According to Retail News Asia, the Chinese jewelry industry is in the midst of a major recovery in the second quarter of 2020. Manufacturers have experienced higher volumes of demand especially for new types of materials such as platinum.
Platinum and other gems are the new Oro in China
Platinum jewelry manufacturers reported higher demand volumes from April to May following a significant level of purchases of platinum supplies. Despite the Covid-19 crisis, in May, platinum manufacturing volume had returned to a level on par with the same period last year.
After the reopening, retailers saw a gradual increase in business volume with some platinum jewelry sales reaching around 80% more than the same period last year.
The record low platinum price made platinum an attractive substitute for gold, offering better profit margins and better curves.
In the jewelry industry in China, gold products have always been the most popular category and accounted for more than half of the industry’s revenue, followed by diamonds, jade and silver.
However, in recent years, gold jewelry has faced stiff competition from gems or other jewelry products in top tier cities.
Platinum and heat-treated alloys allow refined contours in the designs, better polishing, better shape retention and greater scratch resistance.
These innovations are expected to allow platinum to gain a more competitive market position in the jewelry space.
Chow Tai Fook and other players are meeting the demand
To meet the demand of the Chinese market, many companies including Chow Tai Fook, an Hong Kong based company, have incorporated new materials, including glazes, which add color and novelty, to their collections (Frozen II by Chow Tai Fook).
Other players have started to enter or re-enter the jewelry industry, leading to a growing interest in the manufacture of platinum and other gems.
New players in the gem industry and gold retail have started to transport platinum. For example, Shining House, which is a newcomer to platinum gemstone jewelry, now transports platinum to 100 of its more than 300 stores in central and eastern China.
The growth of the middle and upper classes, and urbanization, remain strong and are also expected to improve jewelry market conditions in the next few years.
To stay in step with the times, however, companies must absolutely keep up to date on changes in the Chinese market.
Jewelry market in China: An increasingly digitalized market
Given the digitization of this market in recent years, being present on Chinese digital channels is an excellent step to be successful in this growing market.
The rapid increase in e-commerce in China has forced traditional retailers to focus on the unique qualities of shopping, leading to the development of integrated multi-channel sales strategies, in which online stores and platforms complement each other.
However, both for big and small companies, with or without a presence in the Chinese market, what is necessary in China is BRANDING. Before to open an online store on this platform, brands should focus on branding and e-reputation as it is essential in China to sell products.
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