The main business of the project is retail chain sales of jewelry, with the main products including plain gold jewelry and inlaid jewelry. According to the National Bureau of Statistics of the People's Republic of China "National Economic Industry Classification" (GB/T4754-2017), the project is located in the industry of "5245 Jewelry retailing" under the item of "F52 Retail".
1, policy analysis
The project is mainly engaged in jewelry retail chain sales business, jewelry retail industry is a high degree of marketization of the industry, the government departments and industry associations only on the industry to implement macro-management, business management and production and operation of enterprises in accordance with the market-oriented approach. With the improvement of the national economic level and urbanization process, China's residents will further enhance the ability to consume. The major laws, regulations and policies of the industry all provide strong support for the development of the industry. For example, the 2018 Announcement on the Reduction of Import Tariffs on Consumer Goods for Daily Use states that the tax rate on imported consumer goods for daily use will be reduced, and there are 18 tariff items in the jewelry and jewelry category involved in the reduction of import tariffs, and the average reduction in import tariffs will reach 67.75%. Jewelry category customs clearance costs significantly reduced. 2020 "Government Work Report" pointed out that the implementation of the strategy of expanding domestic demand, and promote economic development to accelerate the transformation of the mode of economic development: to promote the rebound in consumption. By stabilizing employment and promoting income to protect people's livelihoods, improve the willingness and ability of residents to consume. Support for catering, shopping malls, culture, tourism, housekeeping and other life service industries to resume development, and promote the integration of online and offline.
2, market analysis
(1) the development of the gold jewelry market
China since the establishment of the Shanghai Gold Exchange in 2002, and gradually established a set of Shanghai Gold Exchange as a platform for spot trading, the Shanghai Futures Exchange as a platform for futures trading, as well as commercial banks and jewelry stores as the main body of the retail business of the integrated system of the gold market. From the perspective of product structure, gold jewelry is the largest consumption of jewelry products in China, and China's gold jewelry consumption accounted for 58% in 2018.
According to the statistics of China Gold Association, China's gold consumption exceeded 1,000 tons for the first time in 2013.In 2017, China's actual consumption of gold was 1,089.07 tons, an increase of 9.41% compared with the same period in 2016, of which 696.50 tons of gold jewelry, an increase of 10.35% year on year.In 2018, the country's actual consumption of gold reached 1, 151.43 tons, maintaining the first place in the world for six consecutive years, with an increase of 5.73% compared with the same period in 2017, of which 736.29 tons of gold jewelry, an increase of 5.71% year-on-year.In 2019, affected by the downward pressure on the economy as well as the climbing gold price, the actual national gold consumption reached 1,002.78 tons, a decrease of 12.91% compared with 2018, of which gold jewelry 676.23 tons, a year-on-year decline of 8.16%.
As the design and craftsmanship of gold jewelry continue to push forward, the product style of gold jewelry is no longer limited to the traditional dignified atmosphere, both classical and modern temperament of gold jewelry has been favored by more and more Chinese consumers.
(2) diamond inlay jewelry market development
With the development of China's economy, young consumers gradually grasp the right to consume, diamond inlay jewelry has become one of their favorite jewelry categories. 2017 China's diamond inlay jewelry market size of more than 66 billion yuan. Since 2009, China has been the world's second largest diamond consumer market.
According to the statistics of Shanghai Diamond Exchange, in 2016, the cumulative diamond trading volume of Shanghai Diamond Exchange was 309,224,400 carats, and the cumulative diamond trading value was 4.45 billion U.S. dollars, a year-on-year increase of 7.38% compared with the same period of the previous year.In 2017, the cumulative diamond trading volume of Shanghai Diamond Exchange was 492,587,700 carats, a year-on-year increase of 59.30%, and the cumulative diamond trading volume was US$5.344 billion, an increase of 19.96% year-on-year from the previous year.In 2018, the cumulative total trading volume of the Shanghai Diamond Exchange was US$5.784 billion, an increase of 8.23% year-on-year from the previous year.
3. Competitive Enterprise Analysis
Currently, the consumer demand for jewelry is developing in the direction of personalization and diversification. Jewelry companies through the depth of mining specific groups of consumer preferences, trying to form a competitive advantage in a particular segment. China's jewelry industry has presented a differentiated competitive situation. The same type of enterprise has a strong competitive, different types of enterprises between the complementary than competitive.
Due to the different positioning of the target consumer groups of the products, global jewelry retailers can be divided into internationally renowned brands, national brands and regional brands. At present, the domestic high-end market is mainly monopolized by international jewelry giants such as Tiffany, Cartier and Bulgari. National brands in the mid-range market, which occupy a major share of the market, are mainly traditional Hong Kong-funded brands represented by Chow Tai Fook and Chow Sang Sang, etc. and national brands from the Mainland represented by Laofengxiang, Mingpai Jewelry, Chaohongji and Chow Tai Sang. In addition, regional brands such as Beijing's Cai Bai Jewelry and Zhejiang's Mangalong have become strong brands in the regional market by virtue of their channel advantages and brand precipitation in specific regions, and have been able to expand rapidly and radiate to neighboring regions on this basis.
4, risk analysis
(1) the risk of declining market demand
Jewelry as optional consumption, its market demand, economic outlook and consumer preferences are particularly sensitive. According to the statistics of China Jewelry and Jade Jewelry Industry Association, the scale of China's jewelry and jade jewelry industry grew from RMB220 billion in 2009 to nearly RMB700 billion in 2018, becoming one of the countries with the most significant growth in the global jewelry and jade jewelry industry. However, due to the decline in China's overall economic growth rate in recent years, the growth rate of jewelry and jade jewelry consumption has also slowed down. If the economic growth rate continues to decline in the future, the growth in market consumption demand may slow down accordingly, which will adversely affect the project's operating conditions.
(2) the risk of increased market competition
In recent years, China's jewelry market has continued to develop, and the current consumer demand for jewelry has been developed in the direction of personalization and diversification. Currently, China's jewelry industry has presented a differentiated competitive situation, the industry's outstanding enterprises through the depth of mining specific groups of consumer preferences, in a segment to form a competitive advantage.
Market competition has gradually shifted from price competition to the comprehensive competition of brand, business model, marketing channels, product design and quality, and the competition tends to be fierce. In the future development, if the project can not continue to play its own advantages, there will be a risk of decline in profitability due to the intensification of competition in the industry.
The information in this excerpt is from "2021 Investment Feasibility Study Report on Jewelry Retail Chain Sales Project" published by S&P Huatai