64 / 90
61
THERE IS STRONG POTENTIAL FOR FURTHER GROWTH
Fine jewellery is the object or experience most desired
by urban women in China. Asked to select from a
list of competitive items or experiences they most
coveted, almost half (48 per cent) of Chinese women
selected fine jewellery, a much higher percentage
than the next most desirable gift item – designer
handbags, chosen by just under a third of Chinese
women. Among types of jewellery, diamond jewellery
was by far the most popular choice, with about two-
thirds of female consumers selecting it as their first
or second preference (see Fig. 42).
Even so, China remains underpenetrated: while
diamond jewellery ownership has risen to 20 per cent
in the top urban cities surveyed (up from just 10 per
cent in 2003), it is still far below the US ownership
rate of approximately 70 per cent.
The consumer base is likely to continue to widen as
the portion of the Chinese population able to buy into
the category expands further. McKinsey & Company
predicts that, by 2020, ‘mainstream’ consumers –
relatively well-to-do households with annual disposable
income of between US$16,000 and US$34,000 – will
make up 51 per cent of urban households (from
six per cent in 2010), and affluent households with
annual incomes of more than US$34,000 will make up
six per cent (from two per cent in 2010 – see Fig. 43)
39
.
In addition, consumers who have already bought
diamond jewellery are expected to find additional
occasions to buy diamonds.
The number of wealthy individuals has also grown
strongly in China. In its 2013 Wealth Report, Credit
Suisse estimates the number of Chinese millionaires
(ie individuals with assets above US$1 million) to be
1.1 million in 2013, up 90,000 in one year alone
40
.
According to global consultancy Capgemini, China
has the fourth-largest number of high net-worth
individuals (HNWI, those with investable assets
of over US$1 million), reaching 643,000 in 2012,
up just under 16 per cent on 2011
41
. A 2014 study
by consultancy WealthInsight shows that together,
Beijing (sixth in the list of the top 10 cities with most
millionaires) and Shanghai (ninth on the list) have
more USD millionaires (excluding the value of their
primary residences) than London
42
.
This potential for growth is recognised by the big
Chinese jewellery chains. Their store network
expansion has continued apace over the past three
years, leading to an estimated total of, approximately,
15,500 stores offering diamond jewellery in 2013 – 29
per cent more than in 2010. Chow Tai Fook, a leading
specialised jewellery chain, has disclosed its aims to
open a net of 200 jewellery points of sale each year
in the medium to long term (see Fig. 44)
43
. This is a
further indication of local retailers’ confidence in the
prospects for diamond jewellery in China.
FIG. 42:
CHINESE WOMEN'S DESIRE FOR DIAMONDS
AND COMPETING ITEMS
Source: De Beers
A genuine
luxury
watch
25
27
A holiday
abroad
31
30
A genuine
designer
handbag
31
31
A desktop
PC, laptop,
netbook,
tablet PC
36
17
A piece
of fine
jewellery
48
48
DIAMOND
Self purchase
Gift
ALL OTHER
Per cent selected as first choice, 2012
-4
20
27
1
FIG. 43:
SHARE OF URBAN HOUSEHOLDS BY
ANNUAL HOUSEHOLD INCOME
i
Source: De Beers
7
36
51
6
2020
100
2010
2
100
10
6
2000
100
82
1
0
63
36
Poor (<US$6,000)
Mainstream (US$16,000–34,000)
Value (US$6,000–15,999)
Affluent (>US$34,000)
Projected CAGR
2000–2020
Per cent
i
In real 2010 dollars; in 2010, US$1 = RMB 6.73
Per cent