The era of thousand-yuan gold prices continues with constant fluctuations.
On September 1st, the Shanghai Gold 2510 contract closed up 2.08% at 800.56 yuan/gram, returning above the 800 yuan/gram mark. The gold price surge transmitted to the gold consumer market, with multiple brand gold jewelry prices returning to the high of over 1,000 yuan per gram. On September 2nd, Chow Tai Fook, Tomei, and other brands' pure gold jewelry were all priced at 1,037 yuan/gram, while Caibai's pure gold was quoted at 1,005 yuan/gram.
With gold prices remaining persistently high, the performance of gold jewelry companies in the first half of 2025 further diverged. The top-tier represented by Lao Pu Gold delivered excellent results with explosive growth in revenue and net profit, even raising prices twice within six months. Other standout performers included Zhou Liu Fu entering the Hong Kong stock market, Tomei's counter-trend expansion, and Caibai's strength in investment gold bars. In contrast, some traditional gold jewelry giants such as Lao Feng Xiang Co.,Ltd. and Chow Tai Seng Jewellery Co., Ltd. found themselves trapped in the predicament of declining revenue and net profit.
Reporters noted that high gold prices have made consumers more rational and cautious, favoring lightweight, design-strong, high-value-added jewelry products. Demand for gold bars from gold stores remains strong, but profits are low. Major gold jewelry brands have crowded into the "ancient method" track and rushed to create IP crossover products. However, behind the buzz, homogeneous competition is intensifying, and how to achieve true differentiation has become a key challenge facing the industry.
According to data published by the China Gold Association, national gold consumption in the first half of 2025 decreased by 3.54% year-on-year, with gold jewelry consumption dropping by 26%. However, National Bureau of Statistics data shows that retail sales of gold, silver, and jewelry by enterprises above designated size still maintained an 11.3% year-on-year growth. Industry analysis indicates that gold products still occupy an absolute dominant position in China's jewelry market, but consumption motives and product structures are undergoing profound changes.
At press time, gold prices welcomed another wave of increases. In this market of mixed signals, in this industry examination transitioning from price carnival to value cultivation, who needs to retake the test?
**Gold Sales Struggle, Both Lao Feng Xiang Co.,Ltd. and Chow Tai Seng Jewellery Co., Ltd. See Performance Decline**
In the first half of 2025, gold prices continued their strong upward trend, and the high-price environment significantly suppressed gold jewelry consumption, putting pressure on many gold jewelry companies' revenues.
Lao Feng Xiang Co.,Ltd.'s double-digit decline in performance couldn't hide the embarrassment of "gold not selling." First-half revenue fell 16.52% year-on-year to 33.4 billion yuan, with net profit attributable to shareholders down 13.07% to approximately 1.2 billion yuan, and non-recurring net profit declining 27.86%. By comparison, Chow Tai Seng Jewellery Co., Ltd.'s first-half revenue fell 43.92% year-on-year to 4.597 billion yuan, with net profit attributable to shareholders declining slightly by 1.27% to 594 million yuan. Among these, plain gold products were most significantly affected by gold prices, with revenue plummeting 50.94% year-on-year. The company managed to ease profit pressure to some extent by optimizing product structure and capturing pricing opportunities from rising gold prices, lifting overall gross margin by 11.96 percentage points to 30.34%.
While the industry overall faced pressure, some brands still achieved counter-trend growth. Zhou Liu Fu's first interim report after listing in Hong Kong showed first-half revenue of 3.15 billion yuan, up 5.2% year-on-year; net profit of 415 million yuan, up 11.9%. Tomei, preparing for Hong Kong listing, recorded first-half revenue of 4.102 billion yuan, up 19.54% year-on-year; net profit attributable to shareholders of 331 million yuan, up 44.34%. Caibai's first-half revenue reached 15.248 billion yuan, up 38.75% year-on-year; net profit attributable to shareholders of 459 million yuan, up 14.75%.
Hidden concerns remain behind high growth. While Zhou Liu Fu improved gross margin through priced gold products, rising gold prices suppressed heavy gold sales, and its franchise model still showed weakness. Caibai's net profit growth partly came from bank wealth management and equity instrument investment returns, with non-recurring net profit attributable to shareholders increasing only 2.57%. Additionally, performance growth largely depended on hot sales of investment products like gold bars.
In contrast, Lao Pu Gold's performance was golden, with first-half revenue reaching 12.354 billion yuan, up 251% year-on-year; net profit of 2.268 billion yuan, up 285.8%. As of June 30, Lao Pu Gold operated 41 stores. In the first half of this year, Lao Pu Gold's average sales performance per mall reached 459 million yuan. However, industry observers note that Lao Pu Gold's explosive growth carries structural risks. Currently, while ancient method gold sells well, the craft barriers are limited and easily imitated. As competitors increase and crafts become homogeneous, how long consumer enthusiasm can be maintained remains unknown.
In recent months, Lao Pu Gold's stock price has fluctuated dramatically. After reaching a historic peak of HK$1,108 in early July, the company's stock price experienced significant correction. As of September 2, the stock price stood at HK$746, with total market capitalization of approximately HK$128.8 billion.
**Store Closures Continue, Zhou Liu Fu Reduces 278 Stores**
Under pressure in the gold jewelry market, channel restructuring has become a core challenge facing industry enterprises. The franchise model, long an important revenue source, has now become a "double-edged sword," placing companies in a dilemma between expansion and contraction.
In recent years, multiple leading gold jewelry brands have contracted franchise scale to address store oversupply and efficiency issues. In 2024, Lao Feng Xiang Co.,Ltd.'s franchise stores, representing 96% of total stores, decreased by 166 to 5,641. By the end of June 2025, franchise stores decreased to 5,362, with total stores at 5,550.
Chow Tai Seng Jewellery Co., Ltd. also reduced 290 stores net in the first half of this year, with total stores at 4,718 by the end of June, including 4,311 franchise stores. The franchise withdrawal rate during the reporting period reached 9.16%, totaling 395 stores. Zhou Liu Fu's total stores dropped to 3,857 during the same period, with 3,760 franchise stores, a net reduction of 278. Chow Sang Sang closed 74 stores net in 2024 and reduced another 75 net in the first half of this year, opening 11 new jewelry branches in mainland China while closing 85.
Behind large-scale closures is strategic adjustment by brands to optimize retail networks and eliminate inefficient outlets. Traditional brands including Lao Feng Xiang Co.,Ltd. and Zhou Liu Fu generally have franchise ratios exceeding 80%, with profitability highly dependent on channel scale. Current industry consensus is that companies shouldn't blindly pursue store quantity but should focus more on single-store output and consumer experience upgrades. Companies choose to close underperforming franchise stores while attempting to open more experience stores, high-end stores, and brand flagships, borrowing from experience-focused opening models like Lao Pu Gold. Analysis indicates that strengthening offline service functions—such as immersive try-ons, personalized customization, and membership operations—has become a key strategy for enterprises to improve repeat purchases and conversion rates while addressing market pressure.
However, franchise contraction directly impacts corporate revenue. According to financial reports, Chow Tai Seng Jewellery Co., Ltd.'s first-half franchise business revenue was 2.425 billion yuan, down 59.12% year-on-year, with store closure revenue impact of 246 million yuan, accounting for 5.35% of revenue. Zhou Liu Fu's franchise model revenue fell 17% year-on-year, with revenue share dropping to 39%, significantly down from over 50% during 2022-2024.
Not all enterprises adopted contraction strategies. Tomei expanded counter-trend, with total jewelry stores reaching 1,540 by the end of June, including 1,340 franchise stores, a net increase of 72 from year-beginning. Its franchise revenue grew 36.2% year-on-year, while direct sales revenue increased only 4.8%. The company also actively entered high-end commercial complexes like SKP, promoting channel structure transformation toward shopping centers and brand flagships.
"While the franchise model helps enterprises expand rapidly and maintain high profit levels, it may also cause trust crises between brands and consumers due to management oversights," said Wang Ning, an independent fashion consultant.
Data from the consumer complaint platform shows that Lao Feng Xiang Co.,Ltd., Zhou Liu Fu, and Chow Tai Seng Jewellery Co., Ltd. each face thousands of complaints, mostly involving franchise store issues such as "concealing weight," "misleading consumption," and "poor after-sales service." Wang Ning believes that while online channels are growing rapidly, offline channel system optimization and brand upgrades still require time. "How to effectively balance franchise model adjustments, online business expansion, and brand value enhancement will become a key test of whether gold jewelry enterprises can achieve sustainable growth."
**"Ancient Method Gold" Competitive Siege, "Gold Hermès" Model Faces Test**
While Lao Pu Gold continues leading in the "ancient method gold" track, it faces increasingly fierce market competition. Although it performed excellently in the 2025 gold jewelry market with this category, numerous new and established brands have entered the field, launching similar craft products, making the track increasingly crowded.
Currently, Chow Tai Fook, Lao Feng Xiang Co.,Ltd., Caibai, and Lin Chao Jewelry have all entered the ancient method gold field, with competition surpassing simple imitation. Ancient method gold and pure gold inlay crafts themselves lack exclusivity, and multiple enterprises are heavily investing in R&D, actively deploying ancient method gold, cultural IP, and intangible heritage crafts, including signing craft art masters, establishing master workshops, and launching co-branded products with cultural institutions like the Forbidden City and National Museum. For example, Chow Tai Fook noted in its 2025 fiscal year report that both "Chuan Fu Series" and "Forbidden City Series" achieved sales of approximately HK$4 billion each.
In comparison, Lao Pu Gold's 2024 R&D investment was 19.16 million yuan, increasing to 24.51 million yuan in the first half of 2025. However, compared to its total revenue scale of 12.354 billion yuan, the investment proportion remains quite low and far below the 1.464 billion yuan in sales and distribution expenses during the same period.
Lao Pu Gold's positioning isn't as a traditional gold jewelry enterprise; its ambition is to become the "Hermès of gold." According to Frost & Sullivan research data provided in financial reports, Lao Pu Gold consumers have an average overlap rate of 77.3% with consumers of five major international luxury brands including Louis Vuitton, Hermès, and Cartier, showing strong high-end consumption characteristics. Moreover, Lao Pu Gold borrows luxury brand pricing strategies, conducting two to three price adjustments annually, often triggering market rushes.
Jiang Hanfrom Pangoal Institution's senior researcher believes that Lao Pu Gold effectively stimulated sales growth by creating scarcity and purchase urgency through moderate price increases. He also warns that over-reliance on pricing strategies while neglecting product innovation and quality improvement may cause consumers to gradually shift to other brands, creating dual pressure on market share and stock price. Recently, when Lao Pu Gold announced another price increase, market reaction has become "lukewarm," with many stores no longer experiencing the previous rush phenomena.
Zhou Ting, dean of VIP Research Institute, believes that under the industry's overall luxury trend, future gold jewelry brands will gradually concentrate toward high-end, with mass brand survival space narrowing. "But as consumers become increasingly rational, affecting the entire jewelry and watch hard luxury market, it will naturally also affect the gold jewelry industry." As homogeneous competition intensifies, Lao Pu Gold's craft barriers and differentiation advantages are being gradually diluted, and whether it can continue maintaining high growth remains highly uncertain.
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