{"id":10259,"date":"2021-07-26T13:46:07","date_gmt":"2021-07-26T08:16:07","guid":{"rendered":"https:\/\/gjepc.org\/solitaire\/?p=10259"},"modified":"2021-07-26T13:46:10","modified_gmt":"2021-07-26T08:16:10","slug":"china-driving-global-diamond-demand","status":"publish","type":"post","link":"https:\/\/gjepc.org\/solitaire\/china-driving-global-diamond-demand\/","title":{"rendered":"China Driving Global Diamond Demand"},"content":{"rendered":"\n

Mainland Chinese jewellers continue to open new stores at a record pace as the government stimulates domestic consumption.<\/em><\/h4>\n\n\n\n

In the company\u2019s most recently concluded fiscal quarter, i.e. calendar-Q2, China\u2019s largest jeweller Chow Tai Fook said it saw company-wide sales soar 70% year-over-year driven by \u201cbuoyant consumer sentiment” in Mainland China and \u201ccontinued recovery\u201d in Hong Kong and Macau markets. However, perhaps most notably management also said that the company opened 259 net new stores, all in Mainland China, bringing the company-wide total to 4,850 (see below chart<\/em>).<\/p>\n\n\n\n

Chow Tai Fook\u2019s store count has surged in recent years as the company uses a franchising model to leverage \u201clocal knowledge\u201d in new Mainland China markets. The strategy allows the company to penetrate smaller but rapidly growing cities colloquially referred to as \u201cTier III, IV and V\u201d sized cities.<\/p>\n\n\n\n

For context, \u201cTier I\u201d cities are understood to include the top four or five largest cities in the Mainland, e.g. Beijing, Shanghai, Guangzhou and Shenzhen. \u201cTier II\u201d is considered to include roughly 30 \u201clarger\u201d cities and \u201cTier III\u201d approximately 70 emerging cities, and so on. It is estimated that there are now over 170 cities in Mainland China that host a population in excess of one million people, with many more likely on the way according to current growth rates.<\/p>\n\n\n\n

Chow Tai Fook has almost doubled its store count over the last five years and almost quadrupled it over the last decade. Other major jewellers in China, including Luk Fook and Chow Sang Sang, also continue to aggressively open new stores. For instance, Luk Fook has plans to open 360 net new stores in the fiscal year ending March 2022, which would boost the company\u2019s store count by over 15% to 2,322 locations.<\/p>\n\n\n\n

\"\"<\/a><\/figure><\/div>\n\n\n\n

Mainland China has shown to be the diamond jewellery industry\u2019s strongest consumer market in recent years led by strong domestic luxury consumption which has been boosted by pandemic-related lockdowns and travel restrictions that have essentially halted Chinese tourism spend abroad, especially in primary markets such as Japan, Western Europe and the Americas.<\/p>\n\n\n\n

\"\"<\/a>
Chow Tai Fook white diamond necklace decorated with nearly 17 carats of diamonds with excellent cut grade.<\/figcaption><\/figure><\/div>\n\n\n\n

However, even post-pandemic, Chow Tai Fook management has indicated that it expects this trend in domestic consumption growth to continue and even accelerate thanks to government-driven policies aimed at supporting Chinese-buying-at-home. In a recent market update, the company said that it expects \u201csales in the consumer market in Mainland China (to) surge rapidly in coming years,\u201d referencing the Chinese government\u2019s \u201cDual Circulation Strategy\u201d and \u201c14th Five-Year Plan.\u201d<\/p>\n\n\n\n

The former is a Chinese economic policy that was implemented in early-2020 specifically aimed at stimulating domestic consumption and investment. The latter is the latest in a series of social and economic development initiatives first implemented by the Government in 1953.<\/p>\n\n\n\n

\"\"<\/a>
Chow Tai Fook Australian Colours diamond ring<\/figcaption><\/figure><\/div>\n\n\n\n

With the latest \u201cFive-Year Plan,\u201d which runs from 2021 through 2025, the economic aim is to \u201cstimulate consumption in all sectors\u201d driven by middle-class growth. The Plan includes early-stage initiatives to grow the per capita GDP in China to the equivalent of $30,000 by 2035, which would be almost three times the 2020 level.<\/p>\n\n\n\n

For context, per capita GDP in the US, Japan and India (three of the diamond industry\u2019s largest markets) is about $65,000, $40,000 and $2,100, respectively, according to the World Bank. China has a population of about 1.4 billion people; the US, Japan and India, have an estimated 330 million, 125 million and 1.4 billion people, respectively.<\/p>\n\n\n\n

\u2014<\/p>\n\n\n\n

Paul Zimnisky, CFA is an independent diamond industry analyst and consultant based in the New York metro area. For regular in-depth analysis of the diamond industry, please consider subscribing to his <\/em>State of the Diamond Market<\/em><\/a>, a leading monthly industry report; an index of previous issues can be found <\/em>here<\/em><\/a>. Also, listen to the <\/em>Paul Zimnisky Diamond Analytics Podcast<\/em><\/a> on iTunes or Spotify for wide-ranging and interesting discussions with prominent guests from around the industry. Paul is a graduate of the University of Maryland\u2019s Robert H. Smith School of Business with a B.S. in finance and he is a CFA charterholder. He can be reached at paul@paulzimnisky.com and followed on Twitter <\/em>@paulzimnisky<\/em><\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Mainland Chinese jewellers continue to open new stores at a record pace as the government stimulates domestic consumption. In the company\u2019s most recently concluded fiscal quarter, i.e. calendar-Q2, China\u2019s largest jeweller Chow Tai Fook said it saw company-wide sales soar 70% year-over-year driven by \u201cbuoyant consumer sentiment” in Mainland China and \u201ccontinued recovery\u201d in Hong…<\/p>\n","protected":false},"author":7,"featured_media":10263,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96,100,107,79],"tags":[],"thb-sponsors":[],"class_list":["post-10259","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-diamonds","category-in-focus","category-retail","category-viewpoint"],"acf":[],"yoast_head":"\nChina Driving Global Diamond Demand - Solitaire magazine is a International jewellery magazine - India\u2019s leading B2B gem and jewellery magazine<\/title>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gjepc.org\/solitaire\/china-driving-global-diamond-demand\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"China Driving Global Diamond Demand - Solitaire magazine is a International jewellery magazine - India\u2019s leading B2B gem and jewellery magazine\" \/>\n<meta property=\"og:description\" content=\"Mainland Chinese jewellers continue to open new stores at a record pace as the government stimulates domestic consumption. In the company\u2019s most recently concluded fiscal quarter, i.e. calendar-Q2, China\u2019s largest jeweller Chow Tai Fook said it saw company-wide sales soar 70% year-over-year driven by \u201cbuoyant consumer sentiment” in Mainland China and \u201ccontinued recovery\u201d in Hong…\" \/>\n<meta property=\"og:url\" content=\"https:\/\/gjepc.org\/solitaire\/china-driving-global-diamond-demand\/\" \/>\n<meta property=\"og:site_name\" content=\"Solitaire magazine is a International jewellery magazine - India\u2019s leading B2B gem and jewellery magazine\" \/>\n<meta property=\"article:published_time\" content=\"2021-07-26T08:16:07+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-07-26T08:16:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/gjepc.org\/solitaire\/wp-content\/uploads\/2021\/07\/shutterstock_1647125761.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1100\" \/>\n\t<meta property=\"og:image:height\" content=\"734\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebSite\",\"@id\":\"https:\/\/gjepc.org\/solitaire\/#website\",\"url\":\"https:\/\/gjepc.org\/solitaire\/\",\"name\":\"Solitaire magazine is a International jewellery magazine - India\\u2019s leading B2B gem and jewellery magazine\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":\"https:\/\/gjepc.org\/solitaire\/?s={search_term_string}\",\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/gjepc.org\/solitaire\/china-driving-global-diamond-demand\/#primaryimage\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/gjepc.org\/solitaire\/wp-content\/uploads\/2021\/07\/shutterstock_1647125761.jpg\",\"width\":1100,\"height\":734,\"caption\":\"HONG KONG, CHINA - CIRCA JANUARY, 2019: jewelleries on display at Chow Tai Fook store in Hong Kong.\"},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/gjepc.org\/solitaire\/china-driving-global-diamond-demand\/#webpage\",\"url\":\"https:\/\/gjepc.org\/solitaire\/china-driving-global-diamond-demand\/\",\"name\":\"China Driving Global Diamond Demand - Solitaire magazine is a International jewellery magazine - India\\u2019s leading B2B gem and jewellery magazine\",\"isPartOf\":{\"@id\":\"https:\/\/gjepc.org\/solitaire\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/gjepc.org\/solitaire\/china-driving-global-diamond-demand\/#primaryimage\"},\"datePublished\":\"2021-07-26T08:16:07+00:00\",\"dateModified\":\"2021-07-26T08:16:10+00:00\",\"author\":{\"@id\":\"https:\/\/gjepc.org\/solitaire\/#\/schema\/person\/ea2305127e1d68e988e609ab491604eb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/gjepc.org\/solitaire\/china-driving-global-diamond-demand\/\"]}]},{\"@type\":[\"Person\"],\"@id\":\"https:\/\/gjepc.org\/solitaire\/#\/schema\/person\/ea2305127e1d68e988e609ab491604eb\",\"name\":\"Paul Zimnisky\",\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/gjepc.org\/solitaire\/#personlogo\",\"inLanguage\":\"en-US\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/fc6568cf8462f6003472ad7b3184d356aa41ba4ab0b787f823645682337c2ac5?s=96&d=mm&r=g\",\"caption\":\"Paul Zimnisky\"},\"description\":\"Paul Zimnisky, CFA, is a leading global diamond industry analyst based in the New York City metro area specializing in global diamond supply\/demand fundamentals and the companies operating within the industry.\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","_links":{"self":[{"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/posts\/10259","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/comments?post=10259"}],"version-history":[{"count":1,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/posts\/10259\/revisions"}],"predecessor-version":[{"id":10265,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/posts\/10259\/revisions\/10265"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/media\/10263"}],"wp:attachment":[{"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/media?parent=10259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/categories?post=10259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/tags?post=10259"},{"taxonomy":"thb-sponsors","embeddable":true,"href":"https:\/\/gjepc.org\/solitaire\/wp-json\/wp\/v2\/thb-sponsors?post=10259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}