Generation Z is obsessed with gold jewelry?
In 2021, a survey by the World Gold Council showed that 59% of Chinese consumers aged 18-24 had never bought gold jewelry, but were considering it; In 2016, this figure was only 16%.
This set of data broke the stereotype that “aunts prefer gold jewelry” in people’s cognition, and retailers lamented that whoever mastered the “post-90s and post-00s” will master the future. Behind the change, is it the return of aesthetics and concepts of generation Z, or is the gold jewelry market beginning to move closer to young people?
“Gold is stable and relatively resistant to manufacturing”, “some are very good-looking, and the price is also appropriate” and “gold can preserve its value”. In an interview, the reporter of the 21st Century Business Herald found that the factors for the young generation of consumers to consider buying gold jewelry are mainly concentrated in three aspects: beauty, texture and preservation rate.
With the help of Guochao, innovation and the creation of various IP series products, the gold first jewelry has gradually grasped the preferences of generation Z and ushered in new vitality.
Generation Z’s infatuation, beauty is justice?
“Gold earrings, gold bracelets, gold necklaces and transfer beads, I didn\’t find myself buying so many gold jewelry.” Li Jing told the 21st Century Business Herald about her consumption of gold jewelry, “although there is no habit of hoarding gold, it will be made up if it is missing.”
On the one hand, compared with silver, gold is more stable and difficult to oxidize, and there is no need to pay too much attention to wearing. Although gold is soft, K gold can make up for this disadvantage and is not easy to deform; On the other hand, gold jewelry has a certain value preservation. Li Jing’s transfer beads were purchased for 1400 yuan and sold for 1000 yuan, with a relatively small loss, which is an incomparable advantage for jewelry made of other materials.
It can be said that Li Jing is a typical representative of generation Z gold consumers. In an interview with other young consumer groups, the 21st Century Business Herald reporter found that gold jewelry is generally endowed with the dual attributes of beauty and investment.
A consumer told reporters that part of the reason why he bought gold was because of value preservation. Since jewelry is for decoration, choosing to preserve value feels more cost-effective. And now the gold style is also very good-looking, combined with national style elements, some joint models are also very attractive. Another consumer also told reporters that the purchase mainly depends on the appearance design, which should be beautiful and special enough.
Some young people seem to be enthusiastic collectors of gold jewelry. Some netizens sun out their jewelry boxes, which can be called a small Treasury. There are gold necklaces, gold pendants, gold earrings, gold rings and gold bracelets in different styles. Girls who are addicted to buying gold jewelry say, “when they are rich, they will be jewelry, when they are poor”, “they don\’t know the fragrance of gold when they are young”, “they go farther and farther on the road of buying gold”, “they can\’t walk when they see gold at the age of 22…”.
However, a few years ago, in the survey report of the World Gold Council in 2016, the purchase intention of Chinese women aged 18-24 was only 16%. The main reasons why young people don\’t love gold jewelry are “old-fashioned”, “high-profile” and “upstart temperament”. Through an interview with Chinese women aged 18-24 who have considered buying gold jewelry but have never actually bought it, it is learned that the main factors hindering their purchase are “not suitable for my style”, “can\’t find favorite products” and “cheap jewelry looks as good”. It can be seen that attraction or fashion sense is the most important factor that hinders young people from buying.
For a long time, influenced by marriage customs and habits, gold jewelry is the main fashion and lifestyle products in China, but it also faces increasingly fierce competition from other fashion and lifestyle products such as luxury goods and cosmetics, fashion silver jewelry and technology.
Gold jewelry should change with time, and the change is obvious. Different from the traditional regular style, the current gold jewelry pays more attention to the sense of design and gives it various beautiful meanings to attract more young consumers.
The reporter learned that in addition to the differences in fineness of full gold and K gold (common K white, K yellow and K red), there are also differences in the process flow of gold jewelry, such as 3D hard gold, ancient gold and 5g gold. Among them, ancient gold has a long production cycle, thick workmanship and retro patterns, so the manual cost is generally high. Compared with the first two techniques, ancient Fajin is a traditional handicraft. On September 29, 2021, “ancient gold making technology” officially became the fifth batch of representative projects of intangible cultural heritage in Beijing.
It seems a little complicated, but it can\’t stop those young gold jewelry lovers. The new generation of young people represented by generation Z are gradually becoming “professional consumers”. In order to buy value for money jewelry, they can spend a lot of time and energy to study the brand, material, technology and history. Because they are good at doing their homework, they know more about the actual quality of goods and have more judgment. They often summarize a set of buying skills and pit avoidance guidelines and are willing to share them.
It can be said that generation Z’s infatuation with gold jewelry is not a whim, and “beauty is justice” is not all.
However, purely from the perspective of investment, gold jewelry is obviously not the first choice. Cheng Yu, a professional investor, believes that, “The investment attribute of gold jewelry is very poor. Because jewelry is processed gold. First, the processed gold has processing loss, which should be included in the purchase and sale price. Secondly, the recovery of jewelry gold is also a difficult problem, not who sells it. Therefore, there must be another inspection fee. The standard investment gold bar has no above cost. It is produced only for investment. If it is investment, All banks have standard investment gold bars and all kinds of gold linked deposits. “
In fact, most gold stores promise customers that they can replace them, but they also have depreciation rules. In a Chow Tai Seng Jewellery Company Limited(002867) store on the Third Ring Road in Beijing, the reporter learned from the salesperson that “the gold jewelry in the store will be reduced by 20% when it is changed, whether it is bought by gram or by piece.”
The rules for Lao Feng Xiang Co.Ltd(600612) are different. The salesperson told reporters, “there is no depreciation fee. When changing 1g, it is still 1g, but the new jewelry has to be 1.2 times the original, and so is the piece jewelry.”
For gold investment, Yang Fan, vice president of the association diamond company, gave more specific suggestions, “it is best to choose physical gold bars and avoid choosing too fashionable gold jewelry. The fashion and complexity of the design will increase the labor cost of gold jewelry, which is not included in the process of investment realization.”
Innovation, national tide and IP
But for young consumers, gold jewelry will not depreciate completely, even if it cannot increase in value. The insight into the retail terminal trend of China National Gold Group Gold Jewellery Co.Ltd(600916) jewelry market in 2021 (hereinafter referred to as the “report”) released by the world gold association has investigated 542 jewelry retail stores in more than 20 cities from the first tier to the fifth tier in China. It is found that retailers are optimistic about the future yellow gold jewelry consumption of the younger generation of consumers.
According to the data released by the National Bureau of statistics, the retail sales of gold, silver and jewelry commodities reached 275.6 billion yuan from January to November 2021, with a year-on-year increase of 34.1%, ranking the first in the sub categories of retail commodities.
In the view of China National Gold Group Gold Jewellery Co.Ltd(600916) relevant officials, there are three main reasons driving the growth of gold and jewelry industry: first, the epidemic situation in China has been effectively controlled and the market consumption power has been released; Second, the unstable factors of the world economy have increased, and the high value preservation and anti inflation properties of gold have become more and more obvious, which has become an important choice for consumers to invest; Third, China’s economy is growing steadily, and consumers prefer gold and jewelry products.
According to the report, the total demand for China National Gold Group Gold Jewellery Co.Ltd(600916) jewelry in the first half of 2021 was 338 tons, which has returned to the average level before the outbreak of the epidemic (2010-2019), and the purchasing group is younger than before the epidemic. 48% of the retailers surveyed believe that the young group will contribute more purchasing power to the gold jewelry in the next 1-2 years.
The rise of generation Z customer base also benefits from the change of thinking of gold jewelry retailers. For example, Lao Feng Xiang Co.Ltd(600612) (SH, 600612) began to transform and develop into a young and fashionable image; Zhouliufu Wuxi Online Offline Communication Information Technology Co.Ltd(300959) makes concerted efforts to attract young consumer groups; Chow Tai Fook (HK, 01929) not only focuses on traditional gold jewelry, but also specially packs a new series for young people; Beijing Caishikou Department Store Co.Ltd(605599) (SH, 605599), China National Gold Group Gold Jewellery Co.Ltd(600916) (SH, 600916) and the above companies have in common is to cooperate with popular IP to develop trendy products.
Under the purchase preference of “beauty is justice”, the gold jewelry industry has made great efforts to innovate, and retailers\’ product design shows the characteristics of youth. Especially driven by the concept of “national tide”, all kinds of IP products have sprung up.
The research results jointly released by People.Cn Co.Ltd(603000) Research Institute and Baidu company in May 2021 show that the proportion of post-90s and post-00s among Guochao followers in the past year reached 74.4%. Therefore, the thick and heavy ancient gold jewelry integrated with Chinese traditional cultural elements is not only welcomed by wealthy middle-aged consumers, but also favored by Chinese young people.
Take Beijing Caishikou Department Store Co.Ltd(605599) as an example, it cooperates with the Forbidden City to launch the “palace craftsman gold” series, which takes the elements of the Forbidden City from products to packaging and props; Cooperate with the summer palace to launch the “lifetime summer decoration” series. The designer takes materials from the field and integrates the elements of the summer palace into the product design. IP products are a category that Caibai has always adhered to, including Nezha products, marvel series products, cat and mouse, Mifei, qingpingle, Dunhuang cooperation products, etc.
According to Beijing Caishikou Department Store Co.Ltd(605599) , the sales channels are mainly Caibai’s own channels, with a growth rate of about double digits. The authorization period of strategic cooperation such as the Forbidden City and the summer palace is long, and the authorization period of other products varies. The zodiac category is about 1-2 years. The reporter noted that this kind of gold jewelry with both design, moral and cultural attributes has a strong attraction to young consumer groups, and will be widely used by Amway to netizens.
From the research of the World Gold Council, IP products bring more soft benefits to stores. The most obvious effect of introducing IP products by merchants is not the income, but the image improvement and differentiation with similar competitive stores. Secondly, IP products can also effectively divert customers for stores. In terms of directly increasing sales and profits, Beijing Caishikou Department Store Co.Ltd(605599) and China National Gold Group Gold Jewellery Co.Ltd(600916) both said that the overall gross profit margin of IP products was OK; Attracting consumers with IP products is not only conducive to improving gross profit margin, but also conducive to publicizing traditional culture.
In addition to making efforts in appearance, gold jewelry enterprises have also made innovations in sales channels and consumer experience. Kwai tiktok, a social media that represents WeChat group and friends circle, will become the main marketing force for future retail outlets, such as micro-blog, jitter, and fast hands. Store promotion is no longer the main marketing and customer acquisition channel, and the importance of live broadcast sales has also been reduced.
When accepting the 21st Century Business Herald reporter, the relevant person in charge said, “The influence of private traffic and social media on brand marketing has gradually become prominent, and the company has paid great attention to it. While paying attention to the construction of existing online channels, the company will gradually strengthen the brand construction of private traffic and social media, so as to enrich the company’s online channels and increase the proportion of online sales.”
This does not mean that live sales and stores are no longer important. Take China National Gold Group Gold Jewellery Co.Ltd(600916) as an example. In the first half of 2021, tiktok won the first prize in the gem list, the second in the business and fourth in the brand list, which stems from its layout of online channels. Tiktok is known to have collaborate with the electronic business platforms (such as Jingdong, jitter, Kwai, Xiao Hong) to build online channels. China National Gold Group Gold Jewellery Co.Ltd(600916) has also set up a Sino Gold Jewellery e-commerce (Changsha) Limited, integrating online platform resources, setting up live broadcasting bases, and increasing the development of e-commerce and live broadcasting platforms.
At the same time, the younger generation of consumers pay more attention to details, especially a comprehensive and refined sensory experience. Therefore, regardless of the rich evolution of the store form, the brand flagship store is still the most important sales channel in the eyes of the store manager, and the transformation and upgrading of many traditional retail stores have achieved very good results, such as experiential consumption, scene marketing, etc.
Yang Fan said, “The sales model of gold jewelry is very traditional. In mature jewelry markets such as the United States and India, jewelry sales rely on long-term customers of stores. Some customers will spend in the same store for three generations. This is very in line with the current trend of private traffic in China. Most of China’s retail stores are relatively new and it is difficult to accumulate old customers. Therefore, private traffic is very heavy Yes. Live consumption can not stimulate consumers of gold and traditional jewelry, because the product value is high, and customers are more likely to trust their familiar jewelry stores and sales consultants. The more high-value products are sold, the greater the stickiness of customers. Well done jewelry stores tend to have a higher proportion of repeat customers. “
