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Jewelry industry has glittering prospects
Jewelry industry has glittering prospects
Customers try on jewelry in a Hera Moment store. The Beijing-based company makes custom accessories. [Photo/Xinhua]
Multi-brand outlet offers Chinese consumers accessories with a touch of style
Glittering ladybird motif items, and intricate necklaces and earrings, are just part of the branded jewelry trend that has swept across China.
Authentic and artistic pieces tend to entice discerning shoppers in an industry which is maturing as well as expanding.
A report from the China Industry Development and Research website showed the jewelry and precious metal accessory market snowballed from 121.7 billion yuan ($18.5 billion) in 2004 to 499 billion yuan last year.
To cater for rising demand, new stores are sprouting up such as One Jewelry, which opened in September.
This traditional outlet unveiled a collection of 12 international brands, such as Facco and Carla Amorim, in Shanghai's Super Brand shopping mall in Lujiazui, part of the city's Pudong New Area.
Already Li Jun, founder and chairman of the company, is planning to develop the business into an accessory chain on the lines of I.T, the fashion apparel giant in Hong Kong.
"Just like I.T, we plan to feature a unique, multi-brand and multi-layer business model that gathers many in-house and licensed global brands," Li said.
"A second store with a collection of more than 20 labels will be opened in a shopping mall in southeast Shanghai within the year, and the combination will be adjusted, according to the feedback of our consumers," he added.
By selling multi-brand jewelry in brick-and-mortar stores, the company is targeting China's young middle class professionals who demand quality and diversity.
Many have traveled outside the country and have developed a passion for beautifully crafted pieces.
"Chinese people spend billions of dollars on overseas trips every year, among which about 40 percent goes on accessories, including jewelry and watches," Li said. "That opens a 600 billion yuan market for the related business sector here."
In Deloitte's Global Powers of Luxury Goods 2017, the report highlighted the significant regional price disparities within the industry.
BenchMarque revealed that US dollar-adjusted prices for equivalent items are on average more than 50 percent higher in China than in Italy and France.
Naturally, this presents an opportunity for travelers from Asia, and maintains the pre-eminence of the home markets associated with European brands, the report stated.
Li plans to change that by selling products in China at the same price as in their countries of origin.
"By lowering gross profit margins and special offerings from the brands, One Jewelry aims to sell the same items at the same price as in home markets such as the United States or Europe," he said.
During the past few months, business has been brisk at One Jewelry's boutique store in Shanghai.
Retail sales have been encouraging with the average age of customers between 25 and 40.
"The most popular products are those having unique designs with a good background story," said Lyu Jingwei, manager at the store.
Italian label Facco is one of the favorites with shoppers.
The company has been around for nearly 50 years with its collection of intricate designs and craftsmanship.
Its signature ladybird motif items are popular in Europe, as well as in South Korea, due to their tiny, colorful appearance.
"Italian women love jewelry, but China is going to be more important considering its greater potential," said Gilberto Facco, the company's chief executive officer.
Ladybird items come in eight different colors and represent different emotions or aspects of society.
Red, for example, is for passion, while yellow is for freedom. Black tends to represent elegance, white for wisdom and green for harmony, Facco pointed out.
Red ladybirds, a bestseller in Italy, have also become extremely popular here.
"By entering China via Shanghai, we expect to expand quickly in the country and have a good market share," Facco said.
Data released by Euromonitor International showed that revenue for retailers dealing in personal accessories in China jumped from 780.59 billion yuan in 2013 to 874.06 billion yuan last year.
In the next five years, the market intelligence company predicted the sector will continue to expand from 915.33 billion yuan in 2017 to 1.11 trillion yuan in 2022.
"For the Chinese mainland, spending has been lower," the Global Powers of Luxury Goods 2017 report stated. "But demand remains steady among the middle class as they continue to buy better quality products and showcase their social status."
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