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Competition, costs to erode rapid jewelry sector growth
By Louise Ho |
February 27, 2012, Monday
|
Online Edition
Online Edition
THE jewelry market in China will continue to experience rapid growth of 35 percent over the next five years – but industry competition will become more intense, according to an industry report today.
The industry also faces pressure from increasing operating costs in China, a report by business research and consulting firm Frost & Sullivan revealed.
For example, rent of jewelry retailers has increased 30 percent on average last year, said data by China Chain Store & Franchise Association.
Jewelry companies will be cautious to expand if the operating costs continue to rise in the next few years, said the report.
As the market in China's first- and second-tier cities have become saturated, Frost & Sullivan said the industry would scramble for a slice of the third- and fourth-tier city markets.
"Small retail stores may be eliminated by large chain stores in the low-tier cities," said the report.
More jewelry retailers will develop Internet marketing to diversify sales, said Frost & Sullivan.
Large chain stores, such as Hong Kong-based Chow Sang Sang, have opened online stores last year on Taobao Mall, Asia's largest Business to Customer website.
Data by the National Bureau of Statistics shows total retail of gold and jewelry companies in China reached 183.7 billion yuan (US$29 billion) in 2011, a rise of 42.1 percent year on year.
The Chinese mainland jewelry market was worth almost 240 billion yuan in 2010, according to Frost & Sullivan.
Individual average jewelry spending in China is close to US$26, only one-tenth of the US and half of the world's average, said the report.
"Jewelry spending by Chinese consumers has a big room for growth," the research company said.
The industry also faces pressure from increasing operating costs in China, a report by business research and consulting firm Frost & Sullivan revealed.
For example, rent of jewelry retailers has increased 30 percent on average last year, said data by China Chain Store & Franchise Association.
Jewelry companies will be cautious to expand if the operating costs continue to rise in the next few years, said the report.
As the market in China's first- and second-tier cities have become saturated, Frost & Sullivan said the industry would scramble for a slice of the third- and fourth-tier city markets.
"Small retail stores may be eliminated by large chain stores in the low-tier cities," said the report.
More jewelry retailers will develop Internet marketing to diversify sales, said Frost & Sullivan.
Large chain stores, such as Hong Kong-based Chow Sang Sang, have opened online stores last year on Taobao Mall, Asia's largest Business to Customer website.
Data by the National Bureau of Statistics shows total retail of gold and jewelry companies in China reached 183.7 billion yuan (US$29 billion) in 2011, a rise of 42.1 percent year on year.
The Chinese mainland jewelry market was worth almost 240 billion yuan in 2010, according to Frost & Sullivan.
Individual average jewelry spending in China is close to US$26, only one-tenth of the US and half of the world's average, said the report.
"Jewelry spending by Chinese consumers has a big room for growth," the research company said.
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