China’s jewelry gold demand has hit the lowest quarter in five years this year according to a recent report from the World Gold Council. This trend happened while other luxuries such as diamond jewelry gained purchases. The preferences and changing taste among younger buyers are the main reason according to analyses from leading experts.
The so-called millennials, generation reaching adulthood after the year 2000 and now entering its 30s are, for example, shifting the interest from 24k gold tradition. Chinese millennials are now buying lower karat gold such as 18k according to a survey by the market development organization. The survey showed in addition that 39% of the demand for 18k gold in 2015-2016 came from millennials, while the age group 51-65 purchased only 7%.
This decrease in gold purchases in the world’s largest consumer market, China will see erosion in the volume of jewelry demand according to World Gold Council. However, analyst Thomson Reuters shares that it is not the largest threat to the market as the changing of taste in luxury goods can harm the gold market much more. In a 2016 report about China’s jewelry market, diamond and platinum were already announced as strong competitors and reasons to buy other goods than gold. Roland Wang, managing director continues by sharing that 70% of the surveyed owned gold and that millennials crave exclusive indulgences.
In contrast to gold decrease, the demand for extremely rare colored gemstones increased agrees Chaoqui He in “quite a noticeable change happening in China”.
Also contributing to the decline of China’s gold demand is the growing preference for designer items, smartphones and luxury fashion shares consultancy research and markets in the report Global Gems and Jewelry Market 2017-2021. Additionally, Financial Times reported that the definition of luxury is expanding beyond physical possessions to experiences, such as a trip to the Maldives or a visit to the plastic surgeon.
Rounding up, the top three priorities of wealthy Asian millennials are 1. Health 2. Travel 3. Spending time with family by Agility Research & Strategy research.