Gold shining brightly

As Chinese jewellery retailers shook off the pandemic, many strode into 2023 with strong expectations. But the recovery has been bumpy. In the face of economic uncertainties and the record-level renminbi (RMB) gold price, understanding current trends and future possibilities is fundamental to jewellers’ businesses. We have partnered with China Gold News to produce the 2023 edition of our annual Chinese jewellery market insights. The main findings include: 

  • Relatively strong sales performances have led to a rising dominance of gold products in retailer inventories
  • Heritage, Hard-Pure and mass-appeal gold jewellery products contributed the most to retailer margins; these products make up the majority of inventories
  • Lighter products gained traction; their pricing structures are becoming more transparent 
  • While most retailers believe gold jewellery markets in their regions may have reached saturation, some – mainly from high-tier cities – see potential.

2023 Chinese jewellery market insights 

Chinese jewellery retailers have expressed mixed feelings so far in 2023. Follow the end of pandemic restrictions, 2023 has seen improved gold jewellery demand compared to 2022. Our Gold Demand Trends report shows a 17% y/y rebound in China’s gold jewellery consumption in H1 (328t). The post-pandemic economic revival was the major contributor. 

But the recovery story is not all roses. Many retailers told us that sales fell off a cliff after the International Women’s Day in March. Our data also indicates a stark q/q drop in Q2 (-37%). The weaker-than-expected economic recovery, a record-high RMB gold price and seasonality drove this decline.

Structural changes are also of concern to retailers. For instance, changes in product pricing models and consumer purchasing motivations became a double-edged sword for many. And as product popularity shifts, retailer inventories must adapt.

The economic recovery remains uncertain. This, together with the structural trends mentioned above may present challenges to gold jewellery demand. It will be crucial for retailers to be aware of the latest and key market trends if they are to identify and pre-empt opportunities.

Against this backdrop we undertook the fourth annual Chinese jewellery retailer survey in cooperation with China Gold News. To capture a comprehensive picture, we collected 538 validated responses from jewellery retail shop managers and regional market directors at both national chains and local brands in 76 cities located within 21 different provinces (Chart 1).

Fieldwork took place between July and August 2023 via both online questionnaires and face-to-face interviews. Our random sample includes stores in malls (57%) as well as those on streets (43%), reflecting the current divide in the market and mitigating possible biases arising from store types.


Chart 1: The 2023 survey covered 538 market participants from 76 cities


Chinese Jewellery Market Insights: Chart 1

Sources: China Gold News, World Gold Council; Disclaimer

Gold’s dominance rises further

Gold continues to dominate Chinese jewellery retailer inventories (Chart 2). Retailers told us that gold products account for 67% of their inventories as of H1 2023, a notable pick up from 2021 (52%) when we last tracked retailer inventory composition.1 This is followed by diamond products, which make up 17% of retailer inventories, a lower level than 2021.


Chart 2: Gold’s dominance in retailers’ inventories rose further


Chinese Jewellery Market Insights: Chart 2

Inventory share by category (in value)*

Sources: China Gold News, World Gold Council; Disclaimer

*Gold products include 24K and plain 18K and 22K jewellery and investment items. In 2021, we only tracked gold, diamond and other product inventories. Of the gold products in 2023, 85% are gold jewellery.

This is closely related to the outperformance of gold compared to other product categories. Most respondents told us that they have witnessed growth in gold product sales compared to 2022 and pre-pandemic 2019 (Chart 3). This is followed by gem, pearl and other jewellery products, reflecting their increasing allure to consumers.2 Only a few retailers experienced growth in diamond and platinum product sales, which partially explains the declining share of these items in their inventories.


Chart 3: Gold products significantly outperformed other categories


Chinese Jewellery Market Insights: Chart 3

Q: Compared to 2019 and 2022, have you seen a sharp/modest increase in sales revenue during H1 2023?

Sources: China Gold News, World Gold Council; Disclaimer

The popularity of gold products is mainly driven by gold’s unique dual nature as an everyday accessory and a financial asset that stores value. As the RMB has depreciated and other local assets have performed poorly, Chinese consumers and investors have paid more attention to gold as a means of value preservation, especially as their tendency to save has remained elevated around its record high.3 Following a strong 2022 (+10%), gold’s performance in local currency has capped another 12% gain so far in 2023, dwarfing other assets.4 These factors, combined with the younger generation’s increasing awareness of wealth management, have underpinned the rising popularity of gold products among consumers and in retailer inventories.5

And when asked about their expectations of future inventory adjustments, most retailers see further growth for gold (Chart 4). But the inventory shares of diamond and platinum products may trend lower. It is also worth noting that the soaring popularity and recent tightening in supplies of coloured gem and pearl products has caused 21% of our respondents to plan to stock up more on these products.


Chart 4: Retailers see further dominance of gold in their inventories


Chinese Jewellery Market Insights: Chart 4

Red: % of total sample that plan to increase their inventory

Green: % of total sample that plan to decrease their inventory

Sources: China Gold News, World Gold Council; Disclaimer

Heritage and Hard-Pure gold: shining brightly

Turning to gold-specific product ranges, Heritage gold jewellery is the largest category in retailer inventories, accounting for nearly 28% of the total (Chart 5). And mass-appeal products maintain a significant share at 24%. As its popularity rocketed, Hard-Pure (24K) gold jewellery has also held a crucial place in inventories, at 23% .6 

The rise of “Guochao” – as noted in our previously reports – has been a major driver of Heritage gold’s popularity. According to JD Research, the number of “Guochao” consumers increased by 74% between 2019 and 2022 while related consumption surged by 335%.7 Innovations from the industry, such as lightweight Heritage gold jewellery with different gem inlays, sustained vitality in this product range.


Chart 5: Retailer gold inventories mainly consist of Heritage, mass-appeal and Hard-Pure products


Chinese Jewellery Market Insights: Chart 5

Gold product inventory share (by value)

Sources: China Gold News, World Gold Council; Disclaimer

Hard-Pure gold jewellery is a relative newcomer, relative to other products. The enhanced hardness of these 24K items enables greater flexibility in product design and attracts fashion-savvy young consumers. Furthermore, the combination of 24K fineness and intricate design has won over many 18K and 22K gold jewellery consumers. As the RMB gold price reached record levels, the affordability of these lightweight products further increased their allure to consumers.


Chart 6: Sales of Heritage and Hard-Pure gold products were outstanding


Chinese Jewellery Market Insights: Chart 6

Q: Compared to 2019 and 2022, have you seen a sharp/modest increase in sales revenue during H1 2023?

Sources: China Gold News, World Gold Council; Disclaimer

Mass-appeal gold jewellery products have been and are likely to remain a key component of most retailer inventories. After all, traditional consumers make up a large proportion of China’s gold jewellery market – and whether their motivation is buying for good luck or investment purposes, they prefer simple products with reasonable labour charges. And we believe the industry’s efforts to innovate and upgrade traditional mass-appeal product design has also helped improve attractiveness.

The inventory composition reflects the sales performance of these different gold jewellery products shown in Chart 6. In general, sales of Heritage, Hard-Pure and mass-appeal gold jewellery products outperformed other categories. 

Chart 7 provides another explanation for retailers’ decisions about gold product inventory shares. Due to their stylish designs and affordability, Hard-Pure gold products contribute the most to retailer profit margins. Heritage gold jewellery items are a close second. But their price competition is becoming fiercer as this niche market gradually reaches saturation, potentially putting downward pressure on product margins. 

It is obvious in Chart 7 that new products bring the most profit. The outperformance of both Heritage and Hard-Pure gold jewellery have both outperformed other products in sales and profitability proves that product innovation is key to unlocking the potential for growth.


Chart 7: Innovative products bring the most profit


Chinese Jewellery Market Insights: Chart 7

Q: Rank gold products’ margin contribution from 0 (lowest) to 10*

Sources: China Gold News, World Gold Council; Disclaimer

*Based on average scores of our sample.

Lighter and cheaper products are more popular

The surging local gold price, combined with an uncertain economic recovery, led many consumers to cut their gold jewellery budgets. Our survey results show that products lighter than 10 grams have made the largest contribution to H1 revenue for retailers (Chart 8). Since lighter products naturally have a lower per-unit ticket price, we can draw the conclusion that they have a notably higher turnover ratio than heavier ones.


Chart 8: Lighter products contributed the most to retailer revenue


Chinese Jewellery Market Insights: Chart 8

Gold revenue contribution by product weight

Sources: China Gold News, World Gold Council; Disclaimer

Similarly, over 35% of retailer revenue comes from products selling for under RMB2,000; this is the most popular price range (Chart 9). Products ranging from RMB2,000 to RMB5,000 make up another major category, accounting for 28% of sales. Compared to 2022, we can see that consumer preference is shifting to cheaper products. The share of products with unit-total prices below RMB2,000 jumped from 18% in 2022 to this year’s 35%, while the contribution from more expensive ones (between RMB2,000 to RMB10,000) fell. 

Other than affordability, we believe industry innovation has played a vital role in the rising popularity of lightweight products. By combining various gems with these items and constantly upgrading designs, the industry has successfully grabbed the attention of the younger consumer.


Chart 9: Low-cost products are increasing in popularity


Chinese Jewellery Market Insights: Chart 9

Sales contribution of different unit-price products

Sources: China Gold News, World Gold Council; Disclaimer

Analysis of sales by city-tier provides interesting results (Chart 10). We see similar trends overall: low unit-price products contribute the most to retailer sales. But gold jewellery items costing more than RMB10,000 are more popular in first- and fourth-or-lower-tier cities than they are in others. The strong economic growth in first-tier cities provides support for expensive product sales. And consumers in fourth- or lower-tier-cities usually favour items that are high carat with low labour charges, as this satisfies their investment motivation.


Chart 10: While most cities share similar trends, differences exist


Chinese Jewellery Market Insights: Chart 10

Revenue contribution by gold product price in different cities

Sources: China Gold News, World Gold Council; Disclaimer

The shift in pricing models: towards a more transparent future

The retailer inventory share of per-gram priced products is rising. Survey results show that 66% of gold inventories are made up of per-gram priced products while the rest are priced per-piece. Compared to 2021, it is obvious that the per-gram pricing model is being increasingly adopted by retailers (Chart 11). 

The price of a 24K gold jewellery product includes:

  • the labour charge 
  • the cost of the gold, based on weight and the store’s gold price, which is often higher than the Shanghai Benchmark Gold Price as it includes other expenses such as store rent and brand premium. 


Chart 11: Retailers are increasingly adopting the per-gram pricing model


Chinese Jewellery Market Insights: Chart 11

Gold product inventory by pricing models

Sources: China Gold News, World Gold Council; Disclaimer

But nowadays more and more young consumers demand higher pricing transparency. As we mentioned in a previous report, younger consumers tend to research products before making a purchase decision. And vagueness in pricing is exactly what they are trying to avoid. And the per-gram pricing model has the advantage of making costs clear to these customers. 

The industry has made strides towards a healthy and sustainable future by increasing its pricing transparency. Our survey results show that 52% of Hard-Pure gold products are per-gram priced (Chart 12).


Chart 12: More than half of Hard-Pure gold products are sold with clear pricing structures


Chinese Jewellery Market Insights: Chart 12

Pricing methods used for Hard-Pure gold products

Sources: China Gold News, World Gold Council; Disclaimer

Looking ahead, 57% of our survey respondents say that they will increase the use of per-gram pricing method to offer consumers more clarity. This is a notable improvement on the 43% recorded in 2021. We believe a transparent price presentation, reasonable labour charges and designs that meet consumer taste will benefit both consumers and retailers.


Chart 13: More and more retailers are increasing transparency in pricing


Chinese Jewellery Market Insights: Chart 13

Q: How would you adjust your product pricing methods going forward?

Sources: China Gold News, World Gold Council; Disclaimer

In our view, offering consumers greater pricing transparency by specifying weight and labour charges is the best way to gain their trust. Various surveys have pointed out that young consumers, driven by self-indulgent consumption, are economical – always practical in purchasing necessities – but at the same time they are openhanded – willing to pay for premium products that suit their tastes.8

Has China’s gold jewellery market reached saturation?

Major Chinese gold jewellers have been expanding rapidly over recent years. Based on available data from the annual reports of listed jewellery companies, their point of sales (POS) expansion has averaged 17% per year over the past five years (Chart 14). And the pace remained elevated even during the pandemic, averaging 18% per year between 2020 and 2022.


Chart 14: Chinese jewellers are expanding their point of sales*


Chinese Jewellery Market Insights: Chart 14

Sources: Company Filings, World Gold Council; Disclaimer

*Based on listed companies with public annual reports for the past five years.

As China’s gold jewellery consumption has contracted over recent years, mainly due to the local economic downturn and the pandemic, the question naturally follows: is there still room for expansion? 

The answer is, “limited…but yes” (Chart 15). Survey results show 73% of our respondents believe that their cities already have enough gold jewellery retail stores, or even have too many. But the remaining 27% think there is still room for more.


Chart 15: While the majority believe there is no room for expansion, some disagree


Chinese Jewellery Market Insights: Chart 15

Has gold jewellery market in your region reached saturation?

Sources: China Gold News, World Gold Council; Disclaimer

Interestingly, most of the retailers who believe there is still room for more gold jewellery stores are in high-tier cities where competition is fierce. This is likely driven by retailers’ optimistic expectations of economic growth in high-tier cities as well as the fierce competition itself, which constantly weeds out poorly performing shops and leaves opportunities for upcomers. 

Most retailers who plan to expand want to open stores in large commercial complexes (Chart 16). This has been the top choice for retailer expansion in recent years. They know that young consumers are more likely to spend their money and time in commercial complexes with their various entertainment and dining options. 

They also told us that stores between 100m2 and 1,000m2 are the choice should they decide to expand (Chart 17). But relative to others, retailers from high-tier cities are more likely to open smaller shops (<100m2). We believe this is mainly due to cost, as rent and employee salaries are higher in large cities than in other regions.


Chart 16: Large commercial complexes are the favourite expansion option for retailers


Chinese Jewellery Market Insights: Chart 16

Where would you go for expansion?

Sources: China Gold News, World Gold Council; Disclaimer


Chart 17: Stores between 100m2 and 1,000m2 are the popular expansion choice


Chinese Jewellery Market Insights: Chart 17

Which store size would you choose for expansion?

Sources: China Gold News, World Gold Council; Disclaimer


With pandemic-related restrictions confined to the past, 2023 has – so far – been a year of optimistic expectation. Our data showed a double-digit y/y recovery in gold jewellery consumption during the first half and, more recently, festivals and major jewellery industry events have brought vitality back to the sector. But the relatively tepid Q2 sales are a concern and the future remains uncertain to many. Our survey aims to offer insights on recent trends to local retailers looking to define their strategic business plans and help shape a better future for the industry. 

In 2023, we found that gold products’ dominance in retailers’ inventories rose further compared to previous years, with heritage gold and Hard-Pure products accounting for the lion’s share and contributing the most to profits. 

Meanwhile, consumer preferences have shifted. The surging local gold price, together with manufacturers’ innovations, have encouraged consumers to favour cheaper and lighter products. Encouragingly, against this backdrop, retailers are offering increasing transparency in pricing to consumers, especially for Hard Pure gold products. 

And it is interesting to observe that, while the majority of retailers agree that gold jewellery markets in their regions have reached saturation or over-saturation, some believe there is still opportunity for growth. And most of these optimists are from high-tier cities where competition is fierce. 

We believe that a healthy and sustainable jewellery market should offer consumers abundant product choices and high pricing transparency. While gold’s domination in China’s jewellery market rises further, other categories are indispensable to a robust ecosystem.

1We track retailers' inventory compositions every other year.

2For more, see:价格狂飙,甚至翻倍!有人不到1年赚40万元…(sohu.com)

3For more, see: Urban Household Savings (pbc.gov.cn)

4Based on the Shanghai Gold Exchange AU9999’s performance during the first eight months of 2023.

5For more, see: 年轻人的财富管理:买理财攒金豆都很“香”|理财新浪科技_新浪网 (sina.com.cn)

6Hard-Pure gold jewellery refers to 24K products with greater hardness and lighter weights than traditional ones. For definitions of different gold jewellery categories, see; 2021 Chinese gold jewellery market insights: mainstream, younger and more transparent | World Gold Council

7For more, see: 京东《2023中国品牌发展趋势报告》

82022中国兴趣消费白皮书:近七成新青年愿意为产品溢价买单 (zgswcn.com); 艾媒咨询|2022年中国兴趣消费趋势洞察白皮书(附下载)-艾媒网 (iimedia.cn); 埃森哲2022中国消费者洞察 | Accenture

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