Platinum jewellery fabrication 3Q up by 13% YoY

A remarkable V-shaped recovery after 

1% YoY growth in Q2 following 56% YoY slump in Q1 

Recently Platinum Guild International released the Platinum Jewellery Business Review (PJBR). Overall PJBR says, China’s GDP continued its steady recovery, owing to a stringent lockdown and tracking system to control Covid-19. Platinum jewellery outperformed other categories, delivering a remarkable 13% YoY growth in fabrication, thanks to pent-up bridal demand, new collection launches, PGI’s Reboot during key festival occasions and favourable platinum/gold metal pricing. 

India’s GDP contracted at a slower pace in Q3 due to the gradual reopening of economic activities. Platinum jewellery sales picked up among strategic partners. High gold prices present an opportunity to convert consumers from gold to platinum, especially for entry price point products. 

The second wave of Covid-19 in Japan peaked in early August, enabling some business recovery during Q3. Platinum jewellery retail sales recovered to ~90% of 2019 level, boosted by bridal and high-end jewellery sales.

The US economy rebounded in Q3, but risks are looming as the new cases of Covid-19 surge again, and a lack of further government stimulus plan caused a slower return of jobs. Platinum jewellery sales in the ‘symbolic meaning’ categories from key partners grew by double digits in Q3.

Focussing on Platinum Jewellery, Metal Imports and the Report says, the total platinum transactions via SGE remained strong, growing at 77% YoY in Q3 2020, leading to a 134% YoY increase to 33.8 tonnes in the first three quarters of 2020. The increase in Q3 mainly came from industrial usage. 

China customs data showed that net platinum import declined by 9% YoY in Q3 2020, however still posted a 21% YoY increase to 64.3 tonnes in the first three quarters. Hong Kong net import volume of platinum, an indication of unofficial imports for jewellery use, increased by 119% YoY to 6.1 tonnes in Q3 2020. 

Platinum fabrication delivered 13% YoY growth in Q3, a remarkable ‘V-shaped’ recovery after 1% YoY growth in Q2 following 56% YoY slump in Q1, resulting in a total decline of 14% YoY in the first three quarters of 2020. 

Plain fabrication volume increased by 13% YoY in Q3, Year-on-year growth for each month accelerated from July to September, reaching the highest level of 19% in September. Almost all manufacturers operated at full capacity.

In addition to large retailers, there was increased demand for platinum from wholesalers, as more small and medium retailers from lower-tier cities started to stock platinum. Influenced by PGI’s Reboot programme, retailers continued to refill the orders from Guangdong, Henan, and Jiangsu after the promotion period. 

The price gap between gold and platinum also stimulated additional demand for platinum jewellery. Some retailers started to recycle old gold products in exchange for new platinum products. Platinum gem-set fabrication also increased by 3% YoY in Q3, the first positive year-on-year growth since Q1 2018. 

Although the overall gem-set category was still under pressure, manufacturers started to receive more orders from retailers for platinum gem-set products. The current price gap against gold and technical improvements around hard platinum alloys was key drivers. 

All major manufacturers showcased technology innovation (new alloys, heat treatment and electroforming) and launched new collection based products at the Shenzhen Jewellery Fair (the largest domestic jewellery fair in China) in September. Retailers saw a healthy demand for platinum jewellery in Q3, and sales of PGI retail partners increased by 5% YoY in Q3.

More retailers started to stock platinum to offset the negative impact of soaring gold price and slower turnover. In addition to leading brands that put more focus on platinum, many smaller retailers from lower-tier cities have also started to enter into the platinum business. A local retailer named Fushengsheng officially opened a platinum-only store in Zhanjiang, a city in Guangdong in late August. 

Many leading retailers launched new platinum collections or new SKUs in current collections, including CTF’s Angel of Peace 2020 collection, Luk Fook men’s platinum collection ’FENG Style’ and woman’s collection ‘Grace’, new designs under a bridal collection ‘Two Persons One World’ by Zbird, and new love-gifting collection ‘Love Story’ with platinum SKUs by GMOND, new SKUs in ‘Platinum, My Style’ by CSK and men’s collection ’Free Power’ by Mingr. 

PGI’s branded ‘Platinum Moment’ 2020 collection enabled CGP retailers (a collective of mid-sized partners) to bring excitement to the market and attract young consumers, currently available at 455 stores. With the increased confidence in platinum, retail partners invested more on marketing and promotion to fully leverage the concept and marketing materials offered by PGI. 

An increasing number of retailers are discovering that platinum can play an important role in their business recovery, and have hence increased their platinum counter space or stock levels gradually. 

After a long hiatus due to the Covid-19 pandemic, Bridal Fair returned to the cities of Shanghai, Guangzhou, Hangzhou and Chengdu in Q3. PGI resumed its participation in order to reach bridal consumers during their wedding preparations and each event delivered double digit growth year-on-year in platinum jewellery sales. 

Q3 was a key period for PGI’s Reboot programme in 2020, taking place in Jiangsu, Shandong and Anhui. Results from the participating stores show double-digit growth in platinum jewellery sales month-on-month. The report also focussed comparatively on Gold and Diamond Jewellery too. 




 







 

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