Laopu Gold’s Jewellery sells like pancakes despite vibrant consumer spending in China
Laop GoldBeijing-based jeweller known for his handmade accessories, has emerged as a favorite among them. The wealthy consumerglobal luxury brands like Louis Vuitton and Gucci are tackling the decline in lukewarm consumer spending and region-wide sales in China.
The Hong Kong-listed company sold 3.5 billion yuan (USD 482.7 million) of pure gold and gem set jewelry in the first half of 2024 at just 36 stores in China, an increase of 148% from the previous year. That provisional report. Its net profit rose nearly 200% to reach 588 million yuan over the same period.
Laopu Gold’s shares have risen more than 550% since the company’s trading debut in June, reaching a high of 457 (US$58.7) on Tuesday.
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Gold prices are rising For almost a year, consumer sentiment remained restrained as China slows down, but demand for mass market gold jewelry has declined. However, Laopu’s performance is “very different,” which “focuses entirely on the high-end market,” said Richard Lin, chief consumer analyst at investment bank SPDB International.
“Wealthy consumers are not only unaffected by the broader economic situation, but more importantly, unlike the average consumer who purchases gold for accessories or consumption, the investment value of gold products is the value of gold. We also consider it,” he said.
Laopu’s success is partly due to its pricing model. Unlike competitors Chautai hook jewelry – Sells most of the gold accessories based on a dynamic price model that rises and falls with yellow metal – Raop follows the “fixed price” model. Craftsmanship.
For Laop, this means more profits. According to the preliminary report, the company’s total margin reached 41.3% in the first half of 2024, compared to about 20% of Chow Tai Fook.
“As the price of gold is currently around 600 yuan ($82.30 USD) per gram, it is likely to continue to rise, so many consumers are thinking its product,” Lin said. “It’s basically about brand power.”
The appeal of Laop among young and wealthy people also has been linked to the promotion of “Heritage Gold,” a pure gold jewelry that combines ancient craft techniques, Chinese culture and design elements inspired by Buddhist beliefs. It is being done.
Sheila Chang, a Beijing-based financial expert, purchased a prayer wheel necklace worth around 20,000 yuan in January. She said her first impression of Laop was “very different from other brands.”
Shoppers at an outdoor mall in Beijing. Photo: AP alt = Shoppers at an outdoor mall in Beijing. Photo: AP>
The shop she visited in Wanghujin, a commercial district in the city centre, offers two main categories of jewelry. One features traditional Chinese and Taoism-inspired accessories, while the other focuses on Buddhism.
“Overall, Laopu is very simple and clear in its products, which surprisingly makes choices easier when compared to other brands that overwhelm you with options,” she said. “Because the style is very unique.”
Chan is not the only one who feels this way. The reintroduction, the Chinese social media app that has recently been promoted to international fame due to Tiktok’s US crackdown, has received over 1.2 million posts featuring the hashtag “Laop Gold.” These posts feature the intricate craftsmanship of the jeweler’s necklace and rings, as well as videos of long lines outside the store.
“I love this brand. I have to work hard to make more money,” he said in a re-notebook named Yoyo Zaizai, who posted a photo of herself wearing a gold pendant. The user writes. “So beautiful. Once you start buying Laopu, you can’t escape the ‘pit’. ”
Laop Gold is profiting as gold prices hit an all-time high this week, sparking demand for safe inventory assets amidst the chaos caused by US tariffs. China International Capital Corporation predicted in October that its net profit could reach 1.7 billion yuan in 2025, adding that it could reach 2.3 billion yuan in 2026.
However, there are risks on the negative side. As the company’s stocks rise as gold prices skyrocket, Laopu could lose favour among consumers when gold prices begin to fall.
“When that happens, the question is whether Laop’s brand strength can offset some of the negative effects of the gold price decline cycle,” Lin said. “That’s a possibility.”
