Analysis: Chinese Consumers Give a Boost to Jewelry Store Openings
In an article titled “China Driving Global Diamond Demand” and published on GJEPC’s website, diamond market analyst Paul Zimnisky writes that Mainland China’s demand for jewelry is driving the opening of an unprecedented number of new jewelry stores.
Chow Tai Fook, China’s largest jeweller, saw its sales soar 70% year-on-year in Q2 2021, driven by “buoyant consumer sentiment” in Mainland China and “continued recovery” in Hong Kong and Macau markets. Most notable, Zimnisky says, Chow Tai Fook opened 259 net new stores – bringing it to a toal 4,850 stores.
And Chow Tai Fook is not alone. Luk Fook, another major jeweller in China, opened 360 new stores in the fiscal year ending March 2022, boosting its total number of stores by 15% to 2,322 locations. Chow Sang Sang, another major jeweller, “also continue[s] to aggressively open new stores.”
According to Zimnisky, “Mainland China has shown to be the diamond jewellery industry’s strongest consumer market in recent years[…]”. Sure enough, recent data released by the Shanghai Diamond Exchange (SDE) recently shows $3.82 billion in total rough and polished transactions in the half-year to June 2021 – a rise of over 86% on the same period in pre-Covid 2019. Imports of polished diamonds totaled $1.58 billion – up by almost 50% compared to the first half of 2019.
The country is also enjoying a wedding boom. According to the same report, 2.1 million new couples registered for marriage certificates in Q1 – a rise of 37% compared to the same period in 2020.
In January-February 2021 alone, according to China’s National Statistics Bureau, jewellery sales in China rose 99% year-on-year. Total retail sales increased 33.8% in January-February 2021 compared to the same months in 2020. The rise is attributed to “effective containment of the Covid-19 virus” as well as “a steady recovery in investment and consumption, stable employment and prices that safeguarded people’s basic livelihoods with the sustained steady recovery of the national economy”.
In 2020, jewellery sales in China went down 4.7%. These began to recover in July. In December, sales of gold, silver and jewellery rose 11.6%. According to the World Bank, China’s economy is expected to grow 7.9% in 2021.