feel it before making purchases. And all these are not available online,” she said. “Now, it is important for retailers to have an omnichannel strategy to better engage with consumers.”
Most jewelry brands are now trying to strike a balance between physical and digital sales.
Chow Tai Fook Jewelry Group, one of Hong Kong’s biggest jewelry retail chains, said it will continue its market expansion through the franchise model when the pandemic situation stabilizes and focus on online-offline channel integration to take advantage of the digital trend.
Wedding jewelry is different from fashion jewelry. Consumers want to touch, wear and feel it before making purchases. And all these are not available online.” Liu Zhenzhen, director of global corporate marketing at Platinum Guild International, a marketing firm