PGI Expects Demand for Precious Jewellery Will Continue to Recover in the Next 12 Months
(April 2021, Hong Kong) – Following a challenging year for luxury marketers in 2020, the latest consumer survey commissioned by Platinum Guild International (PGI) during the first quarter of 2021 predicts there will be positive sentiment for the jewellery industry, with a strong indication of robust demand for precious jewellery in three of platinum’s major markets during the coming 12 months.
The survey interviewed over 2,000 jewellery buyers and wearers aged from 18 to 65 from PGI’s four key markets – China, India, Japan and the US, who have bought and expect to buy precious jewellery. PGI identified three key predictions for the platinum jewellery industry in 2021, including greater confidence for spending, a stronger appetite for precious jewellery, and increasing market demand driven by non-bridal jewellery.
“Despite the global pandemic that has changed our daily lives, precious jewellery remains a vital part of marking special events and milestones and showing appreciation for loved ones. Overall consumer sentiment has improved across major markets and most consumers have a positive feeling about their country’s economic future as well as their personal finances,” says Huw Daniel, Chief Executive Officer of PGI.
Economic recovery creates confidence amongst consumers to spend
This strong sense of confidence in key markets comes despite volatile market conditions caused by the COVID-19 pandemic. Most consumers expect economic conditions to improve, particularly in China, where four out of five respondents have a positive view of current conditions in Q1 and expect conditions to improve further in the coming three months.
Respondents in the US were also more positive about their country's future economic status compared to the previous quarter. In the US, 33% have a positive view of current conditions and 53% expect conditions to improve in the next three months.
The perception of consumers’ financial situation is generally in line with the overall perception of their country’s economy, with Chinese consumers showing the most optimism about their future personal financial situation.
Stronger appetite for precious jewellery in Q1 2021
Overall consumer sentiment has improved since the last survey conducted in late 2020, and there is a greater willingness to spend on precious jewellery in China, India and the US in Q1 2021 compared to the previous quarter. Precious jewellery shows the second-largest growth amongst the 21 discretionary spending categories in China, surpassing dining and travelling which have been suppressed by the pandemic. This can be attributed to consumers’ growing desire to commemorate meaningful moments in unusual and trying times.
Non-bridal jewellery is driving the market demand
The purchase of non-bridal jewellery remains strong for China, India and the US, with more than half of respondents having purchased such items in the past year. According to the survey, the average expenditure on non-bridal jewellery in China marked the largest growth, with an increase of 39% for buying for self and 23% for gifting for others compared to the same quarter of the previous year.
Within the non-bridal category, self-purchase is driven by women aged 18-45 while gifting is driven by men aged 31-45. Purchase incidence rates have risen significantly in China and India, with 75% of interviewees indicating that they will buy non-bridal jewellery for themselves in China in the next 12 months, followed by 79% in India, and 65% in the US. Jewellery retailers and manufacturers can expand this consumer segment by reaching those who wish to celebrate special moments.
Jewellery retailers should expect continued sales growth as consumers increasingly return to stores in many markets. Retailers may leverage these findings to create seasonal collections that speak to consumer segments within each market.
“Platinum already enjoys a high degree of preference in Japan and China and has been growing in India and the US. We believe that consumers choose to buy platinum jewellery not only because it holds superior qualities, but also because it is usually associated with commemorating life-changing milestones and celebrating important achievements and rare moments,” concludes Zhenzhen Liu, Director, Global Corporate Marketing of PGI.