CHINA FASHION BUSINESS

▼The following discussion and summary from the Coldy Fashion Circle address industry-related issues. These insights are the product of collective wisdom and do not represent individual opinions. The aim is to benefit industry professionals.

Where is the Rigid Demand in the Jewelry Industry?

1. Who Needs Jewelry?

The consumption ecosystem of the jewelry market is undergoing significant changes. A Shenzhen-based jewelry wholesale company, with 13 years of experience, operates wholesale businesses for eight major categories, including colored gemstones, pearls, amber, beeswax, and red coral. According to 2024 data, overall jewelry consumption has declined, but luxury jewelry has achieved a 5% year-on-year growth. This polarization highlights that high-net-worth individuals still maintain strong purchasing power.

Currently, the jewelry market consists of three primary consumer segments:

• Wedding Demand Customers: They mainly purchase traditional jewelry like gold and diamonds for weddings, gifts, and festive occasions.
• Middle-Class Consumers: They make occasional jewelry purchases, but the frequency and quantity are relatively low.
• High-Net-Worth Individuals: They prefer high-value jewelry pieces worth hundreds of thousands to millions of yuan, treating them as financial investments.

From a product perspective, general jewelry remains the market’s backbone. For instance, jadeite benefits from a complete supply chain, from raw stone mining to finished product sales, allowing companies to reduce costs through economies of scale. Some wholesalers have even started offering wholesale prices directly to retail consumers to expand market share. However, the diamond market is showing signs of fatigue, with high prices limiting appreciation potential. Even major diamond producers like De Beers are experiencing record-high inventory levels.

To address young consumers’ limited purchasing power, a new category—lab-grown jewelry—has emerged. These products target millennials and Gen Z consumers with more affordable pricing to satisfy their desire for jewelry. However, professional jewelers do not recommend buying lab-grown gemstones, as they are synthetically produced using chemical elements in a lab, posing potential health risks and offering no investment value. Currently, lab-grown sapphires priced at just a few hundred yuan have raised concerns about quality.

The gold market has shown new investment trends in response to economic shifts. More consumers are adopting a method of financial management by purchasing small gold beans monthly. This approach encourages forced savings while avoiding the large upfront costs of gold bars. Meanwhile, well-funded companies are also investing in paper gold to hedge against potential inflation risks.

In terms of consumer preferences, jadeite remains highly sought after in China. As the hardest variety of jade, it is valued for both its investment potential and perceived health benefits. Hetian jade, though popular, holds lower actual value. While colored gemstones enjoy greater liquidity in international markets, their acceptance in China remains limited. Experts recommend wearing 3-4 carat colored gemstones for daily use, as larger sizes are primarily for investment rather than practicality.

2. How to Find Customers in the Market?

A unique trend in the market is the combination of jewelry and metaphysics. A notable example is Tiffany’s viral “luck-enhancing” campaign on social media. Although not officially initiated by the brand, this marketing strategy generated significant engagement. This trend reflects consumers’ growing demand for cultural value in jewelry and highlights the potential of incorporating traditional cultural elements into modern jewelry marketing.

When purchasing jewelry, experts advise sourcing from reliable channels and seeking professional opinions, especially for high-value items. For colored gemstone investments, larger carat stones are preferable as they hold better appreciation potential. For general consumers, starting with low-barrier products like gold beans and gradually learning about jewelry investment may be a safer approach.

How Can the Jewelry Industry Survive in the Post-Pandemic Era?

1. How Can Popular Jewelry Maintain Its Appeal?

The jewelry retail market has undergone clear channel differentiation. Traditional jewelry counters, though facing operational challenges, remain the preferred choice for ordinary consumers due to trust in brands and perceived security. However, buying gold through wholesale channels can save 80-100 yuan per gram since the products come directly from the source. While this price advantage is evident, it is limited by access to wholesale resources, meaning most consumers still rely on branded retail counters.

International luxury brands are increasingly integrating Chinese traditional cultural elements into their designs. Examples include: Celine’s bag clasps resembling Qing Dynasty longevity bracelets, Louis Vuitton’s monogram pattern echoing Tang Dynasty zitan wood carvings, Cartier’s “Full Bloom” exhibition in Shanghai, showcasing ancient Chinese symbols such as crane motifs and jade cong with modern interpretations.

2. How Can Wholesalers and Source Companies Address Declining Consumer Spending?

Shenzhen’s Shuibei district holds a dominant position in China’s jewelry market. Data shows that 75 out of every 100 pieces of jewelry sold in China originate from this area. In terms of raw material supply, high-quality jade is primarily sourced from Myanmar and Yunnan. However, jade faces cultural acceptance barriers in the international market, as its popularity remains largely confined to the Chinese community, while global consumers lean towards colored gemstones.

A notable trend is the increasing attention toward tourmaline and tanzanite. Cartier’s launch of a high-carat red tourmaline collection signals the potential for substantial appreciation in such colored gemstones. Experts recommend choosing stones of at least 3 carats for investment purposes, as these sizes hold better long-term value.

3. How Can Jewelry Products Adapt to the Growing Lab-Grown Jewelry Market?

The lab-grown jewelry market now includes various categories, such as colored gemstones, diamonds, pearls, and even lab-grown emeralds, rubies, sapphires, and tourmaline. For the average consumer, identifying lab-grown jewelry primarily relies on price, as businesses with integrity clearly label their products as cultivated or synthetic. Although these products have influenced some consumer decisions, their impact on high-net-worth individuals, who prioritize value retention and appreciation, is limited.

A new trend in jewelry consumption is that high-net-worth customers are increasingly viewing jewelry as an investment for the next generation, purchasing gold or colored gemstones each year for their children’s birthdays. Compared to insurance products, this investment method offers room for appreciation and is considered a more forward-thinking wealth management strategy.

In the field of Internet marketing, the jewelry industry has faced severe challenges. For example, when a second-generation jewelry entrepreneur from Shenzhen Shui Bei expanded into the internet business in Hangzhou, excessive investment led to the near-total loss of assets accumulated by previous generations. Nowadays, internet marketing requires significant investments in customer acquisition and operations. The industry saying “buyers will never outplay sellers” reflects the complexity of Internet marketing.

Although the younger generation’s interest in traditional gold jewelry is not as strong as that of the previous generation, gold bracelets and rings, as well as simple gold designs, still receive a positive market response through influencer live streams and metaphysical marketing. It is worth noting that even though gold prices are currently at historical highs, industry insiders still expect further price increases. This price expectation has, to some extent, stimulated consumers’ willingness to purchase.

In online sales for brands like “China Gold,” many consumers believe they can buy at discounted prices, but in reality, the prices are not necessarily cheaper than those in physical stores. This is because internet marketing itself requires significant investment in purchasing traffic, and this cost is eventually passed on to the product price. This demonstrates that, in the jewelry industry, online channels do not necessarily offer a price advantage.

How Can the Jewelry Industry Achieve Results on the Internet?

1. Can Internet-Based Jewelry Sales Really Achieve Results?

In terms of Internet marketing strategies for the jewelry industry, experts believe that short videos are a feasible promotional channel, but high-priced jewelry transactions still primarily rely on physical stores. Mid-range products such as lapis lazuli and crystals are better suited for online sales, while high-value jewelry transactions still require offline transactions.

A jewelry wholesale company that has been in business for 13 years shared its development story. In 2017, it acquired more than 200 stores nationwide. The success of this traditional business model is attributed to long-term accumulation of customer resources. In recent years, platforms like Xiaohongshu have seen a surge in second-hand jewelry transactions, with some cash-strapped sellers offering jewelry at low prices, while buyers purchase and reprocess it for resale at higher prices, creating a unique market ecosystem.

In customer relationship management, each company has its own methods and strategies. Luxury brand customer care generally includes three core elements: emotional maintenance, design philosophy communication, and professional knowledge sharing. Emotional maintenance involves regular communication, event invitations, and special gifts; design philosophy concerns brand culture dissemination; and professional knowledge includes introducing products and analyzing appreciation prospects. In 2025, the trend indicates that hosting various salon events will be a key focus.

From a product strategy perspective, experienced operators prefer to focus on general jewelry products. This is because, out of 100 consumers, only 10%-20% will choose to purchase designer jewelry. This phenomenon creates a paradox: while designer pieces gain more attention and spread more easily on the internet, the majority of jewelry sales come from more common items.

Since the pandemic, the market environment has changed significantly. Starting in 2021, businesses have been hosting various events to promote sales, but by the second half of 2024, even events are struggling to stimulate consumption. Real buyers, who have purchasing power, will buy regardless of the events, and these events now mainly serve to drive traffic and increase sales opportunities.

2. Can Personal Jewelry IP Truly Add Value in the Post-Pandemic Era?

In the high-end market, the “circle effect” is especially significant. When a customer purchases jewelry worth millions of yuan at once, they experience firsthand the importance of belonging to an exclusive circle. Maintaining high-net-worth customers is extremely complex and requires substantial resources. Taking Shanghai as an example, high-end shopping districts like Hang Lung and IFC are staffed with dedicated personnel to provide comprehensive services, from event participation and luxury item selection to personal matters.

Customer maintenance for brands mainly involves regular WeChat communication, customized gifts for holidays, and event invitations. Some also carefully facilitate business connections among clients. This type of maintenance is labor-intensive and requires salespeople to have comprehensive skills. Industry insiders lament that while the job may appear glamorous, it consumes significant energy dealing with personal relations.

As an important jewelry industry hub in China, Shenzhen enjoys significant geographical advantages. It not only hosts large clothing and jewelry wholesale businesses but also boasts convenient international logistics conditions. The presence of multiple ports makes import-export trade very convenient, and during the pandemic, some international logistics companies even profited considerably. This industry cluster effect and logistics advantage make Shenzhen one of the best cities for developing the jewelry industry.

PS: The translation is done by AI.