Dai Qingxiang, a 28-year-old office worker, recently faced a tough decision. She contemplated purchasing gold accessories to elevate her wardrobe but hesitated due to the surging prices of the precious metal.
Encouraged by her close friend, Liu Nushi, Dai ultimately decided to proceed. On a sunny May afternoon, she visited a jewelry store in Shanghai’s Xuhui district, intent on acquiring the desired items.
Her initial hesitation mirrored a broader trend driven by the global surge in gold prices. Data from the World Gold Council revealed a record quarterly average of $2,070 per ounce in the first quarter, marking a 10 percent increase year-on-year and a 5 percent rise from the previous quarter. This rise was attributed to robust investment activity in the over-the-counter market, increased central bank acquisitions, and heightened demand from Asian markets.
In China, domestic gold demand showed a notable 3 percent year-on-year growth during the same period, exceeding averages observed over the last decade.
Responding to shifting consumer preferences, Shanghai’s local jewelry brands are innovating to capitalize on the heightened interest in gold products. Shanghai Jinchenghuang, established in 1934, has adapted its strategies to maintain market relevance. Lin Zechao, General Manager of Shanghai Jinchenghuang Industrial Group Co., emphasized the brand’s commitment to quality and consumer insights, which have informed targeted marketing and product enhancements.
“We’ve observed that smaller, hard gold accessories have sustained popularity despite market fluctuations,” Lin noted, citing a 30 percent year-on-year increase in gold bar sales in 2023.
Meanwhile, venerable brand Lao Feng Xiang, tracing its roots back to the Qing Dynasty, recognizes the imperative of balancing tradition with innovation to appeal to both older and younger demographics.
“Young consumers prioritize products with meaningful designs, while older generations focus on symbolic values like blessings and prosperity,” explained Lu Jing, Marketing Manager at Shanghai Laofengxiang Co.
To cater to diverse consumer preferences, Lao Feng Xiang has introduced new retail concepts such as “Cang Bao Jin” and “Feng Xiang Xi Shi,” tailored to different consumption scenarios and emphasizing traditional Chinese cultural elements.
Despite these innovations, challenges loom on the horizon for the gold jewelry market in China. Wang Lixin, Regional CEO of the World Gold Council of China, cautioned that seasonal factors and fluctuating global prices may dampen sales in the upcoming quarters.
“While consumer uncertainty persists, especially amidst seasonal market trends, gold jewelry sales are anticipated to face pressure,” Wang remarked.
Reflecting on her purchase decision, Liu Nushi offered insights into consumer behavior amidst rising gold prices.
“The best time to buy gold jewelry is when prices are climbing,” Liu remarked, browsing through a variety of designs at a Shanghai store. “For myself, I prefer accessories that are visually appealing.”
As Shanghai’s jewelry brands navigate through market complexities, the industry’s ability to innovate while preserving cultural heritage remains pivotal in sustaining consumer interest amid economic uncertainties.
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