Jewelry was among the less affected categories as China’s luxury market contracted in 2022 for the first time in five years, according to a new report by Bain & Co.

The jewelry segment declined between 10% and 15% last year, as Covid-19 lockdowns beginning in the second quarter stalled sales, Bain said Tuesday. The fashion and lifestyle category contracted 15% to 20%, while the watch market saw the steepest drop, falling 20% to 25%.

The mainland’s luxury sector also suffered from a decline in the real-estate market, a higher rate of unemployment, and weakened consumer sentiment, Bain noted.

Overall, China’s personal luxury sales decreased 10% in 2022. However, Bain expects luxury to rebound before the end of the first quarter of 2023, as the country reopens for business.

“The fundamentals of consumption in China are still intact,” Bain said. “Compared to other emerging markets, China is a behemoth for luxury growth.”

Pricing of certain products within the luxury market needs to be addressed, with many brands not maintaining global pricing strategies since China’s borders closed in 2020, Bain pointed out. Meanwhile, the jewelry and watch sectors matched their prices with the rest of the world’s, and therefore will be less affected.

“Luxury consumption will recover as Covid-19 subsides, mall traffic improves, and consumer sentiment rebounds,” said Weiwei Xing, a partner at Bain. “We expect to see 2021 sales levels sometime between the first and second half of 2023. While optimism abounds, there are also risks. Brands need to resolve pricing gaps between China and Europe before international travel resumes.”