Pandora, Swarovski lose traction in China as shoppers shift to gold and lab-grown diamonds
In the first quarter, China’s gold consumption reached 303.3 metric tons, up 4.4 per cent year on year
Once popular among young Chinese consumers, Danish affordable jeweller Pandora and Austria’s Swarovski have closed a large number of their mainland stores amid lost brand appeal, as shoppers now prefer high-end luxury goods or value-preserving products like gold.
Copenhagen-listed Pandora was at its peak in China in 2019, operating more than 240 stores and posting revenue of 1.97 billion Danish kroner (US$300 million). Its mainland sales have declined annually ever since.
Last year, China made up just 1 per cent of its global revenue, down from 9 per cent in 2019, according to its annual reports.
“We have observed a divergent trend in Chinese consumer preferences towards high-end luxury with strong heritage or value-preserving products like gold,” said Maggie Xie, associate director at S&P Global Ratings, who added that rising awareness of domestic brands and upgraded designs and customer service were “eroding mid-market differentiation.”
“Core materials used by Pandora and Swarovski – silver and crystal glass respectively – are increasingly perceived by Chinese consumers as lacking long-term value and being prone to tarnishing,” Xie said.
Asia-Pacific was Pandora’s main growth driver in the first quarter, led by Japan, but the company closed 99 stores in China in the previous 12 months, according to its first-quarter earnings report.
