China’s jewellery industry has pulled off a 7.6% year-on-year increase to 82.8 billion RMB ($12.3 billion) in the first quarter of 2022, recovering from a slump in March of 17.9% to 20.5 billion RMB ($3.07 billion), according to the National Bureau of Statistics.
The market turbulence is mainly due to China’s stringent zero-COVID policies that have led to local lockdowns amidst the latest wave of Omicron outbreaks, affecting cities including Shenzhen and Shanghai which are also the main offline battlefields for jewellery consumption.
However, the industry is starting to see a light at the end of the tunnel as authorities began easing COVID restrictions in affected cities since mid-April. There is further hope for recovery in May thanks to major events including China’s Mother’s Day (which is celebrated on the second Sunday of May), and the unofficial Chinese Valentine’s Day on 20 May, as the Chinese pronunciation of ‘520’ is a homophone of ‘I love you’ in Chinese, which is mostly observed by China’s young people. As an embodiment of love and romance, jewellery products are expected to be more sought after.
In terms of consumption by categories, inlay fashion jewellery overall appears to be preferred over plain gold ones with sales of wedding accessories outperforming those recorded over the Lunar New Year season. This is partly because these celebratory activities are starting to pick up amid the country’s gradual reopening, signalled by the overall growth in offline consumption by up to 31.1% across the nation during the just concluded Labour Day holiday (from 30 April to 4 May).
In the meantime, driven by the surging gold price, domestic appetite for relevant products is also growing, with high demand for the yellow metal incorporating traditional casting craft as China’s guochao trend (or national wave that infuses modern fashion with traditional Chinese culture) continues to be an appeal for Chinese consumers. Moreover, small gold objects are still being craved by China’s young generations out of their affordability, for example, collecting “gold beans” has become a new trend that is popular amongst young Chinese.