Jewellery sales in China could strengthen in the third quarter of the year, driven by seasonal buying occasions and weddings alongside government-led initiatives to spur economic activity.

China has been recording solid growth in sales of gold, silver and jewellery since the start of the year, with first-half results rising 17.5 per cent to RMB168.9 billion (about US$23.19 billion). June sales were up 7.8 per cent. 

Latest data from the National Statistics Bureau of China, however, revealed a 10 per cent decline in July sales to RMB21.8 billion (around US$3 billion) while January to July figures were up 13.6 per cent to RMB190.5 billion (approximately US$26.2 billion).

Total retail sales for July rose 2.5 per cent while January to July figures increased by 3 per cent. 

According to Lawrence Ma, CEO of Lee Heng Diamond Group and founding president of the Diamond Federation of Hong Kong, the downtrend in jewellery sales could be attributed to a more conservative consumer sentiment in China due to economic uncertainties. July is also a traditionally slow month, “even in a good year,” as most people go on holiday. 

“Sentiment has weakened, but we remain hopeful that relaxation of loans, improvements in the real estate and financial sectors, as well as government initiatives could help turn things around,” noted Ma.

Ma is also founder of MaBelle Jewelry, which has quite a number of retail shops in Hong Kong and China. The company specialises in trendy diamond jewellery pieces. 

“Also in 2022, the number of couples getting married was at a record low in the last ten years, but there should be more weddings this year, starting September,” added Ma.

Several seasonal buying activities such as Mid-Autumn Festival in September, Golden Week in October and Singles' Day in November are also expected to lift retail sales in China. 

Data from the World Gold Council’s (WGC) Gold Demand Trends Q2 2023, released in early August, revealed a moderate increase in gold jewellery demand of 3 per cent year on year to 476 tonnes in Q2, buoyed by stronger performance in China as the market recovers from strict Covid lockdowns.

According to the study, China's domestic gold industry expects demand to rebound in August as the usual seasonal factors begin to kick in. 

Holiday-related spending could support gold jewellery demand in the second half of the year alongside growing demand in the bridal jewellery sector. The second half of the year is traditionally the peak season for weddings in China, WGC said.