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