Editor’s Note
This article examines the diverging trends in China’s gold market, where soaring prices are fueling investment demand while dampening consumer appetite for jewelry. It highlights a pivotal shift in how gold is perceived and consumed, signaling deeper changes within the industry.
In October, according to the World Gold Council, the international gold price broke through $4,200 per ounce, and domestic jewelry gold prices in China exceeded 1,200 yuan per gram, marking the strongest rally since 1979.
However, in the first half of 2025, in stark contrast to the 23.69% year-on-year increase in sales of investment gold bars and coins, data from the China Gold Association showed that gold jewelry consumption fell by 26% year-on-year.
Amid this wave of “investment boom, consumption chill,” Lao Pu Gold, which positions itself as the “Hermès of the gold industry,” bucked the trend with its sales performance surging 249% year-on-year and net profit growing 291% in the first half of the year, although its gross margin retreated from a high level to 38.1%. This may stem from the inherent tension within the gold industry transitioning from “value preservation and storage” to “brand premium.”
According to the “2025 China Jewelry Listed Companies Research Report” released by the China Gems & Jewelry Trade Association Fund, affected by the continuous rise in gold prices, the revenue of A+H-share listed jewelry companies in China in the first half of 2025 decreased by 8.2% year-on-year, and net profit decreased by 36.84% year-on-year.
Behind this, traditional jewelry brands including Chow Tai Fook and Lao Feng Xiang have seen revenue declines and even batch store closures.
In the second half of the year, the further surge in gold prices directly raised the consumption threshold. A 30-gram gold chain rose from 20,000 yuan in 2024 to over 30,000 yuan in 2025, while data from the National Bureau of Statistics showed that the growth rate of per capita disposable income of residents in the first half of 2025 was only 5.4%.
Precisely because the “scissors gap” between price and income forces consumers to turn to lighter-weight jewelry or directly purchase investment gold bars, it also further dampens the purchasing willingness of ordinary consumers.
As gold prices constantly break cognitive boundaries, traditional valuation models can hardly explain their trends, and market logic has quietly shifted to the realm of “narrative economics.”
Coupled with the decline of the traditional per-gram pricing model, leading brands have turned to “fixed-price” strategies. The proportion of fixed-price products at brands like Chow Tai Fook and Chao Hong Ji has increased. Besides the “fixed-price” model, there is also the much-discussed “Shuibei model.” These differentiated pricing strategies are making consumers re-evaluate the cost-effectiveness of different brands.
It is worth affirming that against the backdrop of rising gold prices this year, fixed-price gold jewelry indeed offers higher cost-effectiveness and has driven a significant increase in sales volume.
However, the probability of price adjustments has also increased accordingly. On October 17, Lao Pu Gold issued a price adjustment notice stating that the company would adjust product prices on October 26. This is reportedly the third price adjustment by Lao Pu Gold this year, with the previous two occurring in February and August.
This is also because Lao Pu Gold’s pricing model differs from the traditional gold store’s “spot gold price + workmanship fee.” It adopts a “fixed price + regular adjustment” strategy, with adjustments typically made two to three times a year.
Ancient craftsmanship, fixed pricing, irregular price hikes… Lao Pu Gold, the Chinese brand dubbed the “Hermès of the gold industry,” is disrupting the gold and jewelry industry with luxury playbook tactics.
Overall, under the “scissors gap” formed by soaring gold prices and slowing growth in residents’ income, consumer purchasing behavior has become more rational and cautious. The traditional per-gram pricing model is waning, replaced by diversified pricing strategies like “fixed price.”
In this industry-wide headwind cycle, Lao Pu Gold has achieved counter-trend growth with its unique “luxury playbook.” However, can this unconventional luxury strategy become its solution to weather the cycle?
It is well known that Lao Pu Gold’s ambitions extend far beyond being a gold jewelry retailer. Judging from a series of strategic moves, it is striving to join the luxury camp.
In terms of product positioning, Lao Pu Gold was one of the earliest brands to promote the concept of “ancient-method gold.” Its products are processed using special traditional Chinese craftsmanship. As the production process is usually time-consuming and entirely handmade, the products command a higher premium over the gold material itself.
This differentiated positioning has successfully freed it from the inherent perception that “gold is just material value,” moving closer to the logic of luxury goods, where brand premium, scarcity, craftsmanship value, and cultural identity collectively form the basis of the product price.
In pricing strategy, Lao Pu Gold resembles a luxury brand more than a traditional gold jewelry retailer. It abandoned the industry-standard “gold price + workmanship fee” model, adopting a Hermès-like “fixed price” mechanism and implementing active price increases 2-3 times a year.
Channel layout is a core part of Lao Pu Gold’s luxury strategy. Data from Brand Data shows that over 80% of its stores are located in high-end shopping malls in first- and second-tier cities, achieving a benchmark of over 30 million yuan in average monthly sales per store in core commercial districts like Beijing SKP and Shanghai IFC.
Notably, the latest financial report shows that the customer overlap between Lao Pu Gold consumers and international luxury brands like LV, Hermès, Cartier, and Bulgari is as high as 77.3%, indicating its customer base is highly similar to that of luxury consumers.
However, this luxury strategy faces severe challenges. The special attributes of gold determine that Lao Pu Gold cannot fully replicate the business model of traditional luxury goods.
On one hand, excessively rapid gold price increases can easily lead to a decline in gold jewelry consumption and a surge in recycling business, adversely affecting brand profitability.
Data from the China Gold Association shows that national gold consumption was 505.2 tons, down 3.54% year-on-year, with gold jewelry consumption plummeting by 26%. However, total consumer spending on gold jewelry remained high at 137 billion yuan. This indicates that gold jewelry consumption is shifting from “weight-focused” to “value-focused,” with the gram weight purchased by consumers declining.
On the other hand, due to the corresponding surge in recycling business, selling gold jewelry in the secondary market has become common, but Lao Pu Gold’s recycling market is not as favorable as that of traditional luxury brands. According to Lanjinger News, several luxury goods recyclers stated that for popular Lao Pu Gold styles with complete certificates, the maximum recovery price is around 70-80% of the official website price, while many products can only be recycled at the spot gold price.
Thus, when gold price fluctuations trigger a value test in the recycling market, its high brand premium is exposed to risk. This clearly reveals that its luxury strategy is a double-edged sword.
Facing these deep-seated industry paradoxes, where is the “future path” for Lao Pu Gold? How will it consolidate its high-end position and explore new growth paths?
First, international expansion is an important direction. Currently, Lao Pu Gold has opened its first overseas store in Singapore, located in the landmark high-end commercial complex Marina Bay Sands, adjacent to global luxury brands like LV, Hermès, and Chanel, marking a significant step in the brand’s internationalization process.
Besides international expansion, Shanghai has also become a key focus. Given Shanghai’s core position in the global luxury market, gaining a foothold in Shanghai can not only prove the competitiveness of a world-class brand but also equip it with the capability to compete in the world luxury market.
It is reported that before 2025, Lao Pu Gold had only 1 store in Shanghai. The Shanghai Plaza 66 store is expected to open soon, after which the number of stores in Shanghai will increase to 4.
Second, product innovation remains a core competency that needs continuous refinement to enhance product value. According to data from the “2025-2030 China Luxury Industry Analysis Report,” in August 2025, the international gold price only increased slightly, while the cumulative price increase by brands reached 14%. This shows that while maintaining pricing independence, gold brands have also constructed a dual-value system of “cultural symbol + financial asset.”
Lao Pu Gold’s unique “micro-carving and chasing” process increases the man-hours per product by 15% and uses blockchain technology to achieve process traceability certification for each item, further strengthening the scarcity attribute of luxury goods.
Third is the integration of online and offline channels. Compared to the traditional offline-focused purchasing model for gold, online sales are gradually becoming popular. Lao Pu Gold’s online platform performance is also impressive. During this year’s 618 shopping festival, Lao Pu Gold’s Tmall flagship store transaction volume exceeded 10 billion yuan, becoming the first gold and jewelry brand to achieve this milestone.
Finally, brand value enhancement is also key. Lao Pu Gold achieved performance breakthroughs through cultural empowerment and brand premium strategies. Its core product series “Filigree Eight Treasures” enhances added value through intangible cultural heritage craftsmanship, with the average transaction price being 3-4 times higher than traditional plain gold products, successfully realizing the luxury transformation of its products.
From entering overseas high-end malls to deepening its presence in Shanghai’s core commercial districts, from developing exclusive craftsmanship to embracing digital sales, these strategic moves collectively point to a clear goal: building a solid barrier centered on cultural value, craftsmanship aesthetics, and brand narrative atop the raw material attributes of gold.
Especially with the international gold price reaching a historic high of over $4,200 per ounce, a significant divergence has emerged between investment demand and consumption demand. Gold has shifted from “value preservation and storage” to a dual-track trend of “financial asset + emotional consumption.” Taking a step forward to grasp this trend is an attempt to break through the current industry困境, and it is also a necessary path towards sustainable premiumization.