Chinese gold jewellery manufacturers are increasingly targeting markets in the Middle East and India as they navigate challenges stemming from volatile gold prices and shifting consumer demands. Industry representatives highlight the growing interest in Chinese craftsmanship and advanced production techniques at recent trade events.
At the latest Jewellery & Gem World Hong Kong fair, buyers from the Middle East and India constituted the majority of visitors, according to Wang Lixin, China CEO of the World Gold Council (WGC). This uptick in attention is attributed to heightened demand for innovative jewellery products amid fluctuating gold prices, as well as advancements made by Chinese producers in what is known as hard pure gold. This technique produces jewellery that is thinner and more durable without adding extra weight.
Wang noted that consumers in both regions show a preference for inlaid jewellery designs, an area where Chinese firms believe they can leverage their technological expertise to meet local tastes. Historically, overseas buyers primarily sought Chinese manufacturers for cost-effective options based on existing designs. Now, however, Chinese jewellers are focusing on adding value through unique designs and enhanced production methods.
Data from the China Gold Association reflects a notable shift within the domestic market. Gold jewellery consumption in China fell by 34% year on year in the first half of 2022, dropping to 132 tonnes. Meanwhile, investment in gold coins and bars saw a 28% increase, reaching 339 tonnes over the same period. In the second quarter, India overtook China as the largest gold jewellery market worldwide, accounting for 27% of global demand, according to a WGC report.
“The domestic market is currently undergoing a period of adjustment and transition, influenced by macroeconomic factors and persistently high gold prices,” Wang said. He added that these challenges are expected to continue in the near term.
To facilitate business connections, the WGC has organized visits by leading Middle Eastern wholesalers to inspect factories and showrooms in Shenzhen, while also supporting Indian retail leaders’ attendance at international exhibitions to explore collaborative opportunities.
Sharon Weng, vice-president of branding and products at Yuehao Jewellery, a Shenzhen-based firm with roots dating back to 1926, confirmed growing interest from Middle Eastern and Indian clients, alongside steady demand from Japan and South Korea. For the Japanese market, Yuehao introduced collections featuring “black gold” last year, employing electroplating and oxidation techniques to create gold with a distinctive black finish.
Despite expectations of further interest rate hikes by the U.S. Federal Reserve, gold prices have remained relatively stable, buoyed by continued purchases from global central banks amid ongoing geopolitical uncertainties.
Wang emphasized that in addressing current market conditions, jewellery manufacturers should prioritize advancing their crafting and design capabilities rather than focusing solely on raw material costs. He underscored that Chinese producers have made significant progress over the past five years, with manufacturing capabilities evolving rapidly and continuously.