12 Nov 2014
Survey on Jewellery Shoppers in Chinese Cities: Purchasing Habits and the Hong Kong Premium (Executive Summary)
China's high-end consumer market receives much attention. In recent years, the frugality campaign of Chinese officials has severely affected the sales of many luxury goods. After stemming wasteful government spending and extravagant consumption, the consumption sentiment and patterns of mass consumers have increased in importance to the market as a whole, becoming the key to future growth.
The Hong Kong Trade Development Council (HKTDC) conducted successive surveys on jewellery shoppers in various mainland cities in 2002, 2004, 2007 and 2011. In order to track and understand the changes in the consumption concept, the purpose of purchase, price sensitivity, brand positioning and the latest trends in jewellery consumption, a survey was once again conducted in 2014 on jewellery consumption of 3,000 female consumers in 10 mainland cities, namely Beijing, Shanghai, Guangzhou, Hangzhou, Nanjing, Chengdu, Chongqing, Dalian, Shenyang and Wuhan. Based on the survey findings, recommendations are made for Hong Kong companies wishing to venture into the mainland jewellery market.
The findings of the survey are summarised as follows:
- The ratio of planned purchase has increased significantly. Planned purchase accounts for 66% of all respondents, increases significantly by 13 percentage points compared with the 2011 survey. The ratio of impulse purchase is 35%, with median ceiling price at Rmb3,000.
- Jewellery to complement everyday clothing is more common. Most respondents said that the main purpose of buying jewellery is to be trendy / to complement clothing. In the main, they wear jewellery when going to work. In addition, respondents indicated that style / design, quality / workmanship and brand / word-of-mouth are the most important considerations when buying jewellery.
- Necklace is the most popular jewellery type in the surveyed cities and among respondent groups. About 75% of respondents also said that they will give priority to buy necklaces in the coming year. In terms of jewellery materials, gold is preferred, followed by platinum and karat gold. The younger the respondent, the greater the interest in diamond jewellery. The higher the monthly household income, the greater the preference for buying jade / gemstone, diamond, and sapphire, ruby and emerald.
- Most respondents prefer simple, elegant and traditional Chinese designs. The younger the respondent, the more receptive to different styles of design, including trendy, classic European and exotic designs.
- In the past year, the median spending of respondents in the city of residence was Rmb4,000. About 87% of respondents expected the budget for buying jewellery in the coming year in the city of residence either to increase or remain unchanged. Consumers in the first-tier cities are more optimistic. In individual cities, however, there is a lack of growth momentum, and the price shows no obvious upside.
- Respondents visit jewellery stores mainly on weekends or public holidays. Department stores are the more popular spots to make jewellery purchase, while the proportions of street-level jewellery stores and chain stores have risen.
- Respondents have significantly reduced the use of mass media, such as TV commercials or newspaper advertisements to obtain jewellery information. They are unwilling to be passive receivers of information and begin to ignore traditional promotional tactics. Instead, they get information by personal experience, such as through jewellery stores or sales attendants.
- Compared with the 2011 survey, the levels of satisfaction in most cities have gone up. The majority of respondents reckon that the current sales channels and product styles of jewellery meet their expectations, however, the satisfaction level of product variety is relatively low.
- The image of Hong Kong jewellery brands in the mainland has been very positive and is perceived to be creative, of unique character and trendy styles. About 80% of the respondents reckon Hong Kong jewellery brands belong to the mid- to high-end segment while 30% consider as high-end. The average price premium for Hong Kong jewellery brands is 47%, while respondents of first-tier cities and higher-income groups are only willing to give a smaller premium.
The findings show that the purpose of buying jewellery in recent years has significantly changed, with more and more people wearing jewellery on a daily basis. Companies can go along with market needs in the aspects of style design and material, such as compact design, trendy and easy-to-match styles and materials suitable for everyday wear to attract consumers of younger age and lower purchasing power. In addition, in marketing materials and shop window design, they can highlight the overall fashion style of jewellery. Shops can be located adjacent to the fashion brands to arouse interest in jewellery among consumers purchasing fashionable apparels. Sales attendants also need to keep abreast with fashion trends and mix-and-match to assist customers in making purchase.
On the other hand, there is a significant increase in consumer demand for experiential consumption. Therefore, industry should pay attention to customers' shopping experience. Accordingly, shops may consider changing the decorative design to create a more comfortable shopping environment or do more in using shop space for experiential consumption promotional activities. In the age of information explosion, industry needs to step up efforts in marketing and creativity, such as making use of digital channels, membership system and customer data and purchase records collected from customers on an opt-in basis, to carry out targeted marketing and information push.
The lack of growth momentum in individual cities and absence of obvious upside in price may reflect the jewellery market has gradually saturated. The industry needs to be innovative in tapping market potential and create demand with new products. Industry players can consider developing new jewellery types, use different materials with different design styles to set new trends. In fact, transit beads, longevity locks and other non-traditional, non-mainstream jewellery are quite popular. Although overall speaking, gold is the most sought after, respondents in different cities, of different age and income groups also prefer other jewellery materials. In addition to mainstream minimalist style, younger consumer groups are relatively more receptive to different styles of design, such as trendy, classic European and exotic designs.
Despite the positive image of Hong Kong jewellery brands in the mainland, respondents of first-tier cities such as Shanghai and Guangzhou give a premium of less than 10% to Hong Kong brands. At the same time, even though respondents of monthly household income in the range of Rmb15,000 or above have the best impression of Hong Kong jewellery brands, the premium they give is the lowest among various income groups, of only 33%. This shows that they are not willing to give a particularly high price simply because it is a Hong Kong brand. Hong Kong industry needs to work harder to enhance brand value. Hong Kong jewellery brands are well advised to position themselves in the mid- to high-end segment. The brands are also competitive potentially in the high-end market though. The industry should consider capitalising on mainland consumers’ awareness of and goodwill towards Hong Kong brands, developing products of different materials, styles, designs and price ranges, and extending to other market segments in order to get more market share.
Please click here to purchase the full research report.