tinum jewellery retail sales in 2017 fared better than gold jewellery in general, with three of the four core markets posting remarkable growth, according to the 2017 Platinum Jewellery Business Review published by the Platinum Guild International (PGI) in May 2018. Hong Kong Jewellery has recently talked with the association’s chief strategy officer Tim Schlick on the major findings of the report, the pressing issues facing the industry, and the dynamics in Japan, the United States, China and India.
HKJM: Hong Kong Jewellery
TS: Tim Schlick
HKJM: China is the only core market that saw a drop in platinum jewellery sales last year.
TS: Last year was challenging for China. It was mostly because of the overall weight-based pricing dynamics. Around 75 percent of platinum jewellery in China are sold by weight. Most of them are generic products with a simple design. However, consumers have increasingly demanded innovative and sophisticated jewellery that tells a story. We want to change it. Many retailers are trying to move away from weight-based pricing toward branded propositions. And that will take some time. We estimate a three- to eight-percent drop in retail sales in 2018. China remains to be our most important market by far.
HKJM: But platinum is still a preferred metal in China’s bridal segment.
TS: People really resonate platinum as the love metal. This year we want to extend our strong hold of bridal jewellery in China. PGI has recently launched a successful TV commercial in China as part of the bridal campaign. We haven’t tapped the enormous potential of the country in its lower-tier cities. We also want to venture more into love-gifting and anniversary-gifting. Platinum is the gift of love.
HKJM: India did very well in 2017 despite government’s legislative pressure.
TS: India has been growing like crazy. When compared to the 14-pecent growth for gold jewellery, platinum jewellery registered a 21-percent up in sales last year. Our strategy has paid off. When the market was nearly shut down upon the introduction of Goods and Services Tax (GST), we invested heavily in marketing. The growth was mainly driven by two brands, Evara and Platinum Day of Love. Besides couples, the modern-looking platinum is also younger consumers’ preferred choice.
We’re exploring to do more for men’s jewellery which is growing popular in India. In the old days jewellery showed status. Now, jewellery is to speak about your authentic self. We anticipate a 20- to 25-percent growth in retail sales for 2018.
HKJM: Did platinum jewellery benefit from the recovering economy in Japan?
TS: Platinum jewellery benefited more than its gold counterpart last year in Japan from the positive market sentiment. We have a strong position in Japan seeing the world’s highest per capita platinum consumption. Nevertheless, fewer and fewer consumers are getting married due to the aging society in Japan which is the second oldest in the world after Germany. The bridal sector is therefore shrinking. We expect a slight decrease in bridal sales for 2018.
The buying power in Japan is now with the cash-rich women who probably already have platinum jewellery. We need to give them more reasons to buy another piece. This year we’ve launched the Legacy Collection, jewellery that you buy for yourself and pass on to the next generation. For the non-bridal segment in Japan, we look forward to a positive outlook. An overall one- to two-percent increase in retail sales in 2018 is estimated.
HKJM: The US market looks strong in every segment. How can it sustain the momentum?
TS: We had a terrific year with an 11-percent growth, benefited mostly from market dynamics. The Trump administration might be dividing the country, but the trade is very much benefited a lot from the tax cut. The industry has also gained from the low platinum price. Retailers can convince consumers to switch to platinum.
We introduced a self-purchase branded collection in the States a couple of months ago. It is designed and fabricated by PGI’s partnering manufacturers in Japan. The quality and design are incredible. Self-purchase platinum jewellery is an incremental opportunity.
In view of the strong bridal and self-purchase segments in the country, we estimate an eight- to 11-percent retail sales growth this year.
HKJM: How would you encourage more stores to stock platinum jewellery?
TS: The market is still driven by very generic designs sold by weight which brings limited profit margins when compared to karat-gold offerings. Besides fostering the branded jewellery and ‘per-piece’ pricing propositions, we have developed a marketing programme for retailers in a bid to help them maximise marketing for platinum.
Another strategy is to help manufacturers to enhance their alloys. For instance, we’ve sent experts to our manufacturing partners in China to improve the quality of their jewellery.
Platinum jewellery is a differentiator, a strategic asset to perfect the portfolio of an upscale retailer in order to differentiate from others.
HKJM: How do millennials see platinum jewellery?
TS: There is a notion that millennials see luxury differently. Jewellery is not for showing off, nor is it superficial. I agree with that. Millennials are a generation who knows the value of emotional meaning. It is a strong position for platinum because it is the metal of meaning. This will benefit platinum in the long run. (Photo courtesy: PGI)
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