【Ulaanbaatar,】Mongolia Precious Metals Market Trends

Mongolia’s precious metals market possesses unique characteristics combining traditional designs with modern trends and maintains a steady growth trajectory. Over the past five years, precious metals imports have shown a consistent upward trend, with a particularly sharp surge of 259% year-on-year in 2021, following the COVID-19 pandemic. This change is analyzed to be the result of a combination of factors including the recovery of consumer sentiment post-pandemic, increased demand for luxury consumer goods, and economic recovery. While there is no official data clearly presenting the ratio of locally produced to imported products in Mongolia’s precious metals market, it is generally understood that most precious metals companies operate their businesses focusing on import and distribution. Mongolia’s precious metals market shows a structure heavily reliant on imports due to weak production infrastructure and technological capabilities. Most local precious metals firms are primarily responsible for design, with actual production often taking place overseas in countries like China, Turkey, and Russia. Some artisans produce handcrafted items reflecting traditional patterns and religious symbols, with designs influenced by Buddhism and Shamanism being particularly prominent. These products hold a certain market share, with a significant consumer base still choosing them to wear with traditional Mongolian attire or as gifts for special occasions and events. Furthermore, traditional silverware, belts, and nomadic lifestyle-related items, infused with traditional designs, are widely used beyond mere practicality, serving as interior decorations for modern consumers, indicating that traditional precious metal products have established themselves as a cultural element.
Consumption patterns for precious metal products vary by age group. Consumers aged 50 and above tend to strongly prefer products utilizing traditional Mongolian patterns. In contrast, younger consumers show a clear preference for designs reflecting global jewelry trends or custom-made products that emphasize individuality.

Looking at the trend in the number of marriages in Mongolia over the past five years, there was a decrease to 14,252 cases in 2020, but it has gradually increased since, reaching 17,408 cases in 2023. As the number of marriages increases, so does the demand for precious metal products, including wedding rings, which are essential purchases for marriage.

Mongolia’s precious metals market continues to show growth, with total imports in 2024 reaching $8.29 million, an 18.2% increase year-on-year. Imports have steadily increased over the past five years, maintaining a sharp growth trend especially since 2021. As of 2024, the largest source of imports was Hong Kong ($4.39 million), which recorded the highest growth rate with a 241.6% increase year-on-year. Italy and Thailand followed as major import sources.

In contrast, imports of South Korean precious metals surged by 441% in 2023, marking significant growth. This is particularly attributed to increased demand for South Korean gold jewelry, with items like gold earrings and rings being popular mainly among middle-aged and older consumers. Additionally, the application of South Korea’s sophisticated designs has made gold jewelry more accessible to younger consumers, seemingly expanding the market. However, in 2024, imports reached $660,000, a mere 0.9% increase year-on-year, indicating a slowdown in growth.
Examining import trends by country, post-COVID-19 in 2021, most countries showed a sharp increase, with total import value rising 257% year-on-year. Subsequently, in 2022-2023, growth rates slowed in some countries, but overall import value maintained a steady upward trend. In 2024, imports from some countries like Hong Kong and the United Arab Emirates exploded, while growth rates for South Korea, Turkey, and Thailand remained relatively stable.

Mongolia’s precious metals market exhibits a complex competitive landscape where the price competitiveness of local brands coexists with the quality and design superiority of foreign brands. Consumers make purchasing decisions by comprehensively considering price, design, and quality, which demands diverse strategic approaches from brands. Local precious metals brands attract consumer interest with reasonable prices and unique designs that blend tradition and modernity. This can be seen as a strategy that simultaneously satisfies Mongolian consumers’ cultural identity and modern sensibilities. However, a significant number of these brands develop designs in-house but outsource production overseas, sometimes facing challenges in quality control. Consequently, some consumers perceive a lack of reliability in quality.
In this context, renowned foreign brands like Swarovski and Pandora maintain steady popularity in the Mongolian market with consistent quality and sophisticated designs. These brands are chosen by consumers based on quality management and brand trustworthiness that meet global standards. Particularly, as demand for high-end products like diamond-set wedding rings increases, the influence of these brands is expanding further.

To operate a precious metals import and distribution business in Mongolia, local companies must obtain an official permit from the Mongolian Financial Regulatory Commission (FRC). This is seen as a regulatory measure to ensure market transparency and prevent illegal distribution. As of 2024, a total of 53 legal entities and 453 individuals were registered with the FRC as precious metals and gemstone traders. Among these, 74% operate in Ulaanbaatar, while the remaining 26% operate in provincial areas.

Mongolia’s tariff rates generally apply a standard duty rate (5%) to most imported goods, excluding items subject to special consumption tax. Precious metal products are also subject to a basic 5% customs duty, with an additional 10% Value Added Tax (VAT).
Meanwhile, Mongolia and Japan concluded an Economic Partnership Agreement (EPA) in June 2016. Under this agreement, HS code 7113 (precious metals and precious metal products) is designated as a duty-free item. Therefore, when exporting precious metals from Japan to Mongolia, the existing 5% duty is exempted, allowing for duty-free import.

Over the past three years, Mongolia’s jewelry market has undergone changes in design trends, showing a shift from traditional, flashy, and eye-catching styles to modern and sophisticated designs. This change is analyzed to be due to Mongolia’s economic growth and consumers’ tastes evolving in line with global trends.
Particularly, the younger consumer demographic is showing a strong tendency to prefer jewelry reflecting the latest trends while being price-sensitive. In the past, large and flashy designs were popular, but recently, more minimal and sophisticated designs are preferred.
The influence of the Korean Wave (Hallyu) also acts as an important factor behind this change. As the Hallyu craze impacts the Mongolian jewelry market, Korean-style modern and clean designs are receiving positive responses from consumers. Therefore, to secure competitiveness in the Mongolian market, product planning incorporating Korean design elements could be effective.
Furthermore, for companies considering entering the Mongolian market, carefully selecting local partners is essential. While the Mongolian jewelry market is still dominated by offline sales through existing distribution channels, the recent growth of the online market is progressing rapidly, making digital marketing strategy an increasingly important factor. Effectively utilizing marketing strategies through SNS and online shopping malls could allow for more effective targeting of Mongolian consumer segments.

Additionally, the ‘Mongolian Jewellery and Metal Forum, Expo’, held annually to foster the development of Mongolia’s jewelry industry and share global trends, is entering its 4th year this year. This expo has established itself as an important platform where various industry stakeholders, including jewelry manufacturers, designers, and distributors, gather to share the latest trends and technologies and build business networks.