In November 2016 the World Gold Council (WGC) published a report titled China's jewellery market: new perspectives on consumer behaviour, which points out that the taste of Chinese consumers is changing and people in general are looking for life-enriching experiences; therefore, the gold industry should adapt to consumers’ changing behaviour. The report says gold jewellery could satisfy consumers’ needs in terms of “value tradition and connect” and at the same time, brands that could move customers in other aspects such as “reward and asset success” should be developed. Besides, retailers should develop seamless online-offline strategies to target the millennials.
In 2003, to promote 24-karat gold jewellery in mainland China, WGC developed gold jewellery brand Xifu which specialises in gold wedding jewellery. Within a few years since launch it had brought a lot of changes to the gold jewellery industry in the country. In 2017, WGC took a step forward to organise Xifu International Wedding Gold Jewellery Design Contest in cooperation with the People’s Government of Yantian District, Shenzhen and UBM with the aim to unite worldwide jewellery design talents and combine traditional Chinese culture with fashionable wedding jewellery to attract the new generation of consumers. To better understand WGC’s effort in promoting gold jewellery in China, Hong Kong Jewellery interviewed Roland Wang, managing director, China of WGC.
HKJM: Hong Kong Jewellery
RL: Roland Wang
HKJM: How did WGC first come up with the idea of developing Xifu? What were your initial goals?
RL: In 2003, we were in search of a breakthrough in the 24-karat gold jewellery in China. At that time the product design, retail display or shop interior were relatively old-fashioned so we wished to make changes, not only to product design, but also to an entire promotion strategy that includes a renewed presentation and delivery of gold jewellery to customers as well as the whole consumer experience.
Wedding jewellery enjoys an inelastic demand; when people get married, their families would purchase jewellery. In fact, gold jewellery accounts for 20 percent of the jewellery market of China, making it ‘the largest slice of cake’. With these considerations in mind we decided to focus on gold wedding jewellery.
We developed the brand with two goals in mind: first to connect the consumption of gold jewellery and traditional Chinese culture; and second to introduce new perspectives to gold jewellery retail in terms of product display and category.
Since launch, Xifu has strengthened the applications of gold in wedding jewellery in mainland China and made gold jewellery more readily acceptable by consumers with innovative designs. Apart from product display, it is worth mentioning that Xifu has introduced a new type of red to visual merchandising in the retail level. Between 1990s and 2000, red was generally perceived to be out of fashion and most gold jewellery retail shops used white or platinum as the main colour tone in their shops. By adopting red in our campaign, Xifu combines jewels consumption with traditional culture and replaces the previously prevalent white that could not communicate a joyful emotion. Nowadays many gold jewellery retail shops adopt red in their visual communications, which demonstrates traditional Chinese culture on the retail level.
HKJM: How is WGC’s promotion in China different from other markets?
RL: Our promotion consists of unified effort on a global scale and specific campaigns targeting individual regions. Currently in China our main work is to promote the function of investment and risk aversion of gold. With regard to gold jewellery, our focus is to implement structural adjustment to the gold jewellery market by combining the characteristics of the new era and the needs of millennial consumers. To this end, we have established gold jewellery innovation centres in both China and India to lead and discover industry innovations to further develop them. In particular we create a youthful appeal of gold jewellery by utilising the Internet and wireless platforms to target younger consumers. In the United States our key is to promote gold as a type of investment product.
The needs of Chinese consumers are different from that in other places, especially when it comes to 24-karat gold jewellery demands. Besides, the situation in each market would also influence our promotion strategies. For example, in the United States, the jewellery retail sector is very mature so it does not require full assistance from WGC. In China, despite our promotion is carried out through Xifu, our focus is not brand management but instead to increase demand for gold jewellery by creating a trend and a product category.
HKJM: What is the significance of the design competition to WGC’s work in promoting gold?
RL: The competition aims to help gold wedding jewellery appeal to younger consumers and add an international flair to it. We have included numerous marketing initiatives when launching Xifu in 2003. During 2011 and 2012 we felt enough had been done and so we stopped. However we could not settle with the same mentality now. As a matter of fact there is a lot of room for improvement for the brand, whether in product design or the overall presentation and packaging.
Compared to the past, consumers nowadays have a bigger say as well as a greater interest in the making and design direction of products. As we restart the promotion of Xifu this year, we hope to make adjustments to gold jewellery through the competition by introducing fresh concepts and creating storytelling jewellery that could move consumers. Besides, as the winning designs will be entered into production, the contest provides a fresh opportunity for Xifu to inspire gold jewellery trends by introducing new thoughts to consumers through this new partnership.
HKJM: How do you expect the development of Xifu to influence the Chinese gold jewellery market?
RL: We believe that when Xifu gains success in mainland China it could lead to market changes. Using the smartphone market as an example, when iPhone appeared the entire smartphone market quickly expanded. Most market changes are brought about by the new products. We hope Xifu could create similar influences to improve the overall quality of the industry and enhance the attractiveness of gold jewellery to consumers.
HKJM: Apart from managing Xifu, what are WGC’s other promotional efforts in China? What are your outlooks of the gold jewellery market in China?
RL: Our other projects are to work on industry policies and promote gold investment products at the individual and corporate level, including communicating with the government to prevent discriminatory policies against the gold industry. Besides we are also interested in developing gold investment products and gold jewellery sales online.
Currently gold jewellery still has the biggest share of the jewellery market. How to maintain this edge, to attract consumers of the future, to make post-90 consumers appreciate and purchase gold jewellery, such as stepping up promotion of 18-karat gold jewellery will be the focus of WGC.
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