When venturing into the APM Monaco store in Soho, New York, one quickly notices that most of the customers are young Chinese. The salesperson even asks Chinese buyers to add the store’s WeChat account after their purchases — a nice touch that these shoppers seem to appreciate. For this silver jewelry brand offering around 40 new styles every month at affordable price points, half its business currently comes from China, and Gen Zers are one of its fastest-growing segments.
Yet that same group of consumers has little interest in gold jewelry. According to a recent report from the World Gold Council, only 12 percent of Gen-Z Chinese between the ages of 18 and 22 are interested in gold jewelry — the lowest percentage among all living generations of Chinese consumers. On top of that, only 31 percent of them agree that wearing gold helps them fit in with their friends, as compared to a global level of 46 percent.
The fall of gold jewelry as a status symbol with Chinese Gen Zers partially explains the rise of brands like APM Monaco, whose value for the young Chinese rests in the constant renewal of stylish designs as well as their products’ excellent finishing — despite a conspicuous lack of luxurious material. It’s also a reflection of how young Chinese consumers’ value system for luxury has moved from “showing money” to “showing talent,” according to the marketing agency Ogilvy. For young Chinese, jewelry is less about the story of the wearer’s status and more about the story of the item itself.
It may be surprising to hear that jewelry represents the highest growth rate of all Chinese luxury consumption categories for last year. This, combined with China’s growing and unparalleled appetite for luxury, begs the question: How can luxury jewelers find a new way to sell jewelry to China’s massive Gen-Z market?
For Gen Z, taste trumps bling
For older generations, luxury jewelry brands were used as “a badge of status” where a few classic products served as universally-recognized status symbols. But the old ideas about status don’t apply to young Chinese consumers, as they want to be perceived as interesting rather than as rich.
Despite their fixed budgets, young consumers’ choices are much wider today, especially since appealing creations carry more weight with Gen Zers than brand names do. “Brand does not matter to me as long as the design is outstanding,” says Melody, a Chinese Gen-Z consumer who has studied in the United States for six years to Jing Daily about her jewelry tastes. “I would rather spend the same amount of money for a necklace from a less well-known brand with extraordinary design and craftsmanship than buying an iconic necklace from Van Cleef because the design feels outdated and will mark me in front of my friends as a person without taste.”
The message to luxury jewelers is straightforward: Chinese millennials and Gen Zers put more value in jewelry as self-expression, and luxury jewelers should adapt to what is currently their biggest spending group by putting out fresher designs. Tiffany’s rise — and Cartier and Van Cleef’s massive fall — with Chinese jewelry consumers reflects just how important style innovation is with this group. Tiffany’s new collection launches adapted to the younger generation’s desire to showcase their tastes, allowing them to connect with the brand. Meanwhile, the other two brands were much slower to launch new collections.
While iconic designs such as Cartier’s LOVE or Van Cleef’s Alhambra offers luxury jewelers brand recognition with consumers, leaning on those designs too much will only result in consumers growing weary of the look, especially Gen-Z consumers who require novel designs at a faster pace than their predecessors.
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Materials take a backseat to craftsmanship
Because young Chinese use jewelry primarily for self-expression instead of status-seeking, materials hold less weight with their buying decisions. “As long as my skin isn’t allergic to the material, it doesn’t really matter,” says Melody matter-of-factly. But Chinese Gen Zers also care less about the material than older generations because they still don’t have the sophistication to understand the difference. “Unlike my parents’ generation who can tell the material by sight and care about the social impact of the material of a piece of jewelry, my friends cannot really tell the difference between different materials, so I don’t really care about the material as long as the product’s finishing looks excellent,” comments Yilin, a 22-year-old Chinese Gen-Z consumer whose mother is a sophisticated jewelry lover and she shops frequently for fashion jewelry from Western niche brands.
Chinese Gen Zers put jewelry’s value into a social context just as older generations do, except they have a different value system where the material isn’t a critical factor. Luxury brands who are interested in this market should consider offering jewelry made from less-expensive materials while still providing the quality craftsmanship the brand is known for.
Jewelry brands can be discovered by KOLs but must build trust themselves
Unlike past generations who first got to know brands in a physical environment like a boutique, Chinese Gen Zers have a multitude of channels where they can discover brands today. Even so, social media and influencer marketing doesn’t necessarily prompt the consumer to immediately make a product purchase. In fact, a Chinese consumer needs to encounter at least 15 touchpoints before they’ll make a purchase — that’s four more than the global average and almost double the amount in the U.S., according to the American consulting firm McKinsey.
KOLs are useful in introducing a brand, but they aren’t the final or most important point for validating a purchase when it comes to luxury jewelry,” says Yilin. “I still value the process of seeing and touching the product, especially for expensive jewelry. I think it’s the only way to tell the craftsmanship. Unless it is a cheap one that I decided to buy only out of curiosity, I don’t really trust KOLs recommendations.”
Word-of-mouth from family and friends, however, plays a more significant role for new jewelers wanting to build relationships with Gen-Z consumers. “When I see my friend sharing her selfie wearing a pair of beautiful earrings, I will ask her what brand it’s from, says Yilin. “I will then look into the brand and trust the brand more because my good friend is wearing it.” For luxury jewelers, building intimacy with these consumers is far more critical than quickly gaining massive exposure — one of many new values that are starting to reshape the luxury jewelry industry in China.