China's gold jewellery shops close as buyers favour bars and coins

On the main commercial street of Biyang, a county in central Henan province, most of the gold jewellery stores that once traded there have gone dark. Yu Qian, a 25-year-old kindergarten teacher who said she bought gold jewellery often, estimated that more than two-thirds of the county's 20-plus gold shops had already closed.

The pattern extends well beyond Henan. Jewellery retailers nationwide have been trimming their networks as demand weakens, with consumers shifting their attention toward gold bars and coins rather than finished pieces.

Recent corporate disclosures put numbers to the retreat. Chow Tai Seng reported a net reduction of 473 stores across the country, while Lao Feng Xiang said it had shut 342 outlets in third- and fourth-tier cities. China Gold cut 323 locations in the first half of the year, and Chow Tai Fook recorded a net loss of 258 mainland China stores in the second quarter, a contraction driven mainly by franchise closures.

Fred You, a Guangdong-based business development manager at a national jewellery brand that targets lower-tier markets, said small jewellery shops are now operating under heavy pressure.

Industry figures attribute the pullback to two forces: gold prices that are sitting at elevated but volatile levels, and a decline in marriages that has sapped a traditional source of demand for bridal gold. Jewellery sales fell by one-third in the first half of the year.