Chow Tai Fook’s inaugural consumer-trend report reveals that 74% of surveyed consumers in Mainland China and Hong Kong prefer natural diamonds over lab-grown ones! Shilpa Dhamija reports.
The first ever consumer-trend report released by Chow Tai Fook (CTF), the biggest jewellery retailer in Mainland China and Hong Kong, states that natural diamonds are considered a more valuable purchase than lab-grown diamonds by 74% of consumers surveyed in both regions. Consumers, particularly from the Tier 1 & 2 cities of the mainland showed greater inclination to buy natural diamond jewellery.
In the wedding category as well, natural diamonds continue to maintain their dominance over lab-grown diamonds (LGDs) in both mainland and Hong Kong, unlike other major jewellery markets such as the USA, where LGDs have gathered a lot of interest in the engagement ring segment.
The CTF report indicates that natural diamonds continue to attract loyalty because of their rarity and value, and 82% of female consumers surveyed associate diamonds with true love or loyalty in a marriage proposal. Buyers from Hong Kong showed a higher interest in purchasing diamond jewellery for marriage proposals than consumers in Mainland China.
While diamond jewellery has an expected demand in weddings, the report also finds that 61% of those interested in buying diamond jewellery, consider natural diamond products for everyday occasions, indicating a huge market potential for smaller jewellery items made with diamonds.
Even in the general gemstone category, which includes coloured stones and pearls, natural diamonds dominated consumer demand. In a region where local culture drives a substantial demand for coloured stones, 51% intend to purchase natural diamond jewellery over other surveyed gemstones.
In 2014, Chow Tai Fook bought Boston-based diamond jewellery brand, Hearts on Fire, for $150 million to expand its natural diamond line-up in global markets. As the potential for diamond jewellery shines back home, CTF announced a new general manager for the brand in China to expand its footprint in the homeland, earlier this month.
Yellow Metal Continues to Drive Jewellery Sales in World’s Biggest Gold Market
For approximately 60% of the surveyed consumers in both Mainland China and Hong Kong, the primary purpose of purchasing pure gold jewellery is to preserve value, particularly amid the recent economic conditions.
In the report that concentrates on the 18- 40-year age group, design preferences of millennials and Gen Z are also highlighted. It suggests that Gen Z consumers (aged 18-24) have not swayed away from China’s traditional interest in pure gold jewellery. In the survey, 64% of Gen Z consumers who buy pure gold jewellery see it as a form of self-reward or buy for daily wear.
Interestingly, 91% of respondents across Mainland China and Hong Kong showed an inclination to buy jewellery with elements of Chinese cultural heritage in the next 12 months.
Motivation to buy such jewellery designs varies in both regions. While consumers in mainland China associate cultural and heritage jewellery with good quality and as ‘Chinese chic’, Hong Kong consumers consider such jewellery designs as being auspicious.
According to the World Gold Council, the Chinese Valentine’s Day has become a key shopping occasion and driving force for jewellery sales among the young generation. This year it was celebrated on 22nd August. The study states that the gold industry withdrew 161 tonnes of gold from the Shanghai Gold Exchange (SGE) just before the celebration period, to cater to a rising demand for Chinese Valentine’s Day, mid-autumn festival and various jewellery fairs hosted in September across the mainland and Hong Kong.
Brand name and image matters to jewellery consumers in the world’s biggest combined market for gold. The importance of brand name is more dominant among Mainland China consumers than Hong Kong counterparts. Even in the mainland, the brand name matters more to consumers from Tier 3 and 4 cities, according to the CTF report.
Chow Tai Fook group’s Retail Sales Value (RSV) grew by 5.8% during the second quarter of FY2024 ending September 30th, as compared to the same period last year. Among its self-operated points of sales, Hong Kong and Macau together saw a +55.7% growth, but in Mainland China a decline of 12.5% was recorded. The movement of buyers from Mainland to Hong Kong and Macau fuelled their market growth.
According to the Hong Kong Tourism Board, the number of Mainland visitors in July 2023 reached approximately 70% of the pre-pandemic level and further jumped to over 80% in August 2023.