China’s Gold jewellery demand grow by 3% in 2018: WGC
SHANGHAI (Scrap Register): Annual Chinese gold jewellery demand grew by 3% in 2018, but recovery stalled in Q4. Full-year Chinese jewellery demand reached a three-year high of 672.5t, according to World Gold Council.
But Q4 demand slipped 3% to 174.8t as the local gold price spiked sharply higher in October and economic growth continued to slow. Furthermore, the ‘Golden week’ holiday in October did not provide the usual boost to jewellery demand that it has done in the past.
The role of this holiday as a shopping occasion is gradually fading as consumers increasingly use it instead as an opportunity to spend on experiences, such as travel. We expect this trend to continue in 2019.
Although consumer sentiment was undermined in Q4 by China-US trade friction and a lacklustre domestic stock market, this was countered by tax cuts aimed at stimulating consumption. Certain sectors of the gold jewellery market were robust, with ultra-high purity products (9999s or 99999s)2 performing well in some regions and 3D hard gold continuing to grow.3 By contrast, the traditional 24K category lost market share, although demand for these products still dominates the market.
The retail industry continues to expand and innovate. The jewellery retail network extended further throughout 2018, with leading branded retailers leading the charge. Already well-established in Tier 1 and 2 cities, these retailers are increasingly penetrating into Tier 3 and 4 cities.
At the same time, they continue to focus on product innovation. One of the newest products brought to market is “Mirror Gold”: a 999s product, with a shiny, smooth mirror-like surface, targeted at a younger generation, who prefer simpler fashionable designs.