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Albert Cheng, Managing Director, Far East, World Gold Council
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Regarded as symbols of prosperity and must-have luxury, the gold and coloured gemstone jewellery markets have continued to flourish, even during times of economic crisis. Indeed, the appetite among consumers in both China and India for gold and coloured gemstone jewellery is so great that the “axis of Asia,” according to the World Gold Council, continues to develop at a rapid pace.
Albert Cheng, the council’s Managing Director, Far East, described gold as an “integral part of Chinese religion.” Chinese demand for gold jewellery – especially 24-carat gold – makes China the fastest-growing market in the world, accounting for 400 tonnes in 2010. There is still room to grow; Chinese per-capita consumption is low compared to other markets with similar gold cultures.
Premium Status
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There’s growing demand for coloured gemstones from Chinese mainland consumers, especially among those who already own diamond and jade
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The outlook for gold and coloured gemstone jewellery is a key topic at this month’s HKTDC Hong Kong International Jewellery Show, 16-20 February. Mr Cheng will present a seminar on key gold trends, while Wilson Yuen, President of the International Colored Gemstone Association (ICA), will discuss coloured gemstones at the show.
Mr Cheng sees two distinct trends emerging in the gold jewellery market: China and India, he said, are set to take a bigger slice of the market; and the West is placing greater emphasis on gold jewellery’s premium status and on quality.
“The leading markets of India and China, which, for the first time, accounted for more than 50 per cent of world jewellery demand in 2010, will become even more significant and powerful,” Mr Cheng said. “Both markets have yet to fully exploit the potential of tier-three and -four cities. In major cities, opportunities for new concepts and lifestyle occasions will drive success.
“In the West, opportunity will move upwards. High-end consumers, searching for fewer, better things, will return to gold’s unique value proposition, combining emotional and intrinsic value in a way that defines true value,” Mr Cheng said.
On the mainland, wealthy customers are turning to coloured gemstones following their purchases of diamonds and fei cui (jade). “In the last few years, with the intensive promotion of coloured gemstones in China, the market foundation has been built and the demand is gradually increasing,” Mr Yuen said. “Rubellite and green tourmaline are the talk of the town because of the China market.”
Red and Blue
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Wilson Yuen, President, International Colored Gemstone Association
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Given Chinese preference for the colour red, Louis Lo, Chairman of the Gemmological Association of Hong Kong, expects such red gemstones as ruby and pink tourmaline to continue as the most popular coloured stones in the East.
Mr Yuen agreed that bright colours were hot. “The colour trend for the coming season is organe. The fire opal and spessartite garnet match this trend, and I think they will be in strong demand,” he noted.
Turning West, Mr Lo sees blue. “The colour blue – in other words, blue sapphire and tanzanite – will be the key colour this year,” he said. Despite the rising interest in coloured gemstones, however, Mr Lo does not anticipate that their popularity will overtake demand for diamonds.
“Diamonds will still be the first gemstone that a lady would like to own or receive, if she can afford it,” Mr Lo said. “But it has become fashionable to own unique coloured gemstones, such as rubies, sapphires, emeralds, tourmaline, tanzanite, especially once the diamond and the fei cui are already owned.”
Although demand for gold continues to rise, the World Gold Council is aware that it must drive new initiatives to expand its customer base. In 2003, the council established the K-gold project to target younger customers and explore the 18K gold product market. The project has been a success in China.
Fashionable Future
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China and India are set to take a bigger slice of the gold jewellery market
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“The 18K fashionable gold jewellery category is firmly established in China,” he said, noting that it now occupies 15 per cent of gold market share.
In the coloured gemstone sector, a strong push by the ICA in recent years has helped drive interest in China. “The China market used to be mainly gold, diamonds and fei cui, but the promotion of coloured stones has been pushed by ICA intensively for the last several years,” Mr Lo said.
Social media has also taken on a bigger role in the World Gold Council’s strategy, with interactive Facebook and Sina Weibo campaigns. “In 2012, we target to further promote our company and gold through new media interaction with consumers and investors through online interviews and digital campaigns,” Mr Cheng said.
Indian Demand
Both the gold and coloured gemstone markets are heavily focused on India. Unlike China, Mr Lo said that India was already a big market for emeralds and rubies. But he believes there is potential for further growth in the next few years, as is the case with gold.
“Gold demand in India is expected to grow by more than 30 per cent in real terms during the next decade, driven by rapid GDP growth, urbanisation, the strong emergence of a middle class and a sustained and potentially rising savings rate of 30 to 40 per cent,” Mr Cheng said. “We expect that gold demand in India is likely to reach 1,200 tonnes, or approximately Rs2.5 trillion, by 2020, at current price levels.”
Related Links
International Coloured Gemstone Association
The Gemmological Association of Hong Kong
World Gold Council
