RAPAPORT... Polished diamond sales dropped slightly and prices for goods below 6-per-carat weakened accordingly after October’s Golden Week, during which sales were satisfactory for most diamond dealers.
Dealers feel that the best selling seasons are concentrated around the main holidays in China. Since Christmas hasn’t yet been developed into a major diamond-consuming season in China, the market will remain moderate until next January and then pick up for the Chinese New Year, which falls on February 18 in 2007.
“Holiday Economy”In 1999, the Chinese Government extended the October 1 National Day from one to three days and put together four days of two conjunctive weekends to create the first Golden Week. In October 2000, China officially introduced three “Golden Weeks” by extending the National Day, Labor Day and Spring Festival breaks. The policy — referred to as “holiday economics” — was designed to spur the economy by encouraging travel and consumption, a goal at which it has succeeded for the most part.
Since the new policy, people’s concept of holiday has changed and the levels of tourists and holiday consumption have soared. China’s domestic tourism market has become the world’s largest when measured by tourist numbers. And the three Golden Weeks have also become important commercial opportunities for retail business in China, thanks to massive shopper traffic generated by tourism and to the additional leisure time available for shopping.
The Golden Weeks are also a peak time for weddings. According to a wedding service company, approximately 80 percent of wedding service orders are concentrated during the Golden Weeks, which provide more leisure time to arrange “perfect” weddings.
Holiday Diamond Jewelry Sales
It is estimated that diamond jewelry sales realized during the three Golden Weeks and Valentine’s Day account for as much as 50 percent of the annual overall sales volume. In addition to booming demand for wedding diamond jewelry during holidays, an increase in self-purchase and gifting also boosts sales for holiday occasions.
Chinese women have been educated to be equal to men since the socialist revolution more than five decades ago. Women keep their careers after marriage. Modern working women are more conscious of their independence and enjoy a better economic status. Nowadays, a piece of self-purchased diamond jewelry is considered one of the best choices for self-satisfaction.
The trend of gifting during the holidays is also a potential market for diamond business. Gift giving during holidays is an important part of Chinese culture. Gifts are not only sent between friends, family members and lovers, but also by corporations to their clients. Diamonds have emerged on corporate gift lists, along with paintings and antiques, as well as other lower-priced gifts.
Realizing the huge commercial potential in holidays, more marketing campaigns are being undertaken by the retail sector. During this year’s Mid-Autumn Moon Festival in October, a 24-karat gold version of the traditional holiday sweet, the mooncake, was marketed to the high end of the gift market.
A Confident PromotionTemix, a local diamond jewelry brand based in Shanghai, recently launched a “value-added buying-back” marketing campaign. The jeweler promised to accept, after a period of one year, any return of a piece of Temix diamond jewelry containing a certificated diamond of not less than one-half carat, and to refund the purchase price plus 3 percent of premium. Never before has a jeweler tried buying back at a premium.
Similar “buy back” marketing activities were launched by other brands in China, which offered refunds with a 10 to 20 percent discount of the original purchase price. The results were generally positive since most of the returned pieces were exchanged for a bigger or better stone.
Yan Zengrong, vice general manager of Temix, told RDR that the campaign is part of their branding scheme to build a service brand characterized by unique value and a quality guarantee. The internet is making the diamond business more transparent and to survive in this competitive market, Yan said, “we need to consider and protect consumers’ benefits as well as our own sustainable development.”
The media responded positively to the campaign, which promoted confidence in the jeweler with its clear message of guaranteed value for their diamonds. “The market response in Shanghai is quite encouraging. Sales volume in October reached an increase of 99.75 percent over the same month in the previous year, with 31.22 percent of sales volume coming from the ‘value-added buying-back’ promotion,” Yan said. “And we are launching the same promotion in our Beijing outlets.”
The campaign positioned the diamond not only as a symbol of love, but also as a guaranteed value-added investment, as well as a token of good relationships of many kinds — all of which creates plenty of room for the creative marketing of diamonds.
The Marketplace• Demand weakened in November compared with the previous month.
• A slight decline in prices occurred for sizes below 6-per-carat.
Article from the Rapaport Magazine - December 2006. To subscribe click here.