Jily Ji was 24 when she got her first diamond ring, a 2.5-carat solitaire given to her by her parents. In the three years since, the executive assistant from Shanghai has amassed a 15-piece diamond collection, including a ring, pendant earrings and necklaces that she bought for herself.
“We don’t have to passively wait to be gifted a diamond by a man,” the unmarried college graduate said. “Diamond jewelry is a natural way to express ourselves. It’s a far better investment than most fashion items as it won’t only gain value, but can also be passed down through the generations.”
Financially independent, college-educated and born in China after 1980, Ms Ji personifies a key consumer group the world’s diamond industry is counting on for growth. So-called millennials now account for 68 per cent of diamond jewelry sales by value in the world’s most-populous country – worth US$6.76 billion last year, according to research by De Beers SA, the world’s biggest diamond producer.
Millennial women – defined by De Beers as those aged from 18 to 34 – spent about US$26 billion on diamond jewelry in 2015 in the world’s four main markets, acquiring more than any other generation, chief executive officer Bruce Cleaver said in a report in September. These 220 million potential diamond consumers are still a decade away from their most affluent life stage, representing a “significant opportunity” for the industry, Mr Cleaver said.
Tapping them could buoy prices from the gems, which dropped 18 per cent last year, the most since 2008.
Diamonds have caught the eye of Chinese consumers only recently because of their exposure to western lifestyles and marketing, said Ms Ji, a business-English graduate, who counts Harry Winston Inc and Tiffany & Co among her favourite diamond jewelers. Her mother, for example, is more likely to purchase jade or gold jewelry, she said.
For Chinese millennials, diamonds are more of a fashionable mark of achievement instead of a symbol of everlasting love, said Joan Xu, Shanghai-based associate planning director at J Walter Thompson, an advertising agency. The trend is changing how companies such as Chow Tai Fook Jewellery Group Ltd and Shanghai-traded Lao Feng Xiang Co are designing and marketing jewelry in China.
Chow Tai Fook, the market leader in Chinese jewelry with a 5.7 per cent share, bought Boston-based Hearts on Fire Co for US$150 million in 2014, giving it a greater selection of unique, millennial-preferred pieces, including earrings and pendants with multiple small diamonds embedded in precious metals.
“We need to tap into this audience very quickly with designs for millennials that are more practical and fashionable, such as mixing gold with diamond,” Chow Tai Fook executive director Adrian Cheng said in an interview in Hong Kong.
Chow Tai Fook, for whom millennials make up half its clientele, will introduce new lines and products by the end of 2017 and has signed spokespersons including 29-year-old South Korean actor-singer Li Min-ho and rapper G-Dragon, 28, to reach millennial buyers, Mr Cheng said.
That may help the Hong Kong-based retailer, which operates more than 2,000 jewelry and luxury watch outlets, boost sales and profit, which have slumped since mid-2014 as an economic slowdown and crackdown on graft dampened Chinese demand for luxury goods.
Shanghai-based Lao Feng Xiang, which is majority-owned by the Shanghai government with 3,000 stores throughout China and 5.4 per cent of the market, is also working to offer more choice for millennial women, said marketing manager Wang Ensheng.
“This consumer isn’t looking for super expensive jewelry,” Mr Wang said in a telephone interview. “She’s chasing fashion, she changes outfits every day, and wants jewelry to match. What we need to provide for her are pieces that are personalised, unique – but not too expensive, as she’ll possess many, not just one diamond piece.”
The young middle-class are the target for Luk Fook Holdings International Ltd, said its executive director Nancy Wong. Hong-Kong based Luk Fook, which has 1,400 stores in mainland China and a 0.7 per cent market share, will provide manicurists in some of its stores and “handsome” chauffeurs to win over females customers, she said.
Independence is the top trait Chinese millennial women identify with, according to a Female Tribes survey conducted by J Walter Thompson that interviewed 4,300 women across nine countries about a year ago. More than two in five Chinese respondents said financial independence was more important than marriage, and 32 per cent identified success as financial independence.
Pandora A/S, the Denmark-based maker of silver charm bracelets, said it’s intentionally staying away from love-centric marketing. This year, Pandora doubled its number of stores throughout China from 43 to 81.
“You won’t see a couple in our images,” said Isabella Mann, Pandora’s Hong Kong-based vice president of marketing for Asia on the phone. “That has been a premeditated decision. We want our brands to appeal to as many people as possible, and we think it’s dated to show a lovey-dovey couple in a jewelry ad.”
That may be wise. An unfavourable demographic shift leading to fewer weddings has resulted in a “tepid” outlook for Hong Kong-listed jewelry companies, HSBC Global Research analysts Lina Yan, Karen Choi, Erwan Rambourg and Vishal Goel said in an October report. They forecast that wedding rates would fall 1 per cent in each of the next two years because of a decline in the population of millennial women.
Divorce in China has also risen, with more than 3.84 million couples splitting up in 2015, a 5.6 per cent increase from the year before, said China’s Ministry of Civil Affairs in July. The national divorce rate is now 2.8 per 1,000 individuals, up from 0.9 in 2002.
“Companies that are built on the institution of marriage, like diamond companies, will struggle a little bit unless they evolve,” said J Walter Thompson’s Ms Xu. “The idea was that marriage is eternal – like diamonds – but what happens when marriage is not seen as eternal anymore?”
Millennials getting divorced could ultimately be positive for the diamond industry. De Beers’ research from the US found that Americans spend 20 per cent more on the diamond ring bought for their second marriage than their first, said Stephen Lussier, De Beers’ executive vice president for marketing on the phone.
“There’s no reason why second marriages in China should not take the same trend as in the US,” he said. “This gives us an opportunity at a larger market.”Read more at:blue formal dresses | yellow formal dresses