Editor’s Note
As global gold prices climb, major Chinese jewelers have raised retail prices, passing costs to consumers. Interestingly, market visits indicate that price sensitivity between branded and wholesale gold is waning among buyers.
Against the backdrop of persistently rising international gold prices, leading Chinese gold jewelry companies have once again initiated price hikes. Branded gold stores, represented by Chow Tai Fook, have increased the retail prices of gold jewelry, reflecting the pass-through of costs. Meanwhile, a Securities Times reporter’s visit to the Shuibei gold wholesale market in Shenzhen revealed that consumers’ sensitivity to the price gap between Shuibei loose gold and branded gold jewelry has decreased. Coupled with frequent promotional activities by branded stores, many consumers indicated they would consider purchasing branded gold jewelry more often. Chow Tai Fook’s Hong Kong stock rose 3.08% on the day, while its US depositary receipt CJEWY remained flat.
International gold prices have continued to climb in 2025, with spot gold repeatedly approaching $3,000 per ounce. Precious metals like silver have also surged significantly, driving up the raw material costs for domestic gold jewelry substantially. To maintain reasonable gross margins, gold jewelry companies have begun a second round of price increases. Leading companies like Chow Tai Fook recently raised the retail prices of pure gold jewelry, with increases ranging from approximately 10 to 30 yuan per gram, depending on the product’s craftsmanship.
A comparison with the Shuibei market is shown in the table below:
| Channel | Pricing Basis | Premium per Gram (approx.) | Advantages | Recent Changes |
|---|---|---|---|---|
| Branded Stores (e.g., Chow Tai Fook) | Gold Price + Workmanship Fee + Brand Premium | 80-150 yuan | Design, Service, After-sales | Increased promotional activities |
| Shuibei Wholesale/Loose Gold | Gold Price + Low Workmanship Fee | 10-30 yuan | Affordable Price | Relative price gap has narrowed |
While rising gold prices have widened the absolute price gap between the two, the relative premium ratio has shrunk, enhancing the perceived value-for-money of branded gold jewelry.
Visits to the Shuibei market in Shenzhen show that some consumers who originally planned to buy loose gold found that after promotional activities from branded stores—such as “fixed-price” exchange offers, per-gram discounts, and point redemption—the final out-of-pocket price difference was not significant. Additionally, branded gold jewelry holds advantages in style variety, quality assurance, and recycling convenience, leading to a shift in consumer preference.
This change is particularly noticeable among younger consumers and those with gifting needs, indicating that the trend of consumption upgrading persists even in a high gold price environment.
The price hikes are beneficial for short-term gross margin recovery for companies. Chow Tai Fook’s 3.08% rise in Hong Kong shares reflects investor recognition of its sales resilience and pricing power. Branded stores maintain customer traffic through promotions to avoid significant sales declines. Wholesalers in Shuibei face some pressure, with some merchants reporting a slowdown in the growth rate of loose gold sales.
Overall, industry concentration is expected to increase further. Leading companies, leveraging their supply chain advantages and brand power, occupy a more favorable position during this high gold price cycle.
Gold prices are likely to remain high with fluctuations in the medium to long term, making price increases by jewelry companies a norm. Rising consumer acceptance of brand premiums will drive the industry’s transition from “weight is king” to “design + service.” Leaders like Chow Tai Fook and Chow Sang Sang are expected to consolidate their market share through new product iterations and marketing campaigns.
Short-term focus will be on the performance during traditional peak consumption seasons like New Year’s Day and the Chinese New Year. If sales of branded gold jewelry exceed expectations, sector valuations may see further recovery. Investors may pay attention to leading companies with strong distribution channels and design capabilities.
As leading companies like Chow Tai Fook raise prices, consumers are shifting more towards branded gold jewelry due to the narrowing price gap and the appeal of brand promotions. This reflects a rational adjustment in consumer behavior under high gold price conditions. This trend is conducive to increased industry concentration and the strengthening of brand value, while maintaining the overall resilience of gold jewelry consumption. In the future, companies will need to balance pricing strategies with promotional efforts to achieve sustainable growth during this period of rising costs.
