Preface
Throughout world history, jewelry has long been revered as a symbol of power, status, and wealth. Rare gemstones, precious metals, and exquisitely crafted masterpieces, all speak volumes about the social standing and identity of their owners, passed down through generations.
However, amid economic uncertainty in Chinese society, jewelry has transitioned from mere display pieces to fashion accessories through leasing companies or individual intermediaries, marking a burgeoning consumer trend. This shift reflects changing consumer attitudes and cultural dynamics.
The emerging market for jewelry leasing in China results from several factors, including the significant increase in the average income level of its citizens and the widespread information about high-end consumer markets.
According to the National Bureau of Statistics of China, the per capita disposable income of residents reached 39,218 yuan in 2023, marking a 6.3% growth compared to the previous year.
With the rise in personal income, these luxuries, once unfamiliar to Chinese consumers, have become top products in the shopping lists.
The “China Luxury Consumption Report” published by the Yaok Institute shows that in 2023, Chinese consumers globally spent a staggering 2,732.2 billion yuan on luxury goods, accounting for approximately 38% of the global luxury consumption share.
On popular Chinese social media platforms like Little Redbook (Xiaohongshu) and Weibo, fashion icons, celebrities and common consumers frequently showcase their “trophies”, with brands like Bulgari, Cartier, Tiffany & Co., and Van Cleef & Arpels rapidly becoming trending hashtags. It appears that in China, luxury is no longer unattainable but has become accessible for many.
But is that really the case?
Since the outbreak of the pandemic, China has been facing economic challenges, with urban unemployment rates remaining high at around 5% over the past five years and GDP growth slowing down. Amidst these cloudy economic prospects, jewelry leasing become a happy choice for young people to maintain a glamorous lifestyle without economic pressures.
“These materials are worthless.”
Cost-effectiveness Considerations
Under the dazzling lights of luxury boutiques and against the austere faces of salespeople, these branded items appear so noble and mysterious. But once away from the counters, the metal stamped with Chanel logos will oxidize and fade, and the gemstones of Van Cleef & Arpels will lose lustre.
“I’m well aware that these jewelry materials are worthless,” said Stella during the interview, a 26-year-old realtor, emphasizing her rational approach to consumption and efficiency. “But I respect the original designs and concepts of the brands, so I prefer not to buy those imitations.”
Despite the younger generation’s pursuit of quality living being no different from other generations, faced with increasingly daunting economic challenges such as exorbitant housing prices and soaring living costs, many are beginning to prioritize the value and practicality of their consumption.
Jewelry leasing becomes the choice for young people who are unwilling to buy imitations, striking a balance between utility and value. Without bearing the hefty cost upfront, they can still enjoy the beauty of jewelry.
“Since Van Cleef & Arpels can’t hold its value, why should I possess it for long-term?” Stella remarked calmly. “With the price of buying one necklace, I can experience twenty.”
Through leasing, young people can explore various styles and brands of jewelry, enriching their consumption experience. They can easily change jewelry according to their preferences and style, continuously exploring and discovering styles that suit them, thus increasing the enjoyment and satisfaction of consumption without feeling constrained by the high cost of purchasing.
“I could even choose which jewelry to rent and wear depending on the color of my outfit,” Stella smiled, satisfied with this industry. “I felt like a queen!”
“I want to be friends with the cool kids”
Social Considerations
In July 2018, the renowned Russian model Natasha Poly initiated a new social media challenge called the #fallingstarschallenge on her personal Instagram, which quickly gained popularity among young people as they posted photos of themselves “falling” from luxury cars, with designer handbags, champagne glasses, and all kinds of jewelry scattered on the ground, attracting the attention of netizens.
“For a long time, my classmates have been posting such photos on Instagram and Xiaohongshu,” Grace said, a college girl majoring in philosophy. “When I scroll my phone, I was overwhelmed by photos with peers wearing brands that I’ve only seen in advertisements.“
“Certainly, people who post this kind of photo were regarded as the cool kids at school,” Grace described. These fifteen or sixteen-year-old teenagers always gather in groups in the hallway, discussing the expensive jewelry of the wealthy celebrity Floyd Mayweather.
Grace was studying in a Shanghai International High School. Becoming friends with the cool kids was something she dreamed of. And she firmly believed that doing the #fallingstarschallenge photo could attract her peers’ attention. Therefore, Grace found a person who was engaging in jewelry leasing business on Xianyu, a Chinese online marketplace.
“I’m not a vain girl,” Grace said frankly. “Even though my family is relatively well-off, my parents wouldn’t allow me to buy these flashy things. It doesn’t align with their generation’s views on consumption.”
“But without this photo I would never have common topics with them” Grace said.
This was definitely not Grace’s personal social dilemma.
In 2018, Wednesday Martin, a Yale University graduate and PhD, also wrote similar words in her world-famous book Primates of Park Avenue: “I’m a mom and I need a Birkin bag.” The author wrote in the book that if she didn’t carry the famous Birkin bag from Hermès, none of the families in the community would be willing to associate with her and her daughter. She tried to reveal the social pressure that still exists in the specific social circle of the Upper East Side, where luxury goods are seen as one of the means to maintain social status and meet social expectations.
For Grace and Dr. Martin, luxury goods were a must.
Jonathan Ernest, the Associate Professor of Economics at Case Western Reserve University, said in an interview with the Hong Kong Economic Times, “This means that millennials may benefit more from owning luxury goods because they gain the admiration of their peers, friends, family, and also followers.”
“I want to be respected by my husband’s family.”
Cultural Considerations
According to industry research reports released by the China Jewelry Association, gold products sales accounted for 63% of the total jewelry sales in China in 2023, with a market size of approximately 518 billion yuan. The popularity of gold jewelry in China is not only due to its financial attributes but also because gold plays an important role in Chinese culture.
In regions like Guangdong and Fujian, on the wedding day, the bride will display all gold jewelry given by bride and groom’s relatives, including necklaces and bracelets. These kinds of jewelry are called “bless card” Fu Pai and “bracelets with dragon and phoenix” Long Feng Zhuo, symbolizing the wish for the couple’s love to be as strong as gold. The famous Hong Kong actress Myolie Wu was nicknamed the “golden bride” by netizens as she was covered with gold jewelry on her special day.
Due to the instability of the international situation and the global economy, the price of gold has skyrocketed from 555 yuan/g in 2023 to a record high of 737 yuan/g as of April this year. As estimated, a “bless card” and a pair of “bracelets with dragon and phoenix” are valued at around 30,000 yuan respectively. The tradition of “the more, the better” when it comes to wedding jewelry has turned the wedding accessory budget into a bottomless pit.
Is this traditional custom really worth its cost?
Some young people believe that these large-sized, extravagant gold pieces are not suitable for daily wear and are regarded as “disposable” items for the wedding day, not worth investing a large amount of money in. Others, due to limited wedding budgets, find it difficult to pay thousands for accessories all at once. There is a widespread demand among consumers to make a big impression with a low budget, which has driven the development of the wedding accessory rental market.
During the promotion, many vendors avoid using the word “leasing” and instead employ phrases like “own it now” to cater to young consumers’ demands, creating a luxurious ambiance.
For vendors, the high insurance costs associated with its expensive price, and logistics are indeed the objective problems in the jewelry leasing market.
“Actually, the profit from our gold jewelry leasing service is not high because the leasing prices are relatively low. Additionally, almost all the gold jewelry items are distorted after being returned, and we need to pay 30% of the rental fee as a processing cost,” Qiuqiu said.
After customers place their orders, Qiuqiu provides leasing services through two methods: online shipping or offline transactions.
Valerie Jiang, Selina Su
Website created by Victoria Cai
Special thanks to Uli Gaulke & Foon Lee
Photos generated by Midjourney