Chao News client reporter Gu Zhefei
"It's really the tears of the times. I haven't bought this kind of brand for many years. It was quite popular before." Ms. Li, a white-collar worker in Hangzhou, showed reporters her treasures, large and small crystals There is a whole display of accessories, "This is a limited edition panda model, and there is also the Heart of the Ocean, which was very popular at the time. I even wore this Cinderella crown when I got married. To be honest, I regret it a bit. All the Swarovskis are artificial." Crystals have no value at all now, and no one wants to recycle them. If she had bought a gold tiara when she got married, it would be valuable now." Ms. Li lamented the "failed investment" in her youth.
(The hit of the year became the tears of the times)
Also in an embarrassing situation is the girl’s magic box-Pandora. These popular affordable luxury jewelry brands seem to have fallen out of favor overnight, and the store entrances are crowded. Many netizens lamented on social media - "What a tear of the times." "Are there any idiots still buying them?" "Ugly and expensive." "Might as well buy gold!"
(Pictures from social networks)
Cinderella does not like crystal slippers Light luxury brands The Chinese market is in an embarrassing situation
Light luxury jewelry brands Pandora and Swarovski, the two giants in the Chinese market, were once young girls Their dream machines maintain the image of "high-end jewelry" with their high-end counter experience and endless marketing methods. However, as time develops, Chinese consumers pay more attention to cost performance and product quality itself, and light luxury jewelry gradually loses its reputation. Brand halo.
Recently, Pandora released its first quarter report for fiscal year 2024. In the first three months of this year, Pandora’s revenue achieved an organic growth of 18% year-on-year, reaching 6.834 billion Danish kroner (approximately US$985 million); net profit was 965 million Danish kroner (approximately 985 million U.S. dollars). $139 million). Although it performed well in the global market, its sales in the Chinese market have repeatedly declined. From 2022 to 2023, Pandora's sales in the Chinese market will decline by 47% and 9% respectively. As a result, China has become one of the major regional markets where Pandora will experience a larger decline in 2023. This year’s performance has also shown no improvement. In the first quarter, Pandora’s sales in the Chinese market dropped 17% year-on-year to 110 million Danish kroner (approximately US$15.873 million).
Swarovski’s financial report shows that it is about to get rid of losses, but it is still far from its historical peak, and it avoids talking about the Chinese market.
In the past, the effect of big names was often an important consideration for consumers when choosing products. Brand awareness and luxury can often attract consumers' attention and promote purchase decisions. However, in recent years, with the convenience of information acquisition and changes in the economic environment, more and more consumers have begun to turn to products with higher cost performance, instead of blindly pursuing the big-name effect.
This change is first reflected in consumers' re-evaluation of the value of goods. Consumers are beginning to pay more attention to the actual functions, quality and usage experience of products. The products of Swarovski and Pandora brands are similar in nature. Swarovski jewelry is mostly made of alloy metal, and the main stone inlaid is not a natural gemstone, but is mostly a synthetic imitation. Pandora jewelry is mostly made of 925 silver and is inlaid with the main stone. It is also not natural, and the value of the jewelry itself is not high. Moreover, this type of jewelry is easy to oxidize and lose diamonds, and the wearing effect is average.
(picture from the brand’s official flagship store)
Secondly, consumer psychology is also changing. Cinderella abandoned her glass slipper, and Pandora's box has long been closed. The little girls back then have grown up, and their sparkling appearance alone can no longer attract them, and the appeal of affordable luxury brands to mature women has gradually weakened. More and more consumers pay more attention to value preservation and economic effects. The newly growing young group has more choices, and static designs and old-fashioned marketing methods are no longer favored. They are beginning to pursue a more personalized and unique consumer experience. These psychological changes have also prompted consumers to pay more attention to cost-effectiveness and choose products that can truly reflect their own personality and taste. Spending thousands of dollars on a bunch of 925 silver and artificial crystals is no longer valuable to them.
Cross-border self-rescue, where will the affordable luxury market go?
In order to change the sluggish state of the Chinese market, affordable luxury brands are also actively seeking changes, but it seems that the effect is not good. As early as 2018, Pandora entered the coffee track and settled in prime locations in Nanjing and Beijing respectively, trying to compete with the cross-border stores of high-end luxury jewelry brands such as Tiffany and Cartier. However, the brand effect is not as good as that of high-end luxury jewelry brands. The taste was not as good as professional coffee brands, and it eventually left the market sadly.
In comparison, Swarovski's situation is slightly better. After Giovanna Engelbert, the global creative director, took office in 2022, the style changed drastically. The cool and noble swan took on the dopamine style and was upgraded to a brightly colored new vision. Although there were many complaints that the new style seemed cheap, it did gain the brand a new wave of attention and traffic. At the same time, Swarovski has also begun to streamline its global retail network and cut off unprofitable dealer stores. This series of measures has allowed revenue to begin to rebound, but it is still difficult to return to its peak. And after the dopamine trend fades, how will the colorful little swans retain consumers?
Nowadays, these two brands have turned their attention to cultured diamonds. Pandora’s cultured diamonds are mostly sold in the United States, Canada, the United Kingdom, Australia, Mexico and Brazil, with prices above US$300, with North America accounting for the largest proportion of revenue. It is also the product with the greatest growth momentum. Although cultured diamond products have not yet entered the Chinese market on a large scale, it is not difficult to see that brands have high hopes for this.
Swarovski announced in April this year that it will launch the cultured diamond Galaxy series in China. Domestic consumers can already buy it on the official mini program and stores, with prices ranging from a few thousand to tens of thousands.
However, in the international market, the wholesale price of cultivated diamonds has dropped sharply. It is rumored that diamond giant De Beers is planning to lower the price of its cultivated diamond brand Lightbox. The most affordable price is only US$600 per carat. Many people in the industry believe that cultivated diamonds Prices have still not bottomed out. Similarly, in the domestic market, diamond consumption is sluggish. The prices of both natural diamonds and cultured diamonds are falling. Consumers' interest in diamond products has gradually turned to gold jewelry that is more valuable, and the market has been further compressed.
For pragmatic Chinese consumers, either real gold and real diamonds are enough to maintain their value, or the brand effect is enough to cover the bleeding in the wallet. The positioning of light luxury products is vague, and it is difficult for them to pay willingly. We will have to wait and see whether Pandora and Swarovski, the affordable luxury sisters, can make a comeback in the Chinese market with cultured diamonds.
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