Jew­elry com­pa­nies vie for China’s in­de­pen­dent women in mar­ket­ing blitz

Jerusalem Post - - BUSINESS & FINANCE - • By DONNY KWOK and FARAH MAS­TER

HONG KONG (Reuters) – A woman dressed el­e­gantly in a black pants suit, hands tucked in her pock­ets, poses with con­fi­dence as she dis­plays a col­lec­tion of glis­ten­ing sil­ver medals gleam­ing from her tai­lored jacket.

“A memento to re­ward your own suc­cess,” reads the slo­gan along­side a di­a­mond-en­crusted pen­dant in an ad­ver­tise­ment from Chow Tai Fook, a Hong Kong-based jew­elry com­pany that has a big pres­ence across China.

Fac­ing slow­ing global de­mand for di­a­mond jew­elry, di­a­mond com­pa­nies from around the world are re­shap­ing mar­ket­ing cam­paigns to tap a grow­ing pool of in­de­pen­dent fe­male spenders in China, the world’s se­cond-largest econ­omy.

Chi­nese and in­ter­na­tional play­ers such as Tif­fany & Co., De Beers and the Di­a­mond Pro­duc­ers As­so­ci­a­tion are in­creas­ing their mar­ket­ing bud­gets by as much as 50% glob­ally, ac­cord­ing to the com­pa­nies.

The aim is to pro­mote di­a­monds as a way for women to ex­press them­selves rather than tie the gems to tra­di­tional mar­ket­ing no­tions of mar­riage. In China, which is the fastest-grow­ing mar­ket, this is a par­tic­u­lar fo­cus, ex­ec­u­tives said.

De Beers in Septem­ber said 26% of all di­a­mond jew­elry in China was bought by women in 2016, with growth of about 12% an­nu­ally for the coun­try.

That rapidly grow­ing mar­ket is be­ing seen as a key prize for jew­elry com­pa­nies due to low pen­e­tra­tion rates and ris­ing spend­ing power among an in­creas­ingly wealthy fe­male pop­u­la­tion. The chal­lenge for di­a­mond com­pa­nies is to stay rel­e­vant at a time when spend­ing on ex­pe­ri­ences and ac­tiv­i­ties, such as travel, is gaining fa­vor, and many younger con­sumers are shun­ning tra­di­tional no­tions of mar­riage, jew­elry ex­ec­u­tives say.

“Di­vorce rates are soar­ing. They see dat­ing apps, cheat­ing – that is very much of the en­vi­ron­ment they live in to­day,” Di­a­mond Pro­duc­ers As­so­ci­a­tion CEO Jean-Marc Lieber­herr said in an in­ter­view, re­fer­ring to young peo­ple in China. “They are very sus­pi­cious of the idea of mar­riage in the sense as some­thing as a fairy tale.”

The DPA, which rep­re­sents min­ers such as Rio Tinto and Al­rosa, has more than quadru­pled its global mar­ket­ing bud­get over the past two years and is plan­ning to spend $70 mil­lion in 2018, up nearly six­fold from $12m. in 2016.

It is fo­cus­ing on China in 2018 and plans to spend $10m. launch­ing its “Real is Rare” cam­paign in the coun­try later this year. It has al­ready rolled out the cam­paign, aimed at mil­len­ni­als, in In­dia and the United States.

Lieber­herr said a key fo­cus was to get con­sumers to move away from the no­tion of di­a­monds just as gifts for spe­cial oc­ca­sions. Alan Chan, the deputy gen­eral man­ager at Chow Tai Fook in Hong Kong, said over the past five years women had started buy­ing di­a­monds them­selves far more fre­quently, in line with fash­ion trends.

“We see a grow­ing trend of the self-use mar­ket by women,” he said. “There are more work­ing ladies who are fi­nan­cially in­de­pen­dent and have their own in­come. In­stead of buy­ing one ev­ery few years, now it can be a few times in a year.”

The ex­pan­sion of cam­paigns in Hong Kong and China, also un­der­taken by smaller play­ers such as Chow Sang Sang and Luk Fook Hold­ings, marks a shift from the 2000s, when di­a­mond com­pa­nies glob­ally spent less than 1% of to­tal sales on mar­ket­ing, the Bain con­sul­tancy said.

(Bobby Yip/Reuters)

PASSERSBY are seen in front of a Chow Tai Fook jew­elry store in Hong Kong. Ma­jor com­pa­nies aim to pro­mote di­a­monds as a way for women to ex­press them­selves rather than tie the gems to tra­di­tional mar­ket­ing no­tions of mar­riage.

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