By Jiaqi Luo
There is nothing as emblematic as jewelry to symbolise Chinese values: family wealth, status and a sense of heritage reflected by jewellery’s ability to hold its value. China’s love of jewels as symbols of wealth is both historical and cultural. By 3,000 BC, jade had already become known as “yu” or the “royal gem.” Today, this historical legacy with jewels continues to permeate various aspects of the cultural fabric.
Take Chinese names. Ever met someone called “Qi” (琪) or “Yu” (玉)? These are just the two most common examples of the roughly 120 jewel-related characters for names. Take the historical drama Story of Yanxi Palace (a.k.a. the most Googled show on Earth). With a plot based in the Forbidden City during the Qing Dynasty, the show frequently puts jewels in the spotlight to distinguish empresses and concubines by status. Take the 2018 film Crazy Rich Asians, where jewels served as an essential crop to display the life of Singapore’s money-obsessed families.
(Consort Xian wore a pair of pearl, jade and coral beads earrings to asset her status of Step Empress in drama series Story of Yanxi Palace. Image credit: YesStyle)
(Jewellery is an indispensable prop in the all-Asian cast film Crazy Rich Asians. Scene 1: Astrid Leong buying a pair of Burmese gem-encrusted pearl drop earrings at a jeweller’s exclusive showroom. Scene 2: Jewellery-adorned socialites in Singapore’s high society. Image source: Singapore Tatler )
Today, China is the largest jewellery market in the world, accounting for 30% of global demand. The industry has gone through dramatic ups and downs over the last decade: after a goldrush-style investment crave in 2013, the domestic market cooled down during a period of rationalisation – yet re-started growth after 2017.
Gerry Chen, Director of Trade Engagement in World Gold Council, noted the surging demand was the result of jewellery’s new customer base: the Chinese millennials. Unlike the older, traditional Chinese consumers who tended to buy jewels purely for investment, the millennials purchase jewellery to manifest their personal style and identity. Under a global perspective, millennials indeed play a bigger role in China’s jewellery sales. According to De Beers, Chinese millennials account for 68 percent of diamond sales in China, with millennials worldwide accounting for only 45 percent. While Chinese millennials will continue to be more significant in the global jewellery market, it’s time for brands to learn about the fundamental shifts they have already shaped:
Firstly, Chinese millennials have a more “personal” take on jewellery compared to the preceding generations. Being the country’s first generation to grow up in full-blown economic growth, (born in the) post-90s Chinese are more willing to approach jewellery as a personal style addition, rather than a “family investment” piece as their parent’s generation often did.
According to the International Gemological Institute’s market insight, traditionally, Chinese jewellery buyers tended to focus more on the jewel’s raw quality than design or crafting process. Such emphasis on raw quality over all other aspects was the result of the “investment mentality” among older Chinese, who considered jewellery mostly as a form of insurance or at most, a family heirloom. That said, Chinese millennials are probably the first generation to incorporate style into their jewellery decision.
Secondly, young Chinese consumers are much more digitally savvy in their research journey of jewels. According to De Beers, one-third of new diamond acquisitions in China during 2018 were researched online. For each piece, consumers typically visited the internet three times, starting nine months before purchase. Yet online isn’t everything, especially when it comes to jewels, the traditional “brick and mortar” business par excellence. The World Gold Council research shows that although around one-third of Chinese gold purchasers research online, only 4% would complete their purchase online. A “see online, buy offline” model is the new normal.
Facing the vastness and complexity of China’s jewellery market, it would be unfair to generalise the “jewellery” industry by large. Each gemstone, each category, is a reflection of the country’s current political and cultural dynamics. Here are a prominent few:
Diamond: self-reward and huge room for localisation
Contrary to popular western ideals, a diamond is not all and forever in China. Although Chinese love-related festivals are closely tied to consumerism, a marriage’s association with diamond – an a priori in western countries – isn’t a deep-seated cultural value. In a traditional Chinese wedding, the groom should prepare a “Three Gold Set 三金” (ring, bracelet, necklace) for the bride. It is only in modern days that urban couples started to include “diamond ring” in their new wedding kit, “the三金一钻 (three gold plus diamond).”
According to De Beers, the penetration rate of Chinese couples at the time of marriage has been on an upward trend since 1990, reaching 47 percent in 2017 and rising. Over the same period, the United States and Japan each broke through 80% and 70% in the early 1990s, respectively, and although they have since declined slightly, they have remained stable at more than 60%. Compared with countries deeply influenced by the mantra “a diamond is forever,” China’s marriage diamond penetration rate still has large room for growth. But meanwhile, China’s self-purchase of diamond jewellery is on an upward trend, accounting for around one-third of pieces acquired in 2018.
Platinum: a choice for post-bridal jewellery
Although platinum’s global marketing message largely targets love, it is seeing a slow adaptation of Chinese couples to buy it for romantic occasions. In 2018, Platinum Guild International (PGI)’s report predicted a further sales drop of 3-8 percent. Yet despite platinum’s sluggish growth in China, PGI was able to pinpoint one niche market as the breakthrough: post-bridal jewellery created especially for mother and child.
“After consumer research across regions and segmentations, we believe there is an opportunity among 26 million consumers in China to acquire the perfect gift when celebrating a cherished newborn. Rare and hypoallergenic platinum is the perfect choice and the ‘Baby Darling’ collection is a symbolic celebration for wife and baby as they embark on a new adventure in life,” said Platinum Guild International CEO Huw Daniel during a press release.
Traditionally, babies in China have been given small tokens of gold, or unbranded jewelry in various metals. Now, spurred on by global trends, and the choices of celebrities and international Royals, Chinese families are looking for more exclusive collections of safe and meaningful gifts. For jewellery, this opens a new window for beautifully-designed, rare and hypoallergenic platinum pieces that are also safe for mother and baby’s sensitive skin.
Gold: a historic favourite in flux
Accounting for 58% of jewellery sales, gold has been a historic favourite in China’s long history with jewels. Since the beginning, the defining attribute of gold has been stability. This quality is exactly what attracted generations of older Chinese to safeguard their family wealth in unstable times.
With ongoing global (and local) issues and an mass economic slowdown, the price of gold in 2019 was supposed to hit a new height. But gold sales are running into a roadblock at the moment. According to Reuters, China has severely restricted imports of gold since May, cutting shipments by some 300-500 tonnes ($15-25 billion at current prices) compared with last year. Acting out on a “gold going in is money going out” perspective, the move aims to bolster an already devalued yuan.
Politics aside, China’s gold sales amount is seeing another block among millennial consumers, as their taste has had a significant shift. In a 2016 report, the World Gold Council notes that the ubiquity of gold in traditional Chinese culture has sapped millennial consumers’ desire to buy gold jewellery. Tired of seeing all-gold in old-style Chinese weddings, novelty-hungry millennials are put off by gold’s stereotype of being old, staid and beloved by grandmothers. Stylish, youthfully designed (and marketed) gold jewellery that succeeds in combating Chinese millennials’ gold fatigue would have a strong edge.
The Chinese mindset: influenced by investment and finances
When talking about precious metals and gems, it’s overly dreamy to simply focus on the angle of elegance and beauty. For Chinese ladies, they don’t only lust after the ‘pretty shiny’ thing, but are keenly focused on value, investment and worth.
As the International Gemological Institute (IGI)’s China Confidence 2019 Report points out, the market is seeing strong demand for rare colored stones, especially high-quality emeralds. In an IGI survey of Chinese jewelers, the value potential of coloured stones could rank as: emerald>diamond>ruby.
The crave for emeralds is the result of the stone’s record-breaking prices in global auction houses over the past 5 years. Believing a rare, high-quality gemstone would climb up the value ladder in global auctions, many Chinese see emerald as a desirable stock. But compared to investing in real stock, investing in gemstone feels more elegant and tasteful in the modern Chinese context. After all, China’s legacy with jewellery has long been embedded in culture.
Perhaps precisely because of China’s long legacy with jewellery, it is never too banal or vulgar to talk about the “money” side of jewellery for Chinese millennials. There’s no point in tip-toeing around the fact that much of their casual conversation with friends can easily fall-back to finances, real estate and quantity. While Chinese millennials see jewellery as a style accessory, they also consider a jewel’s investment value as a highly relevant point of concern. This aspect of the culture is extremely relevant to jewellery’s future, because Chinese millennials would be more prone to purchase something that promises a bright future of capital appreciation. International brands should never forget that pragmatism runs deep in the Chinese blood.
Buying jewellery as a form of wealth management is a deeply rooted value that often goes undetected by western media and brands who tend to focus on the flashy-spending, purchase-happy aspect of Chinese millennial consumption. In general, Chinese culture is not shy to talk about money, and thus there is no sinful Catholic connotation of “greed” in talking about the common and natural desire to earn more and have more.
Investment beats vanity
In fact, jewellery influencers in China have mostly built up their reputation by sharing investment tips, such was the case of famous actresses Yuqi Zhang (featured cover photo above, wearing a 52.15-carat pink tourmaline and diamond, with ruby and diamond earrings from Cartier’s High Jewellery Collection) in social platform Red Book / Xiaohongshu.
When talking about investing in diamond, Zhang made a bold statement saying “a diamond under a carat is worthless (一克拉以下的钻石都不值钱).” Zhang’s jewelry investment videos earned her lots of applause, as followers perceived her tip as helpfully honest. The dynamics goes: if celebrities buy jewellery for vanity, they are just flaunting their wealth; but if celebrities buy jewellery for investment, then they are welcomed to share their sage financial advice.
(Actress Yuqi Zhang becomes a jewellery investment KOL on Red Book / Xiaohongshu. Image: screenshoot).
Chinese millennials’ relationship with jewels, a traditional symbol of wealth in China, is two-fold. On one side, jewellery is still a ‘sexy’ icon for personal style, fashion and identity. Yet on the other hand – potentially a much stronger one – it is an ‘unsexy’, practical investment stock to safeguard one’s assets. One thing is sure – China’s historic love affair with jewellery is a story that’s continuing to flourish with the modern generation of aspirational young Chinese.