Platinum Guild International (PGI) has released its views on promoting the future of the jewellery market at the second Shanghai Platinum Week.
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According to Pui P. Poon, Managing Director of PGI China, innovation is the answer to overcoming these challenges and tapping into the three areas of growth simultaneously: branding innovation to create perceived value; promotion innovation to make jewellery purchases relevant all year round; and channel innovation to sell where consumers prefer to shop.
Branding innovation to create intangible values
A McKinsey’s industry outlook report predicted a CAGR growth of 8-12 percent for branded fine jewellery, whereas overall fine jewellery is only projected to grow 3-4 percent. As such, the continued development of branded collections is the most obvious opportunity area for growth. Furthermore, in purchasing jewellery, consumers today demand perceived value, including intangible values such as emotional relevance. Branded collections fulfill that need by imbuing jewellery products with the power of emotional connections to consumers.
Promotion innovation to make jewellery relevant all year round
Post-95s population makes up 13 percent of all China’s consumption share, ahead of the global average of 8 percent. Furthermore, the 260 million Gen-Z consumers (post-90s) contribute 50 percent of the luxury market share and will grow at a higher rate compared to other consumers, and therefore are set to become the main consumption driver for the market.
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Channel innovation to sell to where consumers are
As much as physical stores remain the primary sales channel for luxury goods, the usage frequency of online channels is increasing dramatically. Furthermore, new retail formats such as multi-label stores are becoming popular with young consumers. In this context, channel innovation must include expansion to relevant online and offline channels where young consumers prefer to shop.