In global comparison, most revenue in the Jewelry segment is generated in China (US$17,961m in 2020). The market is expected to grow annually by 4.2% (CAGR 2020-2023). With such a large number of “New rich” with high spending potential, and with an increase in the importance of self-expression among young people, China is undoubtedly a strategic market for companies that want to grow.
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. However, complications advance in a constantly changing market and with a culture and use of communication channels completely different from ours. Therefore, a thorough analysis of the opportunities, and an understanding of the Chinese world, especially the increasingly growing Chinese digital world, is necessary before going to invest in this market.
New Chinese jewelry consumers: from Millennials to Children
With demand in the first-tier cities reaching maturity, second and third-tier cities become a more important driver of growth and contribute more to the Chinese jewelry market.
Anyway, the market in the first-tier cities is obviously not shrinking, so companies should continue to improve their positioning and branding to satisfy sophisticated customers in these cities.
Currently, the Chinese jewelry market has a wider target market which includes:
Women are more likely to buy jewelry for themselves
Consumption of the Chinese jewelry market is dominated by women. 63% of jewelry products are purchased by women. Looking at the opportunities for companies, brands should know that this is a highly competitive market.
However, a new trend is spreading: while many Chinese still wish to receive diamonds as a symbol of a future marriage, many others are more likely to buy diamonds for themselves. This is due to the growing number of working women (25% of women in China are already earning more than their spouses).
- For Chinese women who wish to receive diamonds as a symbol of future marriage, emotional drivers that let people buy jewelry are particularly powerful. Therefore, creating an emotional marketing campaign, especially during some Chinese festivals (520 Day, the Chinese Valentine’s Day) is a good option to sell jewelry to women.
- For women who buy diamonds for themselves, brands should adapt their product line, keeping away from the promotion based on love and showing images of women and not just couples.
Millennials a strong consumer group
The growing attention to consumption and personal decoration as self-expression in millennials is exerting an increasing influence on the demand for jewelry.
Millennials increasingly appreciate the jewels to wear every day, they also value the experience of things. For example, Pandora is very popular in China because, by launching new products on various holidays, its Moment series bracelets offer different options for Chinese customers.
Men are a flourishing target market for Jewelry brands in China
The men’s market products in China include rings, tie clips, cufflinks, and belt buckles. In addition, among Chinese males in the 30-44 age group, 67% wish to own diamonds.
The male jewelry market is still in the early stage of its development, therefore, opportunities for brands are many. Furthermore, their demand is not well satisfied as, for example, brand’s male products lack of innovation about design and most of them are gold rings or bracelets and not diamonds.
Jewelry for children as a way of wishing them a happy life
In accordance with Chinese traditions, people give bracelets and necklaces to children as goodwill tokes and as a way of wishing them a healthy and happy life.
In response to this demand, many companies have introduced a variety of kids’ products. For example, Chow Tai Fook, the Hong Kong company, also cooperated with Disney, Line, and Marvel, attracting parents to buy for their children.
In response to changing marketing conditions, jewelry players are increasingly targeting younger consumers and trying to build a presence in second and third-tier cities mainly because the Internet penetration rate in these cities is taller than before and people are more easily influenced by KOLs when making a purchase decision.
The first-tier cities are changing the shape of consumerism in China
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.
In recent years, gold jewelry has faced stiff competition from gems or other jewelry products in top-tier cities. However, this competition is not present in lower-tier cities, where consumers flock to buy high-caliber gold jewelry for wealth conservation purposes.
What are the opportunities for foreign brands in China’s jewelry market?
The jewelry market in China is still dominated by foreign brands. Chinese consumers greatly appreciate the personalization of the products, the history of the brands and are involved in the design of the jewelry.
In China, the products of foreign brands such as Cartier, Bulgari, Tiffany, and Swarovski are priced higher than national brands for their long history. While most Chinese jewelry brands have no more than one hundred years of history and the price is of course cheaper. Therefore, the products of foreigners and locals are positioned on two different levels which lead to a specific selection of consumers.
In 2018 Chow Tai Fook Jewelry Group maintained the lead in jewelry in China. Chow Tai Fook Group implemented a multi-brand strategy, building a high-end jewelry brand image. The company provides a prominent example of a jewelry player who has tried to follow new trends by developing both offline and online.
The most important trend in China’s jewelry market is the digitization
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.
Online shopping has actually become the best national pastime in China with around 77% of respondents choosing it as their favorite recreational activity. 80% of consumers look for and learn about jewelry products and 60% of them buy on the Internet.
Almost all the main players in the jewelry industry in China have their own store on Tmall or/and JD.com. I addition, Pinduoduo could be another good option to sell your products on the internet.
If you want to know how to open a store on Tmall/JD and how to manage it, contact GMA, we offer services like:
- Shop Design (We make your shop attractive to Chinese buyers, putting your products on the best possible light)
- In-platform Advertising (Tmall is a more than a store. It is a product Search Engine. We use Tmall promotion tools and Ads to help you Sell)
- Off-platform Marketing (KOL, e-reputation, Banner ads, we have experts for each of these promotional strategies)
- Reporting & Analysis (We monitor your shops & ads results, optimize them to get you the best ROI. Then we provide you with easy-to-digest reports).
However, both for big and small companies, with or without a presence in the Chinese market, what is necessary for China is BRANDING. Before opening an online store on this platform, brands should focus on branding and e-reputation as it is essential in China to sell products.
Brands can use Wechat, Weibo, Xiaohongshu, and Douyin to:
- reach Chinese consumers,
- create branding,
- increase brand awareness,
- increase e-reputation,
- promote jewelry products,
- sell products.
The importance of Branding for jewelry brands
The rising of millennials, a highly branded demographic as a key consumer group for jewelry in China, has greatly strengthened the brand’s role in jewelry.
While some high-end jewelry brands attract customers by telling brand stories, such as Cartier, other young brands without such a long history should strengthen their visibility and promotion on Chinese digital channels such as Baidu, social media, forums, etc.
How to communicate with Chinese consumers and create branding?
Creating a Chinese website on Baidu to strengthen your Jewelry brand visibility
Create a Chinese website to be visible among Chinese consumers is essential for branding in China. Of course, it should be created on Baidu, the Chinese Search engine.
In addition, to be visible, your Mandarin website should be hosted in China because Baidu knows only Mandarin and gives priorities to websites hosted in China, so they are extremely important for your SEO ranking.
Opening accounts on social media to promote jewelry products
WeChat: an efficient channel to communicate with Chinese consumers
WeChat is the most used Chinese social media, with its 1.165 billion monthly active users.
It allows companies a complete CRM through:
- The ability to create Wechat official accounts (Subscription, Service)
- Interact with followers and keep them updated on brand news
- Use mini-programs, small apps inside the WeChat system that cover various functions, such as e-commerce, games and much more.
- Use wechat pay
- Use wechat advertising (Wechat moment ads, wechat account promotion, wechat mini program ads, wechat article banner ads).
Cartier was the first luxury jewelry brand to use WeChat moments ads. Thanks to its effort on marketing campaign on this platform, Cartier’s WeChat account gain a huge following. Cartier marketing resulted in raised brand awareness and increased desire from consumers.
Besides WeChat, Weibo and Douyin are also witness a joining of jewelry brands. Domestic jewelry brand I DO has 38 thousand fans on Douyin and is one of the most popular jewelry brands on it. Recently, Chanel cooperated with Douyin, posting videos about its watch, gaining up to 73 thousand views.
Xiaohongshu: The social-eCommerce platform to promote and sell jewelry in China
Xiaohongshu is an incredible platform to sell jewelry products in China because thanks to its characteristic of being social e-commerce, consumers can both receive advice from KOL and trusted people and at the same time, they can directly purchase products on this platform.
In addition, live streaming on this platform is very important because, in the online market, the biggest challenge for jewelry companies is to inspire trust in customers. Through these videos and thanks to the collaboration with the KOLs, companies can obtain reliability from consumers who see in real-time what they are buying.
In addition, recent regulations on improving the reliability of these platforms will increase the possibility of selling your products very easily on the platform.
Use Q&A platforms like Zhihu to interact with your community
Recommendations in China are fundamental for people in their pre-purchase decision, the Q&A platform Zhihu is an amazing option where consumers gain recommendations from other consumers that already tried products.
In addition, companies should build a positive brand image on Zhihu through:
- Opening a professional official account which allows you to interact and communicate with users or even act as an industry representative to provide useful answers to questions on the platform.
- Managing the Zhihu community asking questions or posting answers. This helps improve credibility and provide a professional brand image by providing high-quality content.
- Producing learning materials through live streaming
- Leveraging KOLs. Whether you are interested in boosting awareness or generating leads, a KOL can do wonders for reaching your ideal audience.
GMA can help you to open and manage accounts on Chinese social platforms, Contact us for additional information!
In order to promote your brand and if you have any questions related to how to enter the Chinese Jewelry market, contact GMA now!