Takeaways from the Shenzhen Jewellery Fair 2019

I was in Shenzhen earlier this month attending various events held by major jewellers and industry bodies such as the Shenzhen Gold and Jewellery Association.

Attracting around 2,300 Chinese jewellers, the Shenzhen International Jewellery Fair 2019 is China’s leading jewellery conference and exhibition, showcasing cutting-edge innovations and exciting developments in China’s jewellery market.

Gerry Chen at the opening ceremony of 2019 Shenzhen International Jewellery Fair.

I was also fortunate enough to be given the opportunity to speak at some of these events, including the Fair. I spoke about our global gold market outlook and thoughts for further developments of China’s jewellery market. The major industry-specific topics I covered included:

• Guidance needed. While jewellery innovations have emerged one after another in China, proper product standards and industry guidance are urgently needed. The purity and hardness of products such as 3D hard gold, “5G” gold and others are variable and sometimes different from promised; the industry needs a unified standard to protect consumer and promote healthy development of the industry.
• Ride the rising gold price. As jewellery sales are vulnerable to rising gold prices, it is important for jewellers to alter operating strategies. For instance, lighter and cheaper pieces might grab more attention now. Moreover, jewellers need to do more to educate consumers the financial benefit of owning gold jewellery. Along with smooth trade-in and buy-back channels, higher gold prices might attract more customers to jewellery stores instead of chasing them away.
• Embrace the younger generation. Unlike older generations, many younger consumers do not view gold jewellery as relevant to their daily lives. This industry can respond to this challenge by offering fashionable, yet light-weighed product designs as well as better in-store experience are vital to attract their attention. I believe jewellers should focus on building their brands as well as their digital and social media presence.

Jewellery manufacturers and retailers launched various IPs to attract young consumers

• ESG. Environmental, social and governance (ESG) issues are becoming increasingly relevant in Chinese consumers’ jewellery purchasing decisions. I emphasised the emerging ESG and responsible sourcing issues globally and how they can influence consumers’ choices. I also briefly introduced our new Responsible Gold Mining Principles and appealed to jewellers to make more efforts in promoting responsible jewellery products.

At the jewellery Fair, the modern jewellery designs mixed with cultural elements and stunning innovations of harder, shinier and higher-carat products were dazzling. Products such as ultra-light 24K hard gold, 3D heritage gold and 5D gold – a more advanced category compared to 5G – caught lots of eyes.

And it was certainly encouraging for us to see the new cyanide-free technology already being applied in jewellery manufacturing, as well as stricter jewellery assay requirements, highlighting Chinese jewellery industry’s growing awareness of the importance of ESG issues.¹

Cyanide-free gold 2.0

Although China’s jewellery demand was relatively weak for the first half of 2019 as our most recent Gold Demand Trends reported, jewellers we met were confident in their sales for the remainder of this year. This confidence lies not only in the increasing number of shopping occasions such as the National Day Golden Week and 11/11 Shopping Mardi Gras in Q3 and Q4, but also in the eye-catching innovations and designs Chinese jewellers created.

3D heritage gold - weights only 1/3 of regular heritage gold.

Footnotes

¹ Cyanide-containing chemicals are often used in the electroplating process of jewellery manufacturing.