China's 'Hermes of gold' shines despite lacklustre demand for high-end goods

Record ID: 1984932

  • Title: China's 'Hermes of gold' shines despite lacklustre demand for high-end goods
  • Date: 20th March 2025
  • Summary: SHANGHAI, CHINA (MARCH 18, 2025) (REUTERS) JEWELLERY COLLECTOR, VIVIAN WANG, OPENING JEWELLERY CABINET / WANG SAYING: "These are some rings, these are all different types of bracelets." (SOUNDBITE) (MANDARIN) JEWELLERY COLLECTOR, VIVIAN WANG, SAYING: "This is my jewellery cabinet, every layer has a different function." WANG PUTTING ON RINGS WANG SHOWING RINGS ON HANDS WANG
  • Embargoed:
  • Keywords: China Shanghai chinese gold investment jewellery laopu luxury stock market traditional
  • Location: SHANGHAI, CHINA
  • City: SHANGHAI, CHINA
  • Country: China
  • Topics: Asia / Pacific,Commodities Markets,Economic Events
  • Reuters ID: LVA001964218032025RP1
  • Aspect Ratio: 16:9
  • Story Text: Vivian Wang, a sales and marketing professional in Shanghai, believes she’s spent over 1 million yuan ($138,259.04) at homegrown luxury brand Laopu Gold.
    Her prized possessions include a dragon medallion, which cost 100,000 yuan ($13,825.90), and an intricate jewellery box with a dragon and phoenix on the lid that cost 400,000 yuan ($55,303.62).
    “I consider myself a jewellery lover. In the past, I used to choose brands like Tiffany, Cartier, and Bvlgari,” Wang said on Tuesday (March 18), citing rival retail chains owned by LVMH and Richemont.” I went through phases where I was particularly fond of diamonds and gemstones. But when you take a longer-term perspective, you realise that gold holds its value the best.”
    “I don’t know if this shift has something to do with the mask incident (pandemic), but it seems that people are seeking a sense of emotional healing and spiritual connection. Traditional Chinese symbols, like dragons and phoenixes, carry auspicious meanings, making them more than just decorative—they offer a sense of comfort and protection," Wang added.
    Laopu Gold is a notable outlier in China's luxury goods market, which has been hammered by an extended consumer malaise due to concerns over job and wage security and a prolonged property slump.
    The company has come a long way since founder Xu Gaoming, a former fisheries clerk, started his first gold jewellery business in 2009 and established the brand Laopu Gold - which translates to "old store" - in 2016.
    Dubbed the "Hermes of Gold" by Chinese consumers, the company has blended Chinese cultural elements within contemporary designs to emerge as a uniquely homegrown luxury brand. The strategy has been fortified by its use of gold, considered a safe investment by Chinese consumers during periods of instability.
    Laopu Gold did not respond to interview requests from Reuters. But a source with direct knowledge of Laopu's business said its annual sales approached 10 billion yuan ($1.38 billion) in 2024, up from 3.18 billion ($439.6 million) in the previous year.
    As rising gold prices in 2024 pushed investors towards bullion and coins and gold jewellery sales in China fell 24.69% to 532.02 tonnes, Laopu twice raised prices on its designer jewellery and trinkets. It again upped prices by 5-12% last month.
    Laopu has also eschewed the spot price for gold to which other domestic competitors peg their selling rates, charging a premium for design and branding.
    With prices for most of its popular products ranging from 10,000 yuan ($1,382.59) to 50,000 yuan ($6,912.95), Laopu now competes more directly with Western luxury brands such as Tiffany and Cartier.
    Its strategy is also drawn from the playbook of its Western competitors. While gold-focused brands including Chow Tai Fook and Lao Feng Xiang each have store networks in the thousands, Laopu has chosen to keep its retail experience exclusive. It has just 37 stores across greater China, including Hong Kong and Macau, and now plans to enter the international market with an upcoming Singapore store.
    Investors have been paying attention. Since its Hong Kong IPO in June 2024, Laopu's share price has surged ten-fold, from HK$40.50 to HK$725 ($93.30).
    While Chinese brands have chipped away market share from Nike in sportswear and L'Oreal in the beauty sector, they have struggled to threaten global luxury players which charge a premium for storytelling, heritage and design.
    But analysts say Laopu could break through this glass ceiling.
    "If you look at the jewellery market in China—it's enormous… Definitely if Laopu can position them (themselves) well with a high differentiated positioning, they can have a big play,” consumer goods expert Jonathan Yan said.
    (Production: Nicoco Chan)
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