For a dozen years through 2013, China’s market for gold jewelry soared by around 450%. In the three years through 2016, the market dropped by a third, before picking up last year. For gold miners and traders this is a big deal. China accounts for about 30% of global demand in the gold jewelry market.
Gold prices tumbled in 2013, with the result that China’s jewelry market demand rose from 600 metric tons (tonnes) to over 900 tonnes in 2014. Since then, demand had fallen to around 610 tonnes in 2016, before rising to around 640 tonnes last year.
The World Gold Council (WGC) reported the data Thursday in a new report on China’s market for gold jewelry: “China’s jewellery market – quietly improving.”
In a recent survey, the WGC asked Chinese women how they would spend 5,000 yuan (about $780) on jewelry. In the largest (tier 1) cities, 18% would buy gold jewelry, while 14% would buy diamond jewelry and 15% would purchase platinum. In the smaller (tiers 3 and 4) cities, 24% of women would buy gold, with just 8% choosing platinum and 12% choosing diamond jewelry.
Among 18- to 25-year-olds, only 9% would spend their 5,000 yuan on gold jewelry, compared to 31% who said they would purchase smartphones or wearable technology products. Among women older than 26, nearly a quarter (24%) would buy gold compared with 23% who would spend the money on designer fashions and 20% who would buy technology products.
The Chinese market is growing by improving its product offerings. This typically means making less 24-carat expensive gold jewelry and more 18- and 22-carat jewelry that is less expensive and more fashionable. 18-carat gold mixed with copper (so-called rose-gold) is very popular.
Another growth driver is online showrooms. About a third of jewelry buyers search online for what they want but only about 4% actually complete the purchase online. Jewelers have absorbed the marketing message here and use their online stores to drive customers to their brick-and-mortar shops.
The WGC’s report on Chinese jewelry sales is available at the organization’s website.