The price of gold has soared, why did the gold store usher in a cold snap instead? Is it wealth, or has it become a hot potato?
Gold prices have soared, and it stands to reason that the gold market should be booming, but the reality is quite the opposite.
The wave of gold store closures is coming and going, and consumer enthusiasm for gold jewelry is rapidly cooling.
On the one hand, the price of gold is at an all-time high, and on the other hand, the business of gold stores is cold, the sales of jewelry brands are declining, and stores are closing one after another.
This phenomenon makes people have to reflect: why has the "wealth" of the soaring gold price become an unbearable "burden" for gold stores?
The cause of the incident can be traced back to September of this year.
The international gold price broke the all-time record, hitting a high of 580 yuan per gram.
As a safe-haven asset, gold has attracted many investors in the context of increasing global economic uncertainty.
In the face of such a high gold price, there has been a noticeable change in consumer buying behavior.
In the past, gold jewelry not only had a decorative role, but also had a certain investment value.
When the price of gold climbed above 700 yuan per gram, the price of jewelry far exceeded expectations, and consumers began to re-examine their consumption needs, resulting in a significant decline in sales of gold jewelry.
Against the backdrop of this surge in gold prices, jewellery brands are facing serious challenges.
Chow Tai Fook, for example, saw a net drop of 180 stores in mainland China in the first half of this year alone. The once-hot gold jewellery market is now chillingly deserted.
In high-end shopping malls in Hangzhou, Jiaxing and other places, there are more staff than customers in gold stores, and the stores are empty, and the clerks can only wait for sporadic customers to come at the door.
Consumer Song Cheng said that in the past, during May Day or Mother's Day, gold sales were the peak season, but now there are no more crowded scenes.
In stark contrast, more consumers are turning to gold bars and coins, avoiding the high processing fees of jewelry, which are more cost-effective for investors.
Corresponding to the weak sales of gold stores, the habits of young consumers are quietly changing.
According to the 2022 China Gold Jewellery Consumption Industry Consumer Insights Report, Gen Z has gradually become an emerging consumer force in the gold market.
Their consumption propensity is different from that of the previous generation, preferring lightweight, personalized products, such as gold beans, mini gold bars, etc.
This change has created a huge challenge for traditional gold stores.
Younger consumers not only prefer lightweight gold products, but also prefer to buy them through online channels, which undoubtedly further compresses the living space of traditional offline stores.
The cold snap triggered by the soaring gold price not only put pressure on gold shops to survive, but also sounded the alarm for the entire jewelry industry.
Merchants have had to accelerate product innovation and the transformation of sales channels.
For example, brands such as Chow Tai Fook and Chao Hongji have launched co-branded IP products to target the consumer needs of young people.
Whether these strategies can truly turn the tide will remain to be seen.
To sum up, the surge in gold prices did not bring the expected industry boom, but became a "hot potato" for gold stores.
Against the backdrop of high gold prices, merchants need to rethink how to balance profits with consumers' purchasing power in order to remain invincible in the future market.
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