China’s jewellery market:

new perspectives on consumer behaviour

About the World Gold Council Contents
The World Gold Council is the market development Section 1 04
organisation for the gold industry. Our purpose is to
Gold dominates the jewellery market,
stimulate and sustain demand for gold, provide industry
but it faces challenges
leadership, and be the global authority on the gold market.
We develop gold-backed solutions, services and products, Section 2 10
based on authoritative market insight and we work with a
The purchase journey and the role
range of partners to put our ideas into action. As a result,
of digital and influencers
we create structural shifts in demand for gold across key
market sectors. We provide insights into the international
Section 3 18
gold markets, helping people to understand the wealth
preservation qualities of gold and its role in meeting the What consumers look for when buying
social and environmental needs of society. jewellery and luxury fashion
Based in the UK, with operations in India, the Far East and the
Section 4 22
US, the World Gold Council is an association whose members
comprise the world’s leading gold mining companies. Strategies for growth

For more information

Please contact:
Roland Wang Gerry Chen
roland.wang@gold.org gerry.chen@gold.org
+86 10 8592 5088 +86 21 2226 1111

Methodology overview:
The World Gold Council commissioned market research in the world’s major jewellery markets: China, India and the US. To provide an in-depth understanding of the
gold market, KANTAR TNS conducted a two-phase study involving qualitative and quantitative research. In China, the first phase consisted of a qualitative online diary
(Shanghai, Shenyang and Weifang) and focus groups (Shanghai, Weifang) with women aged 22 - 55 (a mix of considerers/non-considerers of gold jewellery). The
second phase was a quantitative survey amongst 2,000 females aged 18-65, living in city tiers 1 - 4 who are non-rejecters of jewellery and purchased and/or received
jewellery or a designer/luxury item in the past 12 months. The study used proprietary Matrix methodology to identify the different types of consumer, their needs and
how the gold industry can respond to create mutual value. The qualitative fieldwork was conducted in October 2015 and the qualitative fieldwork in March 2016.

China’s jewellery market | New perspectives on consumer behaviour 02

Foreword
China has gone through remarkable within the jewellery and luxury fashion
change in the past 30 years. Within market, highlighting differences in
one generation, the shape of our attitudes across cities and generations.
economy has altered beyond all
It also identifies opportunities to help
recognition: agriculture’s share of
the industry grow. Gold jewellery
output has fallen and the service
performs well in meeting consumer
sector has become an important driver
needs around value tradition and
of growth; millions of people have
connect, and the industry should
migrated from the countryside to big
build on this strength. But it should
cities; and we have become richer,
also explore how it can build brands
with income per capita increasing by
which resonate with consumers
almost 700% between 1995 and 2015.
around other needs, such as reward
Roland Wang
Amidst this change, a new generation and assert success. Retailers
Managing Director,
of consumers has emerged. China is should also explore ways to develop
China
a world leader in online sales, and it is seamless online strategies, especially
expected that by 2018 20% of all retail to target the all-important millennials
sales will be online. But consumer – the next generation of gold
tastes are evolving and people are consumers.
increasingly looking for experiences
3.6m new millionaires in I hope our insights help the industry
to make their lives richer: international
China in 2015, growing at travel, for example, is a signal of status,
think creatively about how to adapt
and grow, and I welcome the
twice the rate of the US and outbound tourism has ballooned
opportunity to discuss these issues
Boston Consulting Group
in recent years, from less than 20m
in more detail with manufacturers,
tourists per annum in the early 2000s
retailers and trade bodies.
to over 100m in recent years.
More iPhones were sold
in China than the US The gold industry must adapt to this
evolving consumer landscape.
for the first time
Kantar Futures Company, This report aims to share insights on
Global MONITOR Survey, 2015 consumers’ attitudes towards gold Yours, Roland Wang

China’s jewellery market | New perspectives on consumer behaviour 03

Section 1
Gold dominates the jewellery
market, but it faces challenges

China’s jewellery market | New perspectives on consumer behaviour 04

Gold dominates but its
relevance is being challenged

Gold epitomises Chinese tradition.
Currently dominating the jewellery
market, gold is seen as a conduit
for positive wishes to others,
especially within the family, as well
as representing both financial and
spiritual protection.
But China is undergoing vast changes.
As a fast growing economy, it displays
dynamic and optimistic attitudes to
wealth and wealth creation.
Within this environment of change,
the cultural meaning of gold is also
evolving. Historically, gold seals
were used by the Emperor to signify
authority, with nobles using gold
objects to show their wealth. Today
there is a democratisation of gold, I wear yellow gold when
as it appears everywhere from
shoes to facemasks.
I want to look elegant and
poised, for example at a
Traditional associations are still
strong, but gold’s relevance is being work gala. Wearing this
challenged by modern consumers’ means I care about tradition,
desire for exclusivity and individuality,
I can be trusted.
shown through the increased demand
for platinum and diamond jewellery. Shanghai, millennial
This trend is replicated in other product
categories, with traditional strongholds
being threatened by newer entrants. My dream is to retire at
For example, traditional teahouses
being challenged by recently launched the age of 45, and then to
brands like Starbucks, baijiu losing enjoy life without having
ground to Western spirits, and
to give a second thought
premium fashion increasingly being
defined by international brands newer to my spending.
to the market. Shanghai, millennial

While gold currently dominates the jewellery market,

purchase intent indicates that it is under pressure

% own % last 12 month % next 12 month

purchase purchase intent

Gold 70 50 35

Platinum 51 32 25

Diamond 45 27 27

China’s jewellery market | New perspectives on consumer behaviour 05

 Diamond and platinum are becoming strong competitors
in Tier 1 cities
% own

71
63 61

Gold Platinum Diamond

China’s jewellery market | New perspectives on consumer behaviour 06

Consumers’ views on jewellery
differ across different tier cities

Diamond and platinum are becoming strong competitors in Tier 1 cities, While gold jewellery ownership and
but gold leads the market in Tier 2, 3 & 4 cities purchasing are largely consistent
across cities, platinum and diamond
purchases are making in-roads in
Gold Platinum Diamond Tier 1 cities, with much higher
levels of ownership and purchases
Tier 1 than in lower-tier cities. Increasing
% own 71 63 61 aspiration for luxury goods across the
emerging middle classes in China
% bought in has revealed a potential future threat.
last 12 months 56 46 43 Gold’s ubiquity and its traditional
associations weaken the aspiration
to buy gold jewellery compared with
Tier 2
more luxurious and exclusive items,
% own 67 51 48
like diamond and platinum, especially
in Tier 1 cities.
% bought in
last 12 months 48 34 27 This greater aspiration for platinum
and diamond jewellery could put gold
Tier 3/4 under increasing pressure if Tiers
% own 70 46 37 2/3/4 evolve within this influence. This
potential threat highlights the need for
gold jewellery to increase its appeal
% bought in
49 27 21 and stay relevant, especially with
last 12 months
younger generations.
Aspiration to buy other jewellery products is high among Tier 1 consumers
% of women who would chose each product if given RMB 5,000

Tier 1
18 14 15

Tier 2
19 8 12

Tier 3/4
24 8 12
China’s jewellery market | New perspectives on consumer behaviour 07
Millennials have a different perspective on
jewellery and luxury fashion than their elders

A feature of China’s cultural evolution is
the shift from a collective society into
one which permits and encourages
the discovery and expression of
the individual. This is particularly
pronounced amongst millennials.
Millennials crave exclusive
indulgences. They desire social
acceptance and want to stay
relevant, while still displaying their
individuality. Core to this segment is
their ‘always on’, connected lifestyle. Millennials live in a world
With smartphones and social media,
with 97% mobile cellular
experiences are always shared.
penetration, 10x more
Increasing the appeal of gold jewellery
than in 2000
and making it relevant to this audience
PEW, Forbes.com
is vital for the industry to grow.
There is an opportunity to update the
meaning of gold to help it compete
with other luxury goods and become
more relevant to millennials.

Gold must compete with technology and fashion to appeal to millennials

% would choose to buy each item if given RMB 5,000
Young Millennials 18-25 yrs I feel that yellow gold
is for women over 40 years,
while platinum is for 30
9 13 22 31 year olds… I will choose
yellow gold to wear only
on occasions which elder
Older 26+ yrs generations will attend.
Shanghai, millennial

24 13 23 20

Gold Diamond Designer fashion Technology*

*smartphone/wearables

China’s jewellery market | New perspectives on consumer behaviour 08

Gold jewellery’s share of mind is not as strong as
diamond jewellery, technology or luxury fashion

Consumers’ desire is focused on luxury fashion and technology

% share of mind

9 12 18 29

Fine gold Diamond Wearable Designer/luxury

jewellery jewellery technology/ fashion
smartphone

Gold jewellery these

Share of mind is a measure used in market research to assess the growth
potential of a product or category. It represents what we expect people to days are owned by
purchase for each option in the competitive set, based on ideal preferences everyone, therefore they
for jewellery and luxury fashion.
are not luxury, unlike
Under threat from other luxury diamonds, technology and luxury
(luxury) handbags.
goods, gold jewellery is suffering in fashion to increase desire among Weifang, older

consumers’ share of mind. consumers.

Gold’s strong cultural associations, To achieve this, consumers’ needs and

such as bringing good luck, help to
drive its share of mind, but it needs
to work harder amongst millennials.
Gold needs to increase its relevance
in order to thrive, and must compete
effectively with products like
desires must be explored and used
to influence the positioning of gold
jewellery in the category. A key part
of this is to discover existing habits
around purchase, inspiration and other
lifestyle behaviours.

China’s jewellery market | New perspectives on consumer behaviour 09

Section 2
The purchase journey and the
role of digital and influencers
An industry perspective:
Luxury means vastly different things for millennials
compared to prior generations. It’s all about the experience.
Many are giving up the big house or the fancy car for a
life-defining experience that can be shared with family and
friends. Or even with people they don’t know on social
media. And when they do purchase a luxury item, that too
is all about the experience and the ability to share it. If it
can’t be shared, then it didn’t happen.
Jim Joseph
President of the Americas,
Cohn & Wolfe

China’s jewellery market | New perspectives on consumer behaviour 10

Women are more independent
and assertive

Women are increasingly independent Gold was the chief purchase in the last year, but other products are gaining
and crave more success and % bought for self/purchased as a gift/asked for as a gift in the last 12 months
recognition. Taking pride in their
financial independence, they enjoy Bought Purchased Asked for
rewarding themselves for their hard for self as a gift as gift
work. Success and self-identity are Gold jewellery 45 24 18
celebrated and “gift myself” is a trend
that is here to stay. Diamond jewellery 25 10 14
Platinum jewellery 28 14 14
Although still dominant, gold jewellery
has strong competition in this space Luxury fashion 57 34 29
from luxury fashion, tech gadgets
Technology 68 28 23
and experiences. Gold could improve
by communicating personal values
and expressing identity, increasing its
appeal as a distinctive purchase. Considering that my
Gold jewellery can work harder to zodiac year of birth is coming,
represent the celebration of success I planned to buy gold for
for female consumers and to be
present in the occasions when they good luck and protect against
consider buying. the evil. I couldn’t find a
pendant that I liked and
The last time I bought bought myself a lulutong.
gold jewellery was on Shanghai, millennial

Valentines’ Day this year.

It was a necklace of 18K
gold, a gift for myself.
Shenyang, millennial

China’s jewellery market | New perspectives on consumer behaviour 11

 Birthdays are now the biggest occasion for gold, diamond,
platinum jewellery and luxury fashion purchases
% women buying each product for birthdays

29 29
24 25

Gold Diamond Platinum Luxury fashion

China’s jewellery market | New perspectives on consumer behaviour 12

Evolving purchase occasions
are an opportunity

Birthdays are now the biggest occasion for gold purchases Last Spring Festival, I went
% women buying each product per occasion
home and gave my mum a
Gold Diamond Platinum Luxury gold bracelet as a gift. There
fashion
is a Guanyin image on it,
Birthdays 29 24 29 25
which express my good wish
Chinese New Year 12 11 7 14
of keeping my mum safe and
Anniversary 9 12 16 6
healthy. My mum loves it and
Wedding 5 4 4 2
wears it every day, she feels
Valentine’s Day 8 17 7 8 proud to tell others this is
No specific occasion 7 11 14 14 from me, her daughter.
Shanghai, millennial
Gold is a ritualistic purchase across This could be especially true
traditional occasions. Chinese New for millennials if gold is used to
Year is commonly recognised as a demonstrate evolving culture and I bought a gold necklace
key gold buying occasion. But other independence. For example, gifts to for my mother’s birthday. The
occasions, such as birthdays, have parents display both financial success
and reciprocated protection. older generation appreciates
become more important and gold is
increasingly purchased for no special
yellow, pure gold, from a
New purchase occasions and the
occasion or for a treat. planning that precedes them are traditional, trusted brand.
spaces for gold to inhabit. There are My mother likes more
These new patterns in consumer opportunities to create fresh meanings delicate, younger designs so
behaviours show the desire to take of gold and modernise the purchase
gold out of its traditional domain. journey for consumers. I bought the necklace from
Chowsangsang.
Shanghai, millennial
Gold purchases are carefully considered
% making a Gold Wearable Silver
spontaneous jewellery technology jewellery
purchase

22 32 52
China’s jewellery market | New perspectives on consumer behaviour 13
The importance of digital
in the purchase journey

E-commerce is growing in importance. Online purchases in
the jewellery and luxury goods category account for around
one-fifth of all occasions, rising significantly among young
millennials.
For millennials, the online experience provides opportunities
to share with others and the potential to purchase
personalised, distinct products.
Although around a third of gold purchasers begin their
journey online, only 4% actually go on to complete their
purchase online.
While a preference to touch the product is the number one
reason cited for preferring to buy in-store, concern around
the security of online purchases in fact is the greater barrier
to buying online. In the US, where the level of concern
over security is much lower, consumers are six times more
likely to buy online despite the same level of preference to
handle the product.

Digitally-engaged millennials
are much more likely to buy
online than older generations Diamond
% purchase of jewellery
or luxury goods by channel
In-s
tore
50
81
Gold

Online 35
19 Platinum

Online younger Over a third of consumers 31

millennials (18-25 yrs) browse gold jewellery

39
online before buying in-store
% browsed each product
online before buying in-store

China’s jewellery market | New perspectives on consumer behaviour 14

A seamless in-store and online presence
can enhance the consumer experience

Strengthening in-store environments and developing the
online experience at the same time are key opportunities
for gold. This must include addressing the security concerns
that shoppers have.
Having both an engaging presence in the early part of the
purchase journey and a seamless transition between online
and in-store will be critical for future growth.
Blue Nile in the US is a good example of a retailer creating
such a seamless transition. Over the past 15 months,
Blue Nile in the US has opened a number of ‘webrooms’
that blend the in-store and online experiences. These offer
customers the experience of touching, handing and trying
on jewellery pieces before ordering them online – either via
in-store iPads or at home. Retailers need to develop online
strategies to more effectively engage with the younger
generation and Blue Nile’s roll-out of ‘webrooms’ might be
a strategy for the industry to look towards.

Security is a major barrier to online purchase in China

% giving each reason as a barrier to online purchase

China USA

Prefer to touch/
handle product 54 51
It’s not
secure 48 2
Easier to
buy in-store 30 41
The Webroom at Washington Square in Portland, Oregon.
© Blue Nile

China’s jewellery market | New perspectives on consumer behaviour 15

Online, in-store and word of mouth
as sources of inspiration

Blogs, social media, and celebrity endorsement are The shopping assistant was very helpful.
particularly significant sources of inspiration for millennials,
I had the idea of purchasing 4 beads. She
but so too are word of mouth and in-store browsing.
recommended to buy 6 beads, 3 small and
3 big. This arrangement carried greater
luck. It was the same grams, just a different
arrangement. I felt very grateful for her advice.
Shanghai, millennial

Both in-store and online are important for millennials when searching for inspiration

% quoting each source as Browsing Friends/relatives/ Fashion/jewellery

where they get ideas and in shops colleagues brand websites

54 36 59
inspiration about jewellery
and luxury fashion
millennials (18-33 yrs)
Survey average 55 Survey average 42 Survey average 56

Advertising Magazine/ What celebrities/well-known Online blogs/

newspaper articles people are wearing Social media

39
Survey average 37
39
Survey average 33
36
Survey average 31
54
Survey average 45

China’s jewellery market | New perspectives on consumer behaviour 16

Trends are informed by the trendsetters; the gold
jewellery industry needs to engage with them
Gold’s share of mind is low among those who are the
most engaged with luxury goods and jewellery. These are
women who seek out new jewellery designs and are active
both online and offline.
Highly engaged consumers become trendsetters,
generating social media content as well as viewing it,
meaning they can be powerful advocates.
China’s jewellery market | New perspectives on consumer behaviour
Trendsetters’ distinct behaviours:
• Searching for inspiration across fashion and jewellery
brand websites
• Being influenced by celebrities and well-known people
• Browsing in-store and online but also via magazines
and TV
• Buying branded products, especially global brands
• Being highly connected across devices
• Purchasing in-store
At all stages of the purchase journey and across all
channels, engaging trendsetters with gold jewellery can
significantly increase share of mind for all consumers in
the luxury goods space.
17
Section 3
What consumers look for when
buying jewellery and luxury fashion

China’s jewellery market | New perspectives on consumer behaviour 18

Defining consumers’ desires

Evolving trends among the emerging middle class,

Spend Index (SI):
professional females and millennials highlight new desires
to express identity, gain recognition and embrace change.
200
Segmenting consumers by purchase occasions, and
discovering their needs for each occasion, can identify where
gold jewellery can be positioned to satisfy those needs. Spend
Five distinct, highly emotive occasion needs for jewellery index
and luxury fashion have been identified through consumers’
ideal choice for an occasion. Three of these are most Average
relevant to gold jewellery are explored overleaf. 100
spend

Spend index is calculated by comparing the average

spend on purchases for each occasion need (e.g.
enhance my style) vs. the average spend across all
occasion needs.

China’s jewellery market | New perspectives on consumer behaviour 19

 15% of all purchase occasions (Spend Index: 91)
This need is to express and symbolise love
and to be reminded of a special moment or tradition.
The ideal product has traditional and delicate designs. It is a good financial
investment and an heirloom to pass onto children/family.
• Bought as a gift for traditional or life events
• Siblings and children can influence choice
• Purchase done while browsing in-store
• Unbranded item
• More likely to be: older age groups and lower engaged

32% of all purchase occasions (Spend Index: 186)

This need is to indulge and to feel proud and unique.
The ideal product celebrates achievements, demonstrates
prosperity and is recognisably exclusive.
• Received as an asked-for gift, relationship milestones,
job successes
• Planned purchase in-store with extensive browsing across channels
• Global luxury brands are favoured
• More likely to be: 35-44 years with high engagement

33% of all purchase occasions (Spend Index: 110)

This need is about fitting in but also expressing personality.
The ideal product is a must-have that friends are discussing and
is appearing in magazines and fashion websites.
• Bought for birthdays, CNY, Women’s Day
• Planned online purchase with browsing beforehand
• Global brands favoured
• Accessibility important
• More likely to be: young millennials and highly engaged

China’s jewellery market | New perspectives on consumer behaviour 20

China’s jewellery market | New perspectives on consumer behaviour 21
Section 4
Strategies for growth
An industry perspective:
Brands stretch meaning of luxury with playful designs.
Although people feel uncertainty, there’s increased
confidence in celebrating luxury. A demonstration of this is
a shift back to logos and more brazen luxury. This is in stark
contrast from recent years when it was about discretion
and being in the know, rather than showing off with badges.
We’re seeing trends of opulence, flamboyance and romance;
people want to have fun with luxury and be playful.
Eleanor Lloyd Malcolm
Cultural Strategy
Kantar Added Value

China’s jewellery market | New perspectives on consumer behaviour 22

Maintain and develop gold’s heartland in
the value tradition and connect segment

Value tradition and connect is a meaningful occasion need To reinforce and strengthen gold’s position in meeting
size and a core part of the market in China. this need, the jewellery industry can:

This segment is an opportunity where gold is already • Leverage competitive advantage around tradition and
delivering but could work harder to meet consumer needs. long-lasting value

The desire in this space is for sentiment and nostalgia. • Better cater to the emotional dimension of this need,
The ideal product: tailoring in-store communications and designs to
symbolise love
• Is a good heirloom to pass onto children/family • Showcase delicate as well as traditional designs that
• Expresses and symbolises love are seen as real works of art
• Reminds one of a special occasion Diamond and platinum are the main challengers in this
• Is a good financial investment space, especially diamond, which is seen as a way of
expressing love and is set in delicate designs.
• Has delicate designs

Gold’s traditional associations are still strong

% agreeing with the following statements

Gold can bring you good luck My last purchase of gold jewellery
happened at Xinyuan, the local store.
60
I bought a pure-gold pendant with a
shape of a Buddha for my daughter
Owning gold makes me feel secure for the long term
since the Chinese pronunciation of
58 Buddha is close to ‘fu’, which means
good luck in Chinese. I hope it could
Gold will never lose its value over the long term bring her happiness and good luck…
57 And I think it also maintains value.
Weifang, older

China’s jewellery market | New perspectives on consumer behaviour 23

 Global luxury brands are more successful in targeting
consumers buying diamonds than gold
% consumers who describe their jewellery as from
global luxury bands

22 40
Gold Diamond

China’s jewellery market | New perspectives on consumer behaviour 24

Target new consumers through
design and branding
For traditional gold purchase occasions, known brands
provide trust, confidence and recognition. But to meet
other consumer needs, such as reward and assert success
and enhance my style, brands need to go further.
Assertiveness and confidence is core to reward and
assert success. Brands targeting this segment should
communicate exclusivity, uniqueness, and prosperity.
Designs should make the consumer feel powerful and
attractive. Global luxury brands do this, and are important
for this segment, however, diamonds are much more likely
to be associated with this need than gold.
Gold jewellery brands should also explore and target
enhance my style consumers who desire self-expression.
Brands successfully engaging with consumers in this
space generate a buzz, with products appearing online and
in magazines, being endorsed by celebrities and worn by
trendsetters. This encourages sharing among friends.
Although 24k gold jewellery does not perform well in this
space, 18k jewellery does. With its lower entry cost and
Millennials are the biggest audience for 18k gold
% last 12 month purchasers
39 37
18-30yrs 31-40yrs
China’s jewellery market | New perspectives on consumer behaviour
broader array of designs, 18k gold can be leveraged by the
jewellery industry to better serve consumers with the need
to enhance my style. And there are new trends emerging
which can also tap into this need. For example some
retailers have recently launched 22k “Elite Gold”. Innovation
like this can help the industry grow.
Both Cartier and Tiffany are ranked in the top
10 most valuable luxury brands
BrandZ / Millward Brown
Pandora is a jewellery brand renowned for
leading the branding charge on the local
jewellery market. This is demonstrated in the
rapid increase in brand awareness in the last
decade from 10% to over 70% in key markets
Pandora Investment event
17
7
41-50yrs 51-65yrs
25
Summary
Despite gold jewellery having
established a strong position in
China, through its rich associations
and traditions, there are clear
threats emerging. Gold’s relevance
is battling against the appeal of new
products and luxuries. It is facing
increasing competition in Tier 1
cities and this is likely to be mirrored
in lower Tiers as fashions evolve.
Share of mind is low among both
millennials and the most engaged
within the category, emphasising
the need to develop the meanings
of gold for the new generation.
Women and millennials are the
priority audience for the new
meanings of gold and innovative
China’s jewellery market | New perspectives on consumer behaviour
purchase journeys. Combining online
and in-store experiences and creating
new communication channels will
respond to evolving behaviours and
engage consumers and trendsetters.
Using occasion needs to define
opportunities will support the
development of brand identity
and product design, celebrating
new messages while retaining the
foundations of tradition.
The changes in China need to be
listened and responded to. Traditions
are still strong, but retailers have
the opportunity to modernise
and reinvigorate those traditions,
keeping the love for gold alive by
looking at it in a new way.
26
China’s jewellery market | New perspectives on consumer behaviour 27
World Gold Council
Room 5A 48/F
No. 1717 Nanjing
West Road
Wheelock SquareJing’an District
200040 Shanghai
People’s Republic of China
T +86 21 6289 2111
F +86 21 6289 3222
W www.gold.org

November 2016 S002201611