As it regains its economic footing after coronavirus-containment measures, the Chinese jewellery industry is adjusting its strategies to better respond to changes in the market.
MCLON Jewellery Co Ltd Chairman Sun Songhe
Bojem Jewelry Co-Founder Joyee Zhao
Shanghai Zbird Co Ltd Brand and Marketing Director Xu Xiaoxue
Shanghai Diamond Exchange Board Director and Vice President Caroline Yuan
Shenzhen Xingguangda Jewelry Industrial Co Ltd Chairman Lin Changwei
This article first appeared in the JNA January/ February 2021 issue.
For China’s jewellery market, the new normal refers to both the repercussions of the Covid-19 pandemic and the changing preferences of local consumers.
At the JNA Awards-organised Return & Recovery: China’s Perspective webinar in late October 2020, industry representatives revealed that the jewellery market is being shaped by Covid-19 containment efforts and major shifts in consumer habits as members of Generation Z (born after 1995) become the country’s main spending group.
Caroline Yuan, board director and vice president of the Shanghai Diamond Exchange (SDE), said China’s diamond and jewellery market is steadily recovering from the coronavirus-induced downturn.
Citing SDE data, she disclosed that polished diamond imports in August and September 2020 rose to 93 per cent and 160 per cent respectively of their levels in the same periods in 2019.
Yuan was confident the industry would overcome unprecedented changes brought about by the pandemic. “Jewellery has survived through history. It will not lose its shine as time passes as it appeals to the human pursuit of beauty,” she commented. “Jewellery businesses should stay away from competing on prices and instead properly market their products by enhancing their aesthetic value through designs and craftsmanship.”
Also impacting China’s jewellery market is the rise of the Gen Z consumer.
Sun Songhe, chairman of MCLON Jewellery Co Ltd, expects fashionable jewellery for daily wear to gain favour over big-ticket items as Gen Z consumers no longer consider jewellery as luxury goods but still put a premium on quality.
“Consumers no longer obsess over big brands. They now seek brands that share their values or have an affinity with them. This would mean golden opportunities for Chinese jewellery brands,” Sun remarked.
Joyee Zhao, co-founder of Bojem Jewelry, agreed that consumers are now more cautious with their spend and hesitate to purchase higher-priced jewellery pieces. More affordable jewellery move faster, she noted.
The boom of livestreaming as a sales and marketing channel is another game changer for the Chinese market, she added. “Consumers relied on livestreaming to buy their jewellery during the lockdown. This has become a regular and reliable channel for the market,” she explained.
Innovation in business
Jewellers have rolled out new measures and accelerated the adoption of digital initiatives to navigate in and beyond a Covid-19 world.
Shanghai Zbird Co Ltd recently launched the Zbird Wedding Ring Master WeChat mini programme that allows customers to select and design their own ring online. The app is powered by an advanced 3D try-on service and allows customisation of every single detail of the ring.
Targeted at young consumers, the app proved successful during the lockdown period, with more than 30 per cent of users spending as many as three days on it. Average spending per order is also much higher than at Zbird’s physical stores, said Xu Xiaoxue, the company’s brand and marketing director.
Bojem meanwhile capitalised on new media to stay connected to customers. It has leveraged different online sales channels such as WeChat circle, Taobao, Tiktok and RED with specific product strategies to cater to different customers on those channels.
To boost consumer confidence amid economic uncertainty, Bojem enabled a “buy-back” policy for big-ticket items. The company has also hired more salespeople for livestreaming sessions and created an elegant and upscale e-commerce customer interface to give consumers the same feeling of exclusivity when buying luxury products offline.
Zhao however noted that the key to success as an online business lies in building trust and relationships with customers, which she took years to establish.
“Technically speaking, livestreaming and advanced tools help to drive sales as they enable customers to clearly view the products on the Internet. But what’s more important is that they trust you,” she said.
Moving forward, brands need to develop accurate positioning by offering a more focused product mix to a more targeted group of consumers, MCLON’s Sun said. They should also restructure their existing business model, communications, service and supply chain to transform to the “New Retail,” he added.
Coined by Alibaba’s Jack Ma, “New Retail” has become one of the biggest buzzwords in China’s retail strategy. It refers to a new business model that blends online and offline commerce through the digitalisation of the entire retail value chain through the power of new technologies and data science.
“Online channels and big data management are becoming ‘standards’ for a jewellery company. Online business will be complementary to offline business – consumers get to learn about the brand online and get to know the brands in person at physical stores, which serve to support the brand’s value,” Sun noted.
Shenzhen Xingguangda Jewelry Industrial Co Ltd is also stepping up its digital initiatives to cater to its customers’ requirements in today's changing retail landscape. The jewellery manufacturer has actively launched collaborative projects with business partners to build a more effective, flexible and resilient supply chain for the trade, disclosed company chairman Lin Changwei.
Xingguangda has set up an online ordering centre for its customers and shares real-time inventory information with business partners through its central warehouse digital platforms, “Colour Jewellery Steward” for gemstones and “Ju Bao Hui” for finished jewellery. These digital initiatives are borne from the company’s continuous investment in big data management over the years, Lin noted.
The company has also been transforming to smart manufacturing by adopting advanced technologies in production, such as CNC, 3D printing and industry 4.0 in production lines that can improve efficiency and better cater to consumers’ demand for personalisation.