Investing in the local market, rejuvenation and digitalization, integrating resources to expand production, jewelry brands that keep pace with the times

 are building their own moats.

In the past six months, a large number of luxury brand executives have "queued" to start their trip to China, and the recovering Chinese luxury market

 has also shown them great consumption potential.

As one of the first CEOs to visit, Bulgari CEO Jean-Christophe Babin witnessed the surging flow of people returning to the streets of Shanghai and s

melled the shift in consumption trends in subtleties. "2021 was a very strong year for the Chinese market, and although the epidemic repeated last ye

ar, the good news is that consumers are starting to delay enjoyment, they don't want to have too much, but something that can bring good emotional 

value."

Since the beginning of the year, luxury brands have taken turns to celebrate a series of creative projects, commemorative events, and offline parties t

o rebuild emotional connections with Chinese consumers. Just last week, Louis Vuitton opened a limited-time pop-up jewelry store at Ningbo Hank

yu Department Store, Chanel launched the "Art of Perfume" limited-time experience space on Dongping Road in Shanghai, and Hermès set up a He

rmès newsstand in Haikou Sky Mountain. The "dense" pop-up stores are just a silhouette, and international brands can hardly hide their enthusiasm 

for opening stores, including many flagship stores and boutique debuts.

Recent Fashion Fairs also provide a glimpse of more sincere conversations between brands and Chinese consumers. Entering the peak exhibition se

ason, Tiffany & Co., Boucheron and others have successively launched fine jewelry exhibitions; Bulgari invites Chinese artists to participate in the 

art exhibition; Cartier brings three jewellery fairs in one go, spanning Hong Kong, Guangzhou and Shanghai. While making a big splash, these bran

ds also share their skills and ingenuity with a wider group of people to achieve cultural resonance with the general public.

"China is Bulgari's most important market, even more important than Italy's home market." Speaking of the rise of luxury consumption in South Ko

rea, Ba Bin said in a recent interview with CBN that in the luxury market, China's potential is much higher than that of South Korea. "Fashion cons

umption in South Korea has always been high, and China is indeed not so high per capita consumption. However, the huge population base determi

nes that China's market weight is incomparable with South Korea, so we have also invested more resources and talents in China. ”

Inject the local market

In the past three years, when outbound travel has been restricted, "shopping therapy" has become an outlet for China's affluent to "fight" the epidem

ic, allowing luxury brands to further focus on local consumers.

Following the success of the 2019 SerpentiForm exhibition in Chengdu, this year the Serpenti Collection celebrates its 75th anniversary with the op

ening of the Bulgari Collection at the Museum of Contemporary Art Shanghai. Snakes are mysterious animals in ancient civilizations and can be fo

und everywhere in ancient Greek and Roman mythology. In Chinese legend, Nuwa and Fuxi respectively held creation tools such as compasses and

 square rulers, and the intertwined snake tails represented their ability to connect the world and the heavenly realm.

Snake-shaped jewelry is often used as an amulet, and the serpent is also a source of inspiration or an iconic totem for several jewelry brands. The fa

me of Bulgari's Serpenti series also starts with Hollywood actress Elizabeth Taylor's "bringing goods". On the set of Cleopatra in 1962, the Oscar ac

tress wore a Bulgari serpentine bracelet to leave a behind-the-scenes shadow, and her role as Cleopatra is famous for wearing a bracelet with a gold 

snake wrapped around it, a symbol of royal power in ancient Egypt.

Similar to the Chengdu exhibition three years ago, as a China branch of the global tour, Bulgari also uses local curation and artistic innovation to ar

ouse a broader resonance beyond the existing community. At different sub-stations, the brand invites artists from all over the world to make forwar

d-looking artistic expressions for the spirit snake totem. "Bulgari must see where the future leads, just as art always inspires us, which in turn inspir

es jewellery artisans to dig further into the brand's historical treasures."

Babin has been at the helm of Bulgari for 10 years and has always been optimistic and inclusive about the sales performance of various market seg

ments. In his view, in the post-epidemic period, it is more important to focus on local customers, and only by establishing stronger ties with local m

arkets can we grasp the opportunity to break the situation. In the online channels that luxury brands focus on, about 2 years ago, Bulgari took the le

ad in opening an official flagship store on JD.com, and entered Tmall half a year later, carrying brand-customized visual content. As soon as the in-

house system went live, Babin was pleasantly surprised to find that while the entry-level model of 2,000 to 5,000 euros was the bestseller, the 20,0

00 euro fine jewelry collection was sold from time to time.

"The new challenge in the luxury industry is always how to respond to emerging needs, there should be a combination behind this, the entry series 

is important, and the layout of the high-end line is equally critical." Last week, Bulgari unveiled its new Mediterranea High Jewellery & Haute Wat

ches collection in Venice, showcasing more than 400 pieces of High Jewellery.

Asia dominates

In the past few years, in addition to the expansion of the brick-and-mortar retail industry, strengthening interaction with local consumers is also a cl

ear trend in the luxury industry.

On social platforms such as Weibo and Xiaohongshu, fine jewelry, which used to be shrouded in mystery, has begun to enter the topic of young peo

ple. Just like "bag buying tips", they search for fashion trends and products, and more and more marketing investment is tilted towards Gen Z. Not 

only jewelry brands such as Cartier, Bulgari and Tiffany decisively adapt to market transformation, but luxury brands' jewelry lines also respond qu

ickly to compete for higher-end market share.

Lefty's recently released Jewelry Market Report for the Digital Age explores the full range of rejuvenation and digital transformation of the jewelry

 market. On the one hand, after the epidemic, fine jewelry accelerated the opening of online sales channels, which further strengthened the presence

 of jewelry brands. The report predicts that online sales of fine jewelry will increase to 21% by 2025. On the other hand, the younger generation has

 become the main force of luxury consumption, and it is expected that by 2030, Generation Z will replace millennials as the core consumer group of

 the luxury market, accounting for eighty percent of the total.

Also appearing at the same time as the Shanghai Art Exhibition was Bulgari's new global spokesperson Liu Yifei. Since 2020, Bulgari has signed sp

okespersons such as "Spider-Man girlfriend" Zendaya Coleman, actor Anne Hathaway, and Lisa, a member of the Korean girl group BLACKPINK,

 to target the young market behind these high-quality idols. "In addition to maintaining the Italian atmosphere, we also try to integrate into the local

 market and connect emotionally."

Where there are young people, they will grasp the business opportunities of the next decade. Babin believes that compared with Europe, the strongh

old of luxury brands, Asia shows great potential for multi-wheel drive, with mature markets such as Japan, South Korea and Singapore, China and I

ndia growing rapidly, and emerging countries such as Thailand and Indonesia on the rise.

"These countries are rising rapidly, and a large number of young people are highly educated, have good resources, and aspire to a better life. They lo

ng to discover the world, sometimes staying in a nice hotel or owning a beautiful ring. For Bulgari, Babbin said, Asia will remain dominant and will

 increasingly incorporate Asian preferences into jewelry creation, such as Chinese favorite jadeite.

Among the three East Asian countries that have attracted the most attention, Japan has taken off the earliest, China is the largest, and South Korea is 

the most "luxurious", and the different market performance reflects different consumer psychology. According to Morgan Stanley, last year, South K

orea spent $16.8 billion on luxury goods, with $325 per capita, ranking first in the world, much higher than the United States' $280 and China's $55.

However, Babin repeatedly stressed the importance of the demographic dividend in the interview, and said that China is the region that enjoys the m

ost resources of Bulgari, "Whether it is spokespersons, events, advertising, etc., we have done more in China than South Korea and more than Italy."

 In terms of volume, these countries are small markets, and the first echelon of jewelry consumption is only China, the United States, and Japan, bec

ause these regions combine important demographic data and have good GDP. ”

Production doubled

The resilience of hard luxury represented by jewelry watches has been further demonstrated during the epidemic. According to Grand View Researc

h, the global jewelry market is close to $270 billion, a figure that is expected to climb at a growth rate of 8.5% to reach $518 billion in 2030.

Jewelry brands that entered the fast lane handed over brilliant report cards one after another. LVMH Group, the parent company of Bulgari, Tiffany 

and Paris Chaumet, saw its watch and jewelry business sales increase by 11% year-on-year to 2.589 billion euros in the first quarter, acquired Italian

 jewelry manufacturer Pedemonte last year, and restarted independent watchmaking brands Daniel Roth and Zunda this year; Richemont, which own

s Cartier, Van Cleef & Arpels and Piaget, saw sales growth of 21% in the jewellery division last year and was the Group's fastest-growing business s

egment, growing across all channels and regions.

Whether in physical stores or online channels, "not enough to sell" restricts the incremental space of jewelry brands. Considering the limited output 

of artisanal skills, several brands have put capacity expansion on the agenda. Last year, the Bulgari Valenza Jewelry Workshop was expanded to a ne

w facility of nearly 17,500 square meters, which is expected to be completed by the end of next year and will be the largest jewelry factory in Europ

e, doubling the capacity of today.

Valenza is Italy's historic goldsmith district where Bulgari built its factory 6 years ago. According to Babin, the new state-of-the-art factory will be a

ble to guarantee the brand's production capacity for the next ten years, and one of the core projects is Bulgari's first training school for external recru

itment. "On the one hand, we are expanding the factory, on the other hand, we are expanding the enrollment program, and we are increasing the prod

uction capacity by increasing the number of jewelry craftsmen, and we expect to add 180 new craftsmen every year. Before the expansion is complet

ed, they will switch from one shift per day to two shifts per day at the current plant. ”

It's not just Bulgari who is ambitious, Cartier is also planning to build a new workshop. In line with the group's strategy, LVMH's acquisition of Pede

monte is aimed at significantly increasing the capacity of the jewelry division, benefiting all its Maisons, including the jewelry line and watch divisio

ns of fashion houses.

Investing in the local market, rejuvenating and digitalizing, integrating resources to expand production, jewelry brands that keep pace with the times 

are building their own moats, gaining unprecedented attention in the mass sector, and some subtle changes are reshaping the industry itself.