Niche jewellery
The rise and rise of the niche jewellery market
In this market analysis, Jing Daily’s Lisa Nan comments on how China’s Gen Z are shifting from traditional companies to more innovative designs and lesser-known labels in accessories.
China’s jewellery market has been growing at a lightning pace over the past few years. According to CBNData, in 2021 the domestic consumption of accessories had reached more than US$30 billion (RMB199.5 billion), maintaining an annual growth rate of nearly +20%. And it’s Gen Z who are the main drivers of this, accounting for 56% of the consumption.
Yet, despite the growing demand, it’s no guarantee that this will necessarily translate into sales for established brands. Pandora, for one, has seen its fourth-quarter 2021 sales performance dampened by the mainland market, registering there a revenue slip -39% on a two-year stack. And it’s likely that competitors will have similar results. Even bigger local names are struggling: Hong Kong-based hard luxury maker Luk Fook recorded same-store sales drop of -29% in the third quarter. Why? Because young consumers are shifting from these traditional companies to more innovative designs and lesser-known labels. This is where niche accessories brands step in: the likes of Yvmin, Ooak, and Uselessobjects are all topping young consumer wishlists. With prices ranging between US$300 (RMB 2k) and US$500 (RMB3.3k), they are not necessarily cheaper lines either. Like the recent niche fragrance boom — which helped small players like Penhaligon’s, Diptyque, and Byredo quickly assert themselves in the Chinese market — contemporary jewellery is becoming the next category worth exploring for brands, investors, and entrepreneurs alike.
Niche jewellery brand Uselessobjects offers bold and avant-garde designs. Photo: Uselessobjects; Jing Daily
“Today, compared to five to ten years ago, it’s easier to purchase a piece from a luxury or established brand. There are many channels. But young consumers are valuing items that can help them express their own personalities more, rather than a product that everyone may have,” stated Lucia Liu, renowned homegrown stylist, creative director — and, most recently, founder of the jewellery company Uselessobjects. Since the firm’s inception in 2021, her bold and avant-garde bijoux designs have been snapped up by top retailers in the market, namely SKP Beijing, LMDS Shanghai, and SND Chongqing. To be stocked in such luxurious high-end retail destinations is quite something: the fledgling line’s success offers a clear indication of the rise of niche accessories. Indeed, the demand for necklaces, rings, and bracelets is forecast to continue to grow driven by an increase in purchase frequency from shoppers. In the past, the wearing of jewellery was only for special occasions; young shoppers are now matching it with their daily outfits. Personalisation and self-expression are the key elements driving Gen Z’s consumption today, and accessories are considered a bona fide way to showcase their identity. The phrase “niche jewelry” has an impressive 1.2 million UGC instances on the popular lifestyle app Xiaohongshu. As Liu admits, when it comes to niche jewels, there are no preferences for local names over global but a superior standard will boost user stickiness and repeated purchases.
Chinese model Cici Xiang wears pieces from Lucia Liu’s jewelry brand. Photo: Uselessobjects; Jing Daily
“Design and quality are the key aspects that consumers value and they can ensure the sustainable growth of the business,” she said. Alongside this, the fastest way for both indigenous and foreign brands to raise awareness and build a solid reputation is to have an offline presence at prestigious multi-brand stores. “Chinese luxury consumers, in particular the younger demographic, are placing a much higher value on brand experience and services than ever before,” explained Chloé Reuters, founding partner of Gusto Luxe and Gusto Collective, in an interview with Jing Daily’s Hard Luxury Report. Given that, being present offline and allowing consumers to have an IRL (“in real life”) experience is as crucial as offering direct to online consumer channels. Meanwhile, the country’s ongoing pandemic and lockdowns across main cities have severely impacted the business: locked-at-home shoppers are prioritising sweatpants over fashionable accessories. Nevertheless, it would seem the trend is here to stay. After a sales drop in March of -17.9%, the industry has pulled off a +7.6% year-on-year increase. It’s worth noting the potentiality and the ambition of these domestic niche players — the global jewellery market size is projected to reach US$518 billion by 2030. Liu’s Uselessobjects is already working with the likes of London-based retailer Machine-A and is soon to be launched online with Net-a-Porter. As local names expand into the West, can they affirm themselves? Liu sums the challenge up well: “International retailers have seen it all. Only if your product is good enough, original, and the brand image is solid, will you have a chance to succeed abroad.” *Jing Daily is a content partner of The Moodie Davitt Report. Click here for the original article or to subscribe.
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The Moodie Davitt eZine Issue 311 | 30 May 2022
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