(PLO)- The gold jewelry market in Vietnam is considered to have great potential when the quality of life is increasingly improved.
In a study by Vietnam Direct, in Vietnam, there are about 10,000 stores dealing in gold, silver, and gems. However, the jewelry industry currently has no brand dominating the market even though there are many big names such as PNJ, SJC, DOJI, Bao Tin Minh Chau. Compared to the market space, the market share of these firms is not large. Experts say that Vietnam’s gold jewelry market is really potential.
Consumption of jewelry is increasing
According to estimates by global management consulting firm McKinsey, in the next 10 years, the middle class in Vietnam could increase by 37 million people, spread out geographically.
The rise of this class along with the change in consumption trends from hoarding to hoarding and beauty will contribute to expanding the growth potential of the jewelry market. Middle-class customers are looking for trendy, high-end jewelry products with more sophisticated designs and big domestic and international brands.
At the general meeting of shareholders in April 2022, Mr. Le Tri Thong, General Director of PNJ, said that in the next 10 years, the trend of mid-high-end jewelry still has room for growth.
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| The Vietnamese jewelry market is growing rapidly thanks to a sharp increase in the number of middle-class customers in recent years. Photo: THU HA |
In big cities, the purchasing power of jewelry continues to increase, while in rural areas, customers also begin to change their shopping habits. Instead of buying gold for the purpose of hoarding, people began to have a need to buy mid- and high-end jewelry. Revenue results from jewelry businesses show that consumption is showing many positive signs.
Currently, PNJ is considered as a big brand in the industry. Vietnam’s largest jewelry retailer currently owns more than 350 stores, accounting for more than 30% of the total market share. This unit also has a very high recognition with a team of 1,000 goldsmiths, especially 160 workers are classified as artisans, accounting for 70% of the number of artisans in the country.
Besides PNJ, DOJI is also a familiar name, especially when this unit buys Diamond World. The deal marked DOJI’s acceleration in the fields of gold, silver, gems and jewelry, increasing its influence and ability to lead the market.
Many new factors come in
According to economic expert, Assoc. Prof. Dr. Dinh Trong Thinh, Vietnam’s jewelry market is assessed to have a rapid and strong increase. In recent years, the growth rate has reached 7%-11%/year, this number has clearly opened up many opportunities for gold businesses in general and jewelry in particular when participating in production and business.
The latest gold demand trend report of the World Gold Council (WGC) shows that the gold demand of Vietnamese consumers has increased from 12.6 tons in the second quarter of 2021 to 14 tons in the second quarter of 2022, 11% increase over the same period. This growth was driven by a 5 percent increase in total demand for bullion and copper, from 9.1 tons to 9.6 tons, and a 28% increase in gold jewelry demand, from 3.5 tons to 4 percent. 5 tons.
Regarding the profit growth of brands, the acquisition of a giant in the jewelry industry helps DOJI Group increase its profit after tax in 2021 to VND 132 billion.
For PNJ, in the past nine months, the company recorded net revenue and profit after tax of 25,574 billion dong, up 104% over the same period and 1,340 billion dong, up 133% over the same period. This result mainly came from the retail channel with a growth of 113%.
This year, PNJ sets a sales target of nearly VND 25,835 billion and profit after tax of nearly VND 1,320 billion, a record high. The brand’s wholesale channel also recovered with a better strategy of developing wholesale customer files, sales increased by 85%.
Perhaps that is why in May 2022, the big man in Pandora jewelry village (Denmark) was officially present in Vietnam with an investment of 100 million USD to build a factory in VSIP III Binh Duong Industrial Park. The project will start in early 2023 and go into production by the end of 2024. In 2021, Pandora has sold 102 million pieces of jewelry.
“Expanding Pandora’s manufacturing capabilities is critical to meeting projected demand. We are ready and excited for a new site in Vietnam,” said Mr. Jeerasage Pruranasamriddhi, Pandora Supply Manager.
Regarding domestic enterprises, the market also welcomes new factors such as FJC, a gold and high-end jewelry brand of FLC Group. At the time of launch, FLC said that the company has strengths in the field of mineral mining and processing, has advantages in terms of available materials and a large market space. Currently, FJC is still in the exploration stage with only one showroom in Hanoi.
Consumption trends change a lot
In fact, despite the large space, the domestic jewelry market is still facing many challenges. Some jewelry manufacturing enterprises do not have gold raw materials, have to collect them on the market, unintentionally creating conditions for gold to be smuggled, affecting the goal of stabilizing the exchange rate.
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| Vietnamese jewelry is meticulously crafted, with high aesthetic and application value. Photo: THU HA |
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Vietnamese jewelry is meticulously crafted, with high aesthetic and application value. Photo: THU HA |
From this perspective, Assoc. Prof. Dr. Dinh Trong Thinh informed that the management of imported gold is being managed very closely. However, this management inadvertently limits the jewelry market because according to current regulations for gold jewelry, the import of gold only serves the purpose of producing gold jewelry for export to earn foreign currency. for the country. Meanwhile, domestic demand is increasing. “I think we should consider increasing the amount of imported gold to produce for the domestic market and serve the people’s jewelry needs,” said Dr. Thinh.
In terms of retail, according to Assoc. Currently, imported goods on the market have the advantage of diverse designs, attracting many interested customers even though the quality is difficult to control.
Consumers are ready to shop
According to management consulting firm Boston Consulting Group (BCG), per capita income in Vietnam will increase from 1,400 USD/year to 3,400 USD/year by 2021. The number of middle class people also increases, which means that the demand for gold, silver and jewelry will also increase exponentially. In addition to beauty needs, many customers, especially young customers, also need jewelry and accessories to express their fashion and personality. Therefore, they are willing to shop and constantly innovate, placing high demands on the diversity, richness and variation in designs, materials, and product categories.
Market research company Vietnam Credit also informed that in a survey on the jewelry market, users said the durability of the product was the factor they were most concerned about. “Customers are very careful when choosing jewelry materials and are willing to pay high prices if they believe in the value of durability that the item brings,” – Vietnam Credit stated.
Besides, jewelry users tend to trust and choose products of famous brands, which are recognized by customers and have high reliability.
The field is not easy to “eat”
Although the jewelry playground has a lot of room for development, the retail jewelry industry does not always yield sweet results. For example, in mid-July, Mobile World Group officially announced to close the AVAJi jewelry segment after six months of market launch.
Previously, this was a chain of stores specializing in selling genuine jewelry accessories such as watches, necklaces, rings, glasses, earrings … in the product segment from popular to mid-range. This segmentation avoids competition with veteran giants like PNJ, which already has a strong position in the high-end segment.
Talking on the sidelines of a press conference, Mr. Doan Van Hieu Em – CEO of The Gioi Di Dong admitted that jewelry and sports are a difficult business segment of the enterprise.
THU HA