Emerging trends such as increased spending from younger clients, more transparent product pricing and gold’s continued popularity among consumers are pointing to stronger growth in China’s gold jewellery market.

These are the findings of the 2021 Chinese gold jewellery market insights by the World Gold Council and China Gold News, which surveyed more than 500 Chinese jewellery retailers in over 20 cities in June this year. 

According to the study, China’s gold jewellery consumption is influenced by gold price volatility, weddings, disposable income and the Covid-19 pandemic. 

Gold jewellery demand in China rose 122 per cent year on year in the first half of 2021, buoyed by strong economic recovery and a 12 per cent year-on-year growth in disposable income, which bolstered consumer spending on discretionary items such as gold jewellery. Festivals as well as government efforts to fuel local consumption have also boded well for the jewellery business.

The study further revealed that retailers mainly sell gold products, which make up 52 per cent of respondents’ inventories. Gold dominates inventories, thanks to its liquidity, which translates to higher turnover and lower costs than other categories. Gold is also historically significant in China.

“This dominance of gold products is likely to continue in the future,” the survey noted, adding that 57 per cent of respondents intend to increase their gold product inventory in the next one or two years. 

The study also discussed the increasing fame of heritage gold, which accounted for 16.7 per cent of retailers’ gold inventories. The “Guochao” trend of embedding Chinese culture in jewellery designs is driving demand for heritage pieces. Younger buyers, in turn, are the force behind Guochao’s rise to prominence.

Other key findings pertain to the return of a more transparent per-gram pricing instead of per-piece; younger consumers spending more on gold jewellery compared to pre-pandemic days; and enhanced investment in marketing initiatives.

“The likelihood that the gold price will remain within reach of most consumers, the expectation that household incomes will grow, the stable economic outlook for China’s economy and continuing domestic consumption stimulation, will all bode well for China’s gold jewellery demand and unlock greater opportunity for local retailers,” the study noted.