The demand for demi-fine and contemporary jewelry is growing in China as more young customers invest in fun, fashionable, accessible pieces to express their personalities. Fulfilling a gap in the market between fine jewelry and fast fashion alternatives, this is a gateway for international giants like Swarovski and Pandora.
It has also created an opening for recent arrivals, like British demi-fine jewelry brands Monica Vinader and Missoma. Earlier this year, Monica Vinader established her Chinese subsidiary and took control of her flagship on Tmall, after debuting in the region in 2014 with a bricks-and-mortar store in Hong Kong and introducing e-commerce through a local wholesale partner in 2018.
Vinader launched her eponymous brand in 2008 and was one of the first designers to pioneer accessible demi-fine jewelry by forging the use of 18k vermeil on solid sterling silver, employing recycled materials and a high level of craftsmanship. Using a marketing strategy of influencers and livestreaming, it has found a ready market in China among young affluent consumers looking for quality and a strong aesthetic.
Similarly bridging the gap between fine jewelry and fashion is Missoma, founded by creative director Marisa Hordern. The jewelry maker opened a store on Tmall Global in 2020 and later added social channels on Weibo and WeChat. It has a successful partnership with Beijing-based creator Savi (@savislook) who livestreams on Missoma’s behalf on Tmall and has previously dressed the contestants on the Chinese talent show Sisters Who Make Waves (乘⻛破浪的姐姐). Its jewelry is also stocked by retailers SKP Select, Luxemporium and Lane Crawford. This autumn Missoma hosted a showroom at Shanghai Fashion Week to highlight its iconic products like the snake chains and the Lucy Williams square malachite necklace, as well as new ranges like the hand-painted Enamel and Stone collection.
These British names, along with Pandora and Swarovski, feel very positive about their business in China — so much so that Swarovski debuted a new venture a year ago in Shanghai’s Hong Kong Plaza. An Asian flagship boutique called Instant Wonder, the multi-sensory space transports customers into the vivid crystal world of Swarovski. This is portrayed as a store of the future, interpreting Swarovski’s codes of cut, color and geometry along with its Austrian heritage. It presents a metallic pink “Wonder Room” with rotating displays, custom-designed swan shaped chairs and a silver room equipped with robotic arms, known as “The Lab,” where science meets magic.
Despite the growing demand from young female consumers for demi-fine jewelry, Vanessa Wu, Europe business director of consulting firm Gusto Luxe, warns of strong local competition “with niche brands and large-scale manufacturers operating more locally on Taobao, which with local production gives them a price/cost advantage.”
A bigger headwind that has slowed the progress of these brands is the pandemic.
"The market is challenged,” admits Irving Holmes Wong, senior vice president and general manager in Greater China for Pandora. The Danish brand has invested heavily in China since 2015, opening a total of 18 stores and launching its Tmall presence in 2016. “Our performance for the past quarters in China has been weak, but despite the situation we kept all our employees on the payroll and have not had any redundancies despite closed stores.”
Adding to these worries, data from April to July this year revealed luxury goods expenditure fell by 40 percent. “We have to admit all brands are dealing with a rapid decline in consumer willingness to buy,” Wong adds. However, while stores were shut, Pandora began developing strong e-commerce channels, “establishing new partnerships in local markets and introducing new communications skills."
Martin Byrne, chief commercial officer at Monica Vinader, highlights another dilemma triggered by the pandemic: shipping. Before taking control of its China business, the brand shipped in bulk to its Chinese partner but this was immediately impacted by the first lockdown in 2020 followed by more recent localized lockdowns. “We were able to get product into our warehouse in China, although it took longer, but we had trouble while fulfilling customer orders. Due to the full lockdown in Shanghai, we couldn’t get individual packages to consumers’ addresses and Shanghai is a significant geographical customer base for us [and so] that did hit us.”
A smaller but manageable inconvenience was getting collections physically to the studios of livestreamers or moving jewelry around for red carpet events. “None of the issues were terminal and we did pivot during that period to working with some expat Chinese influencers,” says Byrne.
Missoma also stresses the importance of flexibility: “I think our customer understands the difficult situation,” says Marisa Hordern. “We really put our all into channel planning, from wholesale to direct-to-consumer, online to offline. We may face obstacles across multiple markets or channels, but our approach is the same; it’s about being agile and reactive to any challenge.”
Keeping a close eye on the situation, Pandora directed its regional team to remotely engage with local consumers during constrained periods and invite them to its stores when the situation eases. “During the most challenging period from April to June, when our warehouse was in lockdown, we swiftly enhanced our systems to enable a new function for shipping online orders from stores as a mitigation measure for the online business,” says Wong. “Experiencing a challenging business environment can demonstrate an organization’s capabilities and resilience.”
Pandora and the other brands are ambitious and see China as one of the markets with significant growth opportunities in the future. The 40-percent drop in luxury goods expenditure cited by Pandora could be used to its advantage, points out Wu. “Limited disposable incomes will drive [consumers] to consider demi-fine options, especially if the brand’s DNA speaks to their lifestyle and mindset.”
Meanwhile, earlier in December, Swarovski’s chief executive Alexis Nasard stated the brand’s sales grew by 10 percent this year in almost every market with the exception of China. Given that China is the brand’s second-largest market after the U.S., it remains to be seen how Beijing's relaxed restrictions will impact sales in the nation for the coming year.
What’s clear is that as consumers become more conscious of their spending, demi-fine jewelry offering higher value for money is here to stay. “Even with the uncertainty of occasions in real life, it’s a wise investment for the younger generation to buy some accessible statement jewelry pieces for their Zoom meetings,” explains Gusto Luxe's Wu. “[This is] one of the reasons why demi-fine jewelry brands like Missoma grew during the pandemic in the western market.”