Shopping malls in China filled with shoppers again as the Lunar New Year approaches, but this year’s rush for gold jewellery looks different. Young buyers are crowding store counters for small, symbolic pieces—mini gold beads, one‑gram ‘lucky beans’ and zodiac charms—while major brands juggle promotional discounts and repeated price hikes, feeding a frenzy that mixes ritual consumption with investment thinking.
The backdrop is a rising bullion market. International spot gold has spent 2025 testing new highs—the World Gold Council recorded more than fifty intrayear record closes—and Chinese retailers are pricing against that tide. With London spot gold near $4,970/oz (roughly ¥1,109 per gram) versus a late‑2025 benchmark near $4,308/oz, manufacturers and retailers face mounting input costs and a renewed debate over whether customers buy ‘gold’ as commodity or ‘gold’ as a branded luxury.
At ground level the story is straightforward: younger shoppers want adornment that carries auspicious meaning and can double as a store of value. Many treat a small, ornate bracelet or pendant as an annual ritual purchase; others increasingly say they are buying gold to hedge against volatility. Retailers are meeting that demand with lighter designs and promotional price cuts on per‑gram tagged products, while still adjusting list prices on higher‑end lines.
But the rising metal price has not been an across‑the‑board bonanza for all jewellers. A comparison of six listed Chinese gold and jewellery firms—Chow Tai Fook, China Gold, Laopu Gold, Chow Sang Sang, Chow Tai Luk Fook and Chao Hong Ji—reveals diverging fortunes. Some firms rely on scale and thousands of franchised outlets to sustain revenue; others have pushed high margin, fixed‑price luxury items that command heavy mark‑ups in stores but whose premium value may evaporate on resale.
Scale breeds sales: Chow Tai Fook led the cohort with RMB 34.7 billion in revenue and over 6,000 outlets, while China Gold generated RMB 31.1 billion. By contrast, Laopu Gold recorded RMB 12.35 billion from just 41 stores—an extreme concentration of per‑store productivity. Net profits tell a similar story of divergence: Laopu and Chow Tai Fook posted roughly comparable net earnings, despite the latter’s vastly larger footprint.
Margins are where strategy shows. Laopu’s one‑price, artisanal positioning produced the highest gross margin (about 38%), versus China Gold’s near‑commodity margin under 5%. Laopu sells pieces whose per‑gram retail math can be double the international gold price, demonstrating that strong brand positioning and curated designs can extract substantial retail premium in the point‑of‑sale environment.
Yet that premium runs into hard realities. Gold jewellery’s raw material often accounts for more than 60% of cost, meaning rising bullion forces brands to either accept margin erosion or raise prices. More probing still, consumers reselling jewellery typically receive offers tied to metal content, not brand cachet. Laopu’s celebrated ‘ancient technique’ narrative is also under strain: its filings show low R&D spend and substantial outsourced production, which weakens the claim of a durable craft moat.
Retail model matters too. Franchising has enabled rapid physical expansion for several groups, but it brings uneven store economics and brand control issues; other firms have pursued direct ownership to protect quality at the expense of growth speed. Chow Tai Fook’s recent net closings and high per‑store revenue suggest a maturing network that may now face saturation, while boutique players risk diluting exclusivity if they expand too fast.
Capital markets have reflected these tensions. Market capitalisations and share performance over the past year rewarded premium and growth narratives unevenly: large incumbents and selective premium players sit near the top of valuations, but some mid‑sized names have significantly outperformed thanks to perceived fashion or strategic advantages. Investors appear to be betting not simply on gold’s price path but on which firms can secure long‑term pricing power.
The wider implication is that jewellery retailers are contesting a paradox: gold is both a commodity and a cultural object. Brands are trying to graft luxury mechanics—high margins, rarity narratives, design desirability—onto a product whose base value tracks an internationally traded metal. That experiment works where brand stories and retail execution create emotional buy‑in, but it is fragile when customers measure resale or swap value primarily by metal content.
Looking ahead, expect more segmentation. Mass retailers will push volume and franchise reach; boutique labels will defend premium lines and curated experiences. Consolidation, creative IP‑led collaborations for festival‑driven products, and greater emphasis on traceability and design authorship could distinguish winners. But the ultimate arbiter will remain pricing power: which companies can sustain margins without losing the price‑sensitive customers who make the Lunar New Year gold rush such a unique phenomenon.
For consumers, the takeaway is practical: small, lightweight purchases satisfy ritual and give a partial hedge against inflation, but buyers should be wary of assuming that a boutique price premium translates into resale value. For investors, the episode underscores that in cyclical commodity markets, brand quality and structural pricing power—not merely scale—determine long‑term returns.