Insight into the trend of China’s gold jewelry retail terminal in 2021 From World Gold Association

The following is the Insight into the trend of China’s gold jewelry retail terminal in 2021 From World Gold Association recommended by recordtrend.com. And this article belongs to the classification: Consumer research, Life data.

In 2021, the trend of China’s gold jewelry market will become clearer. For the second year in a row, the World Gold Council and China Gold daily worked together to investigate more than 500 gold jewelry retailers across the country, and issued the 2021 China gold jewelry retail terminal trend insight report, which deeply interpreted the main trends in China, the world’s largest gold jewelry market. Next, we will explain it in detail in three phases. Today, let’s take a look at the position of gold products in retail terminal inventory.

Overview of China’s gold jewelry demand in the first half of 2021

In the first half of this year, China’s gold jewelry demand grew strongly. Following the most brilliant first quarter in six years, China’s gold jewelry consumption stabilized in the second quarter of 2021, making the total demand for gold jewelry in the first half of the year reach 338 tons, a year-on-year increase of 122%, which is equivalent to the level before the epidemic.

China’s strong economic recovery was the main driving force for the year-on-year recovery of the gold jewelry market in the first half of the year. COVID-19 has been effectively curbed, China’s government has introduced a number of supportive policies, and in the first half of the year, the real disposable income of local residents increased by 12% over the same period, and consumers’ spending on optional consumer goods including gold ornaments increased.

The change of domestic gold price is also an important factor driving the change of gold jewelry demand. First, gold jewelry is similar to other consumer goods, and its demand is negatively correlated with the gold price in the same period. Although the demand for gold jewelry in the second quarter was relatively weak due to seasonal factors and the slight rise in gold price month on month, the consumption of gold jewelry in the first half of the year performed well, which was due to the 8.5% decline in gold price in the first quarter, which promoted the sharp increase in demand for gold jewelry in the current quarter.

Secondly, in most cases, the rise in gold prices is often good for the subsequent demand for gold jewelry. As most of China’s gold ornaments are full gold products, Chinese consumers usually regard gold ornaments as investment assets and advocate the consumption psychology of “buying up but not buying down” [1]. In the second half of 2020, the domestic gold price hit a record high, brought a lot of attention to the gold jewelry market, and made consumers buy more gold jewelry in the first half of this year in order to further increase the gold price [2].

In addition, the Spring Festival sales season, the government’s measures to stimulate domestic consumption and other factors have also promoted the growth of China’s gold jewelry demand so far in 2021.

    2021 China gold jewelry retail terminal research

In the first quarter of 2020, China’s gold jewelry market was severely hit by the epidemic. The epidemic not only set a new low in gold jewelry demand in the first quarter since 2004, but also had a far-reaching impact on the trend of China’s gold jewelry market. In order to fully understand the market dynamics, the World Gold Council, in cooperation with China Gold newspaper, conducted a survey on jewelry retailers in more than 20 cities in China in the second quarter of 2020 by combining online questionnaire survey and offline one-to-one interview.

The research results of the gold jewelry market in 2020 were released at the annual China Gold Jewelry Festival held by the gold newspaper in September 2020 and aroused warm repercussions [3]. At the same time, we understand that the survey results have also played a guiding role and help for industry participants.

In 2021, the cooperation between the World Gold Council and the newspaper continued. The 2021 China jewelry retail terminal survey was launched in June this year, and 542 effective responses were received, including retail jewelry store managers and regional and national brand heads from more than 20 cities of different levels. We believe that the survey results have strategic reference value for China’s gold jewelry industry.

Dominate

Gold products dominate the inventory of Chinese jewelry retailers. The 2020 survey shows that gold products account for 45% of the total inventory of Chinese jewelry retailers in terms of value, ranking first in all categories. In 2021, this proportion increased further: gold products accounted for 52% of the respondents’ inventory, higher than the average level before the epidemic. In terms of value, 35% of gold products are below 10g, 31% are between 10g and 20g, and 34% are above 20g.

Gold products are dominated by three key characteristics. These three features include:

High liquidity

Gold is money and is synonymous with liquidity. In the first quarter of 2020, China’s gold jewelry consumption was severely hit by the epidemic, and many jewelers quickly realized their gold products in exchange for liquidity, and obtained rich returns driven by the rise of gold prices. This also makes retailers realize that gold products can not only maintain and increase value, but also have high liquidity, so they compete to increase gold inventory.

Convenience of exchange

For retailers, the high liquidity of gold products means that it is easier to turnover and lower cost than other products. For example, retailers can easily convert one type of products (such as common gold jewelry) into another type of products (such as Gufa gold jewelry), and only need to bear smelting costs and labor costs in the conversion process [6]. The characteristics of relatively low cost and fast turnover make retailers more willing to increase the inventory of gold products than others.

Historical status

Finally, historically, gold products have always occupied an important position in China’s jewelry market. The 2020 survey shows that compared with other types of jewelry, gold jewelry is more favored by Chinese consumers. Our previously released insight into China’s gold jewelry consumption trend in 2019 also pointed out that the gold jewelry ownership rate of Chinese consumers reached 62%, higher than all other categories. Therefore, gold jewelry products account for the highest proportion (by value) in the inventory of Chinese jewelry retailers.

Gold products will continue to dominate in the future. Looking at the next one to two years, 57% of respondents said they would increase the inventory of gold products, 43% of respondents would increase the inventory of diamond inlaid jewelry, and 27% of respondents would increase the inventory of other products. In addition, 50% of retailers are optimistic about the sales prospect of gold jewelry in the next one to two years, which is higher than that of diamonds and other jewelry products.

In conclusion, gold products dominate the inventory of jewelry retailers and are expected to continue, which should enhance the confidence of gold industry practitioners.

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