China Investment Consultant’s Analysis of Development Factors in China’s Jewelry and Ornament Industry

　　I. Favorable Factors

　　(1) Increased industry concentration

　　Financial strength and brand influence are crucial to the development of jewelry brands—they serve as the foundation for expanding distribution channels. Since ordinary consumers find it difficult to discern the quality and value of jewelry, most rely on the recognition and trust they have in jewelry brands when making purchases. Therefore, for jewelry companies, the stronger their financial resources and the higher their brand reputation, the more directly they can boost product sales. This, in turn, drives the entire market share further toward well-known brands and continuously increases industry concentration.

　　(2) Market development is gradually being refined.

　　To further standardize China’s jewelry market, the government and industry associations have successively introduced a series of industry standards and regulations. These national standards and industry norms have established a robust institutional framework for China’s jewelry and jewelry accessories market. Today, China has become one of the countries with the most comprehensive jewelry and jewelry accessory standards on the international stage. This development is of great significance for Chinese jewelry enterprises seeking to enter the global market. Meanwhile, industry self-regulatory organizations such as the China Jewelry & Jade Accessories Association and the World Gold Council actively provide guidance and services to enterprises, playing a crucial role in ensuring product quality, conducting quality assessments, and fostering collaboration and exchange—thus driving the market toward a healthy and sustainable development path.

　　(3) The Rise of Custom Jewelry

　　As the quality of life and consumers’ sense of autonomy continue to rise, coupled with the rapid emergence of the post-80s and post-90s consumer groups, consumers are paying increasing attention to the personality and fashion aspects of jewelry and accessories, hoping that jewelry designs can better reflect their emotional aspirations. Driven by this wave of personalized consumption, custom-made jewelry has become a fashionable choice.

　　II. Adverse Factors

　　(1) Significant downward pressure on the macroeconomy

　　The jewelry and jewelry accessories industry—especially the diamond jewelry sector—is a typical high-end consumer goods industry that is significantly influenced by macroeconomic cycles and generally aligns with the cyclical patterns of national economic growth. As China’s economy enters a “new normal,” with slower growth rates and continued downward economic pressure, competition in the jewelry and jewelry accessories industry is intensifying.

　　However, in the realm of jewelry, gold jewelry stands apart. Due to its inherent functions—such as decoration, preservation of value, and collectibility—and given the inverse relationship between gold prices and the U.S. dollar’s movement, gold jewelry exhibits a relatively low alignment with macroeconomic cycles. This also underscores gold’s role as a hedge against risk.

　　(2) Raw material prices fluctuate significantly.

　　Since companies in the jewelry industry need to maintain relatively large inventories throughout various stages, including production and sales, fluctuations in raw material prices have a significant impact on these companies. When the prices of raw materials such as gold and diamonds rise, companies in the industry, which currently hold lower-cost inventories, benefit positively from this trend, boosting their profitability. Conversely, when the prices of these raw materials fall, companies holding higher-cost inventories face negative impacts on their profitability. Thus, fluctuations in raw material prices pose certain operational risks for jewelry enterprises.

　　(3) Rising operating costs are impacting corporate operating profits.

　　Offline channels such as shopping malls are the primary venues for jewelry and accessory sales in China. As China’s urbanization continues to advance, land resources are becoming increasingly scarce, making retail outlets located near core commercial districts in various cities highly coveted by manufacturers. The continuous rise in actual operating costs—such as rental expenses, labor costs, and marketing expenditures—is steadily eroding the profit margins of jewelry and accessory companies.

　　(4) Single financing channel

　　Conducting business in the jewelry and jade jewelry industry requires substantial initial capital investment, and the larger the scale of a company, the greater its need for such initial funding. Currently, only a handful of well-known domestic enterprises can raise capital through the capital markets; most other companies are essentially limited to indirect financing methods such as bank loans to meet their business development needs, resulting in a narrow range of financing channels.

　　CIC Consulting’s Forecast of Sales Revenue for China’s Jewelry and Related Goods Manufacturing Industry from 2017 to 2021

　　From 2011 to 2014, the jewelry and related goods manufacturing industry in China maintained a sales revenue growth rate consistently above 15%. In 2014, sales revenue reached 390 billion yuan, representing a year-on-year increase of 16.16%. From January to September 2015, sales revenue totaled 270 billion yuan, with a year-on-year growth rate of only 2.82%. According to projections by the Industry Research Center of Zhongtu Consultant, China’s jewelry and related goods manufacturing industry sales revenue will reach 440.8 billion yuan in 2017. Over the next five years (2017–2021), the industry is expected to achieve an average annual compound growth rate of approximately 6.18%, bringing China’s jewelry and related goods manufacturing sales revenue to 560.3 billion yuan by 2021.

CIC Consulting’s forecast for the total profit of China’s jewelry and related goods manufacturing industry from 2017 to 2021.

　　In 2014, the total profit of China’s jewelry, jewelry accessories, and related products manufacturing industry reached 12.5 billion yuan, representing a year-on-year increase of 41.25%. From January to September 2015, the total profit amounted to 6.3 billion yuan, marking a year-on-year decline of 10.51%. We forecast that in 2017, the total profit of China’s jewelry, jewelry accessories, and related products manufacturing industry will reach 10.25 billion yuan. Over the next five years (2017–2021), the industry’s average annual compound growth rate is expected to be around 3.70%, and by 2021, the total profit of China’s jewelry, jewelry accessories, and related products manufacturing industry will reach 11.85 billion yuan.