Chen Shen’s Post

The price of #gold hit hard on #jewelry sales in China. This confirms what I see at factory orders and hear from retailers. Chow Tai Fook: Retail Value Decreased by 20.2% Year-on-Year in April-May 2024 On June 13, Hong Kong-listed company Chow Tai Fook Jewelry Group Limited (#CTF) announced its unaudited key operating data for the period from April 1 to May 31, 2024. During the reporting period, the group's retail value decreased by 20.2% year-on-year. Among these, mainland China saw a year-on-year decrease of 18.8%, while Hong Kong, Macau, and other markets experienced a year-on-year decrease of 29%, accounting for 87.7% and 12.3% of the group's retail value, respectively. By product category, from April 1 to May 31, 2024, CTF's same-store sales of jewelry, platinum, and K-gold jewelry in mainland China decreased by 32.9% year-on-year, and by 31.1% year-on-year in Hong Kong and Macau. CTF's same-store sales of gold jewelry and products in mainland China decreased by 29.8% year-on-year, and by 34.6% year-on-year in Hong Kong and Macau. #Chinamarket

On Tuesday, 16 January, China’s biggest jewellery and accessories retailer admitted that the country’s economic confidence has not yet returned to its former pre-pandemic glory. Chow Tai’s managing director, Kent Wong, noted that consumers and investors alike are turning away from precious jewels and instead opting for gold consumption, a move that suggests little confidence in national and global financial stability. https://lnkd.in/en9PxPJT #chinesemarket #asianmarkets #economicoutlook

Hong Kong-listed Chinese jeweller Tse Sui Luen is expecting to post a loss of at least HK$220 million (US$28.1 million) for the year ended March 31. The net loss attributable to its owners is likely to be three times the HK$71 million (US$9 million) loss of the prior year. The group said the loss was mainly due to the significant decline in consumer demand for natural diamond jewellery in Mainland China and the diminishing profit margins from its transition to selling 24-karat gold products at a much higher percentage. Inside Retail Asia

Sadly for Hong Kong and China consumers, it seems unlikely that Chow Tai Fook will be offering lab-grown diamonds. Jewellery retailers in Hong Kong and China are enjoying robust 24K gold sales so they are not eager to disrupt the momentum of even younger consumers buying pure gold jewellery. I remain skeptical that CTF will double down on stocking more natural diamonds but playing ostrich about lab-grown diamonds helps their bottom-line. There is old Chinese saying that everyday you can delay, you gain the extra day of profits. How true. I am surprised that no US or European brands are giving CTF a run for their money. Maybe instead of opening TanishQ stores in New Jersey, the Titan Group will set up a lab-grown retail presence in Hong Kong but as the major player in India, they also think the time is not ripe for an LGD play in India. Where are the disrupters ?

As we enter May, the trajectory of China's jewelry industry for the remainder of the year is beginning to take shape. While the economy is gradually rebounding, the stock markets in Shanghai and Hong Kong have surged over the past three months, technically entering bull territory. However, a significant challenge looms in the form of gold prices, which have dampened demand within the jewelry sector. Official statistics for China's #jewelry industry in Q1 have been released, revealing notable trends. In March 2024, retail sales of gold, silver, and jewelry consumer goods rose by 3.2% year-on-year. Moreover, total retail sales for these items in Q1 witnessed a solid increase of 4.5% year-on-year, indicating sustained growth momentum. Recent data from the China #Gold Association highlights a substantial uptick in national gold consumption during the first quarter of 2024, reaching 308.905 tons—a significant 5.94% increase from the previous year. While the consumption of gold coins and bars surged by 26.77% year-on-year to 106.323 tons, gold jewelry consumption experienced a slight decline of 3.00%, likely due to the adverse impact of soaring gold prices on consumer demand. Pure gold jewelry, once the shining star of the Chinese market, has seen sluggish sales in April and May amidst record-high gold prices. Reports from jewelry manufacturers indicate a decrease in orders and working hours as a result. Additionally, there are signs of cooling demand for pearls. Rather than witnessing a price increase, it is anticipated that prices may undergo a decline, particularly among low and middle-grade goods, before affecting high-end products. #ChinaJewelry #Chinamarket

Conditional selling refers to a situation where a seller refuses to sell a particular product or service unless the buyer agrees to purchase additional goods or services. It is important to note that conditional selling is considered a violation of the FCCC Act 2010, and no trader or agent should engage in this practice. If you come across any instances of conditional selling, we strongly encourage you to report them to us with evidence through our complaint channels at https://lnkd.in/g3xPTpdT By reporting such cases, you are helping us safeguard the rights of Fijian consumers and promoting a fair marketplace. #FCCC #FijianConsumerRights #TeamFiji #Fiji

Conditional selling refers to a situation where a seller refuses to sell a particular product or service unless the buyer agrees to purchase additional goods or services. It is important to note that conditional selling is considered a violation of the FCCC Act 2010, and no trader or agent should engage in this practice. If you come across any instances of conditional selling, we strongly encourage you to report them to us with evidence through our complaint channels at https://lnkd.in/g3xPTpdT By reporting such cases, you are helping us safeguard the rights of Fijian consumers and promoting a fair marketplace. #FCCC #FijianConsumerRights #TeamFiji #Fiji

Actually, after 2019, the proportion of counterfeits in China has been decreasing, because on the one hand, China's production capacity remains at the original level, but the orders of international brands in China are gradually declining. These domestic production capacities need to consider establishing their own brands. Second, the Chinese market now prefers more and more new brands, especially local brands, which feel that they will be closer to their own needs. Third, China's development has some new concepts of its own, including equality, greening, cultural experience, etc., which also give some new opportunities to local brands. Therefore, after 2019, the proportion of counterfeits has actually decreased. When international brands come to China for development, the challenge may not come from counterfeit goods, but from local brands. Of course, many international brands are still performing very well because they know and respect the local market enough.

Sale of pure gold jewelry is THE bright spot in Chinese jewelry business in the last 3 years. In the past few days, with daily new high on gold price, Chinese pure gold retailing is suddenly slowing to halt. Consumers are waiting and hesitant to buy gold at new high. Retailers are hesitant to restock. Some pure gold factories suddenly have to tell overworked staffs to take vacation because of lack of orders. They made the right decision. Today, we see a small retreat on gold price. The high gold price is also felt at 18k gold #jewelry segments. Consumers have price shock and are slow to place orders. If the #gold price continues to go up, we will see a big drop on gold jewelry sales everywhere. The sales of #diamond and colored stones will also be affected negatively. I will watch how the retail sale of gold is this weekend in China. #chinajewelry #chinaluxury #chinamarket #diamondjewelry