It’s not an easy sell. Although gold jewelry has been a symbol of wealth and good fortune for centuries, it has been shunned over the past ten years by China’s more fashion-conscious consumers, who recall parents buying gold jewelry as an investment or as prestigious but gaudy gifts for older family members.
For romantic gifts or personal splurges, young professional Chinese today gravitate towards less traditional diamonds, platinum and silver, particularly in relatively affluent, Westernized cities like Shanghai, the epicenter of China’s jewelry industry.
To reposition K-gold, or Italian-inspired 18 carat gold, WGC has rolled out ads by Bartle Bogle Hegarty featuring stylish women adorned in gold jewelry who are caught in a personal moment. The campaign presents K-gold as a versatile, trendy accessory that allows fashionable Chinese women to express their complex individuality and emotions.
“Initial consumer testing strengthens our belief that this campaign can achieve a strong emotional attachment with the target audience and at the same time will continue to push K-gold’s brand image towards contemporary, fashionable, approachable, versatile and confident,” said Singapore-based Albert Cheng, WGC’s managing director, Far East. He appointed BBH earlier this year following a pitch against the incumbent, Bates, Beijing.
One execution shows two confident young women whose body language expresses a sisterly bond but their expression and choice of jewelry also suggest competition, supported by the tagline, “We’re sisters. We’re best friends. We’re rivals.” Another shows a woman embracing her boyfriend, beside the line, “To have him. To hold him. To set him free.”
The WGC is particularly anxious to overhaul the image of gold in China, the world’s fourth largest gold producer and fourth largest consumer. China's Gem Association estimates total annual jewelry sales in China have increased from $12 million to $12 billion in the past twenty years. Sales are expected to hit $24.3 billion by 2015. Gold jewelry, meanwhile, accounts for about 70% of the global demand for gold, but Chinese consume only 10% of the world’s gold ornaments and jewelry, according to Xinhua's China Economic Information Service.
China's market has also been deregulated recently, sparking optimism throughout the industry. The government has taken a series of measures to open the gold market and boost demand for gold both for jewelry and investment, such as lowering consumption taxes. Since 2003, China has allowed domestic and foreign companies to operate freely as gold jewelry manufacturers, wholesalers and retailers. While international jewelry marketers like Tiffany & Co., Cartier and Bvlgari have tony stores in Shanghai, the WGC hopes its ad campaign, running through next summer, will have broader appeal.
Chinese have traditionally loved gold, as a way to invest their money and as jewelry, but fashion trends today are influenced by Western and Japanese culture, said Hong Kong-based Kelvin Cheng, managing director, Leo Burnett, which handles pan-Chinese advertising for a major jewelry retailer, Just Gold-Just Diamond.
“Consumption of gold is growing, but it is pitted against more than just platinum and diamonds. When young Chinese start earning income, they buy things to look good, social expectations are so high they are not interested in saving money. That means jewelry overall is competing against items like clothes and watches,” said Mr. Cheng. “To market gold now, it’s important for the industry to keep its image distinctive, fashionable and focused on the attitude of the young people, especially the self-confidence of young women. We have to talk to them in their own voice.”
“The market is no longer about precious metals or rare stones but a matter of design, sales pitches and ideas," said Peter Tan, national director, consumer insight & market intelligence at McCann Erickson, Shanghai.