With gold prices rising and weak consumer spending in China, gold jewelry consumption by volume in China in the first half of this year plunged 30% from a year earlier, and more than 1,000 stores closed at just three major gold jewelry companies. But during the same period, Chinese consumers' spending on gold jewelry actually increased. The local industry pointed to a shift in how consumers buy gold. As consumers begin to value the added value of products—such as design and craftsmanship—over the weight of the gold, the spending structure in the gold jewelry market is changing, analysts said.
On the 10th, according to Chinese business outlet Maeil Business Newspape, Zhou Dasheng closed 473 stores in the first half of this year. Lao Feng Xiang cut 439, and Zhou Liufu reduced 226. That means 1,138 stores disappeared at these three companies in just half a year. In addition, Hong Kong jewelry brand Chow Tai Fook reduced 969 stores in China from the end of March last year to the end of March this year.
In its first-half report, Zhou Dasheng said, "Franchisees' willingness to restock has remained consistently weak," adding, "Overall, we are pursuing a strategy of reducing inventory." In fact, according to a report by the World Gold Council (WGC), China's gold jewelry consumption by volume in the first half of this year totaled 136 tons, down 30% from a year earlier. The decline widened.
◇ Volume down 30%, spending up 5%… "purposes for buying have changed"
But gold jewelry spending is showing the opposite trend. According to the WGC report, gold jewelry spending in the first half of this year was 143.7 billion yuan (about 2.8661 trillion won), up 5% from a year earlier. That contrasts with the 30% drop in volume.
While higher gold prices have pushed up product prices, the report said the purpose of buying gold jewelry is changing. According to the WGC, the share of "self-wear" demand—purchases made to wear the items personally—in China's gold jewelry market rose from 27% in 2024 to 44% this year.
As buyers move away from purchases for weddings or gifts and choose gold as jewelry to wear themselves, spending that prioritizes preferred designs and styles is growing. This also suggests more consumers are not evaluating gold jewelry solely by the "weight and price of the gold." Even as the purchase weight declines with rising gold prices, consumers are continuing to spend on differentiated value—such as design and craftsmanship—that reflects their tastes and individuality.
◇ Gold companies shift from "store expansion" to competition in "product differentiation"
Accordingly, competition among gold jewelry companies is changing. Analysts say the market is shifting away from simply adding stores and selling more gold, to one where companies must lead with design, craftsmanship, cultural meaning, and brand value to open consumers' wallets.
The local industry particularly assessed that the gold jewelry market is polarizing into "high-end craft pieces" and "light accessories." In its semiannual report this year, Zhou Dasheng said consumer segments in the gold jewelry market are clearly diverging. It analyzed that collectible high-end craft pieces target high-income buyers who value artistic value and asset preservation, while light accessory products target young consumers by emphasizing low prices and diverse designs.
In fact, Lao Pu Huangjin, a flagship brand that has emphasized high-end traditional craftsmanship, saw double-digit growth in both revenue and net profit in the first half of this year, and Chao Hongji, which targets young consumers, also saw increases in both revenue and net profit. By contrast, major players such as Zhou Dasheng, Lao Feng Xiang, and Zhou Liufu saw declines in both revenue and net profit during the same period. Even amid a sluggish market, companies that segmented products to fit consumer tastes and price points performed relatively well.
Maeil Business Newspape said, "Even with high gold prices, the enthusiasm to buy gold jewelry has not completely died out, but the logic of consumption has changed," analyzing that competition is shifting in earnest from price-and-weight-centered battles to drawing in consumers with product design, cultural meaning, and brand value.