This article first appeared in the JNA September/October 2024 issue.

Despite ongoing economic challenges and an overall downturn in China’s gold jewellery market, 24-karat gold jewellery has become a highly sought-after product, thanks to its value preservation attributes and innovative designs. According to the latest Gold Demand Trends report of the World Gold Council (WGC), sales of 24-karat gold products in China outperformed all other categories during the first half of 2024 while lightweight and affordable gold items are also gaining traction.

Market appetite for such products was prevalent amid sluggish demand for gold. The same WGC report said China recorded a 35 per cent year-on-year decline in gold jewellery demand during the second quarter of 2024 – the weakest result for a Q2 since 2009 – as economic woes weighed down on consumer sentiment and fuelled high levels of “willingness to save.” Jewellers are similarly redirecting their resources to promoting higher-margin, gem-set products with intricate designs to boost profits, added WGC.

Roland Wang, regional CEO of WGC China, explained, “The sharp decline in gold jewellery consumption in the second quarter of the year is not a ‘Chinese specialty.’ Major gold jewellery markets such as India, the Middle East, the US and Europe all recorded declines in varying degrees due to historically high gold prices.”

Data from WGC showed that gold prices reached a record high of US$2,529.75 per ounce as of August 20, 2024.

Resilient 24K gold

According to Chinese jewellery manufacturers interviewed by JNA, 24-karat gold has captured the hearts of consumers who view gold jewellery as more than just an adornment but as a savings tool, which by tradition, is a usual practice among the Chinese.

“The volume of 24-karat gold jewellery that we processed in the first half of 2024 nearly matched our total volume in 2023,” said Joyce Zhang, managing director of Shenzhen Jinruibao Jewelry Co Ltd. “According to our clients, gold jewellery can be worn every day, sold any time if needed or easily redesigned. Customers are drawn to the versatility and value of gold.”

The company’s main clientele are jewellery chain stores, regional retailers and top designer brands on e-commerce platforms in China.

Reed Zhu, founder of Shenzhen Shangpin Gold Jewelry Co Ltd, agreed. He noted that a growing number of Chinese consumers prefer pure gold rings over diamond rings amid a soft diamond market.

Innovative designs

Lack of product diversity is a common challenge for jewellers in China. Hence, offering unique jewellery pieces is critical to set them apart from the competition. With advancements in technology, manufacturers can now produce 24-karat gold jewellery in more diverse designs using 3D and 5D hard gold. This opened doors to new levels of creativity.

3D hard gold jewellery is significantly lighter than traditional gold, making it more comfortable to wear while its increased hardness allows for gem-setting. On the other hand, 5D hard gold, which is viewed as an upgraded version of 3D hard gold, is even lighter and more durable with a polished finish.

Zhang of Jinruibao, which specialises in manufacturing hard gold jewellery using 3D printing technology, said 24-karat gold jewellery featuring pearls or diamonds is gaining steam in the market, driven by solid demand from young buyers. She noted, “In particular, those adorned with pearls in smaller designs or European styles are
moving fast.”

Floral-inspired bridal collections are likewise favoured by buyers. Jinruibao has a gold collection showcasing a variety of flowers such as orchids and camellias, to name a few.

“People love the elegant and intricate floral motif, especially those that carry auspicious meanings. These designs are popular among Chinese buyers,” added Zhang.

Meanwhile, colourful gold jewellery, while not as popular in the market, is quite promising as demand for fashion-forward designs grows among younger consumers, shared Zhu of Shangpin Gold.

“Targeting a younger demographic with a taste for aesthetics and quality, we specialise in crafting 5D gold jewellery with colourful enamel and gemstones in modern designs that can be worn daily and matched with various outfits," continued Zhu.

With a focus on producing original designs of 24-karat gold jewellery, Shangpin Gold employs a team of 10 in-house designers. Its manufacturing facility has a monthly output of 300 to 400 new designs, which are promptly launched in the market to sustain the company’s competitive edge.

Further showcasing the versatility of gold jewellery, Shenzhen Yijiu Jewelry Co Ltd offers 5D gold jewellery adorned with coloured gemstones. The company has rolled out collections featuring peridots, carnelians, aquamarines and tsavorites, among others. Its latest gold and turquoise jewellery collection was launched this year.

“We specialise in gem-setting and we use this expertise to incorporate gemstones in 5D hard gold jewellery,” said Rhea Zou, the company’s head of Product Development. “Our collection of coloured gemstone gold jewellery is affordable and visually striking, meeting the current demand for versatile pieces that are suitable for various occasions.”

Future of gold

Looking ahead, opportunities still abound for gold jewellery in China amid uncertainties.

WGC is maintaining a cautiously optimistic outlook on demand for gold retail and investment in the Chinese market. Although seasonal demand in the fourth quarter could provide some support, fragile consumer sentiment and possible further increases in gold price are likely to keep demand subdued, according to WGC.

“Faced with the impact of a new round of scientific and technological revolution and industrial transformation, consumer habits are undergoing rapid changes,” said Wang of WGC. “Therefore, the gold jewellery industry needs to embrace new production capabilities, adjust business models and development approaches, focusing on segmented markets and demand for differentiated products.”

To stand out in a competitive market, Chinese jewellery manufacturers are prioritising design and quality, supported by strong manufacturing capabilities. They are also keen to explore overseas opportunities by participating in international jewellery exhibitions to expand their global presence.

“In addition to simple everyday styles, we excel in bolder, more elaborate fine jewellery designs. These pieces closely align with Western consumers’ preferences. We are also seeing solid interest from Malaysia, Singapore, the Philippines and Dubai,” Zhu of Shangbin Gold said.

For her part, Zuo of Yijiu said the line between Chinese and Westernised craftsmanship is diminishing, which could bode well for local jewellers. “Additionally, Chinese manufacturers regularly and swiftly roll out new styles. We hope to continuously introduce our products to overseas markets through jewellery shows.”