This original article is from the WeChat public account: DT Business Observation, ID: DTcaijing, Author: Zheng Xiaohui Design: Qi Tonghui, Data: Zheng Shuya, Zheng Xiaohui, Wang Qingrun, Operation: Su Hongrui Producer: Li Jingyu.
The gold boom continues, but young people are more savvy than they think.
Nowadays, instead of buying gold jewelry directly at the brand counter, some young people are beginning to prefer to find a gold processing shop to process physical gold bars into gold jewelry, including the "three golds" for marriage.
On Xiaohongshu, the number of notes related to "striking gold" reached 130,000.
For reference, after "dopamine dressing" began to come out of the circle in June last year, the number of notes in August was about 110,000 (now it has risen to nearly 3 million).
"Gold strike" has also become the traffic password of the video.
On Douyin, an amateur blogger usually has an average of about 50 likes on his videos, but with a video of a gold bar made into a gold bracelet, it has received 615,000 likes, 278,000 shares and 68,000 favorites.
Many people said "really fragrant" in the comment area, shared it with their other half or good friends, and said, "There is still this kind of operation, let's do it in the future".
How much money can be saved by buying gold bars and making gold jewelry? How do young people find this way to save money? In addition to saving money, what are the reasons why young people are willing to pay for it?
How much money can I save by buying gold bars for jewelry?
In January 2024, Guanzi (pseudonym), a post-95s illustrator, used a 50-gram gold bar purchased from the bank to make a pair of gold rings and a bracelet in his hometown.
Looking mediocre, the result was compared with the cost of buying rings and bracelets of the same gram weight in a brand store, but I didn't expect to save 10,000 yuan, which is about equal to the price of 16 grams of gold.
If you carefully disassemble the cost of this process, you will find that Guanzi won at the starting line from the beginning of "buying gold bars at the bank".
Generally speaking, the price of gold jewelry = raw material cost (gold price) + labor cost.
Let's start with the price of gold.
Since 2022, the price of gold (Au99.99, that is, 1,000 pure gold) has not only been rising, but the retail price of gold in Chow Tai Fook has also been about 30% more expensive than the price of gold on average, and has exceeded a high of 600 yuan/gram in the new year.
In contrast, although the unit price of physical gold bars from banks is more than a dozen yuan more expensive than gold, it is still about 100 yuan/gram cheaper than the retail price of branded gold, and it can be seen and touched, so it has become a cost-effective choice for many people to invest in gold and buy gold bars.
In the case of Guanzi, she bought a 50-gram gold bar from ICBC at a price of 436.45 yuan/gram in early January 2023, when the retail price of Chow Tai Fook's gold was 549 yuan/gram.
(Respondent @观子用50g金条打了结婚对戒和手镯)
Secondly, the labor cost of gold striking shops is also lower than that of brand stores.
Taking Chow Tai Fook, Chow Sang Sang and other major brands of about 30g gold ancient plain ring bracelets as an example, the average labor cost per gram is more than 30 yuan, and the most expensive one reaches 62.7 yuan / gram, with a total labor cost of 1880 yuan.
The labor cost of the gold shop often has different price gradients according to the number of grams.
Compared with the gold striking shop that Guanzi went, the processing fee for a bracelet of 30g (and above) is 15 yuan/gram, a total of 450 yuan.
In this way, the cost of raw materials has been saved, and the processing cost has also been saved a lot.
How did young people get on this money-saving road?
There are more and more people who want to join the money-saving army of "buying gold-striking gold".
However, there are not a few people who suggest lightning protection and "strike gold".
Because of the different processing levels of different masters, some unscrupulous merchants may also mix silver, iron, and copper in the process of exchanging and processing gold bars, and "deduct" gold.
In this regard, Guanzi summed up a set of his own experiences -
First search for "gold + region/city" on Douyin, then send a private message to learn about the price and style of processing, make an appointment to inspect offline, see if there is a machine to detect the purity of gold, etc., whether it can be seen on the spot and can be photographed at close range, and finally decide whether to pay.
(Respondent @观子在现场近距离拍摄打金店师傅加工戒指)
Some experienced netizens also summarized the gold shop gold process, starting from confirming the style and charging method, every step should not be sloppy.
In the four steps of weighing, melting, confirming the finished product and settling the settlement, the consumer needs to repeatedly confirm the gram size and gold purity, and finally ask the store to issue a test report on the gold content.
Content platforms such as Douyin, Xiaohongshu, and Station B have invisibly become the boosters of this "gold-struck" craze.
Just like the local gold mining shops found by Guanzi on Douyin, in order to get more customers, many gold mining stores will take the initiative to operate content platform accounts.
The content of the account is usually based on processed styles, using close-up shots to show the effect of customers wearing them up close, and then guiding consumers to contact them privately in the comment area to further communicate details.
Some gold mining shops will even publish their specific addresses on the Douyin homepage, so that customers can communicate directly with the store, watch the gold mining process, and answer consumers' doubts on the spot as much as possible, so as to facilitate transactions.
Although some gold striking shops do not operate official accounts, they have benefited from the spontaneous sharing of young consumers and have passively gone out of the circle.
As a result, it not only aroused more consumers' curiosity about gold mining, but also brought a booming business to gold mining shops.
According to a report by Hangzhou.com, a husband-and-wife gold shop in Hangzhou has been open for more than 30 years and usually does not take photos or videos.
Because some young customers posted photos on social platforms after getting satisfactory gold jewelry, the popularity of gold shops remained high for a while, and a group of customers lined up outside the door at 8 o'clock in the morning.
Save money and looks, young people want them all
Choosing a gold mining shop, saving money is of course the first factor influencing decision-making.
But this does not mean that young people will reduce their pursuit of style and appearance, and let the master polish it casually.
Judging from the circle of friends and Douyin videos of the owner of the gold shop, the ancient gold plain bracelet is a popular item in many gold shops.
Ancient gold is a type of pure gold jewelry divided according to processing technology, mainly including ancient casting, handmade fine gold, handmade gold repair three major processes, including filigree, inlay, engraving, burning blue and other skills.
Ancient gold plain bracelets, because of their simple style and matte surface, are often labeled as "good-looking", "chic" and "textured", and are deeply loved by young people.
In the past 90 days, there have been 15,800 notes related to "gold strike" on Xiaohongshu, and in addition to the high-frequency words of the gold striking production process and style, "ancient method" is the only high-frequency word related to processing technology on the TOP 10 list.
There are as many as 45,400 notes related to "ancient gold" on Xiaohongshu, and people not only like to wear ancient gold bracelets on a daily basis, but also like to use it as the preferred style of "three gold for marriage".
But as mentioned earlier, well-known gold brands tend to sell for gold and processing fees more due to brand premiums.
This is especially true of ancient gold jewelry.
For example, as early as 2016, the concept of "ancient gold" was mainly used in the concept of old-fashioned gold, although there is still a large gap between the revenue scale and Chow Tai Fook, Chow Sang Sheng, etc., but with high pricing, the gross profit margin is "outstanding".
According to the prospectus, from 2019 to the first half of 2023, the gross profit margin of Laopu Gold has been stable at around 40%.
Chow Tai Fook hovered around 25%, with a peak of 29.6%.
Although Chow Tai Fook's overall gross profit margin is inferior to that of Laopu Gold, its "Inheritance Series", which uses ancient gold as its selling point, has made a lot of money for the company for three consecutive years.
From FY2021 to the first half of FY2024, the "Heritage Series" accounted for around 40% of Chow Tai Fook's gold jewellery revenue.
Guanzi is also one of the proponents of ancient gold jewelry, and likes the plain style and frosted feel.
However, after further comparing the physical stores, gold shops and manufacturers of gold brands, Guanzi believes that the finished products of the ancient plain circle look similar, and the key is to look at the gram weight and price.
"Recently, because I was in a hurry to get married, I bought gold jewelry for my family in an offline brand store. At first, the people in the store couldn't tell that my bracelet was made, and they thought I was buying a certain brand collection," says Kanko.
In fact, the prospectus of Laopu Gold also shows that from 2017 to 2020, a considerable part of the products come from outsourcing processing.
Even after the stable operation of the self-built factory in 2020, the proportion of outsourced processed products is still close to half, reaching 46.71%, and the processing fee is 24.56 yuan/gram.
Write at the end
Some people say that the core that drives young people to buy gold is to please themselves.
According to the World Gold Council's 2022 China Jewellery Market Trend Insights report, consumers who aim to wear themselves contribute the most retail revenue to retailers surveyed, accounting for 39% of the total retail revenue.
Wedding demand, which was previously considered the largest part of sales, actually only accounts for 19% of sales.
However, combined with interviews and current consumer trends, each factor is important in terms of the "value preservation" of gold, the "appearance" of the product, and the "emotional value" of pleasing oneself.
Guanzi and his friends believe that making gold bars into jewelry is essentially an investment, and "if you sell it now, it will be recycled at about 480 yuan per gram."
Therefore, in addition to working style and emotional resonance in marketing, brands must also make up for other "shortcomings" in quality, price and service, and improve the competitiveness of products in an all-round way in order to capture more consumers.
Of course, when buying gold, you still have to look at the right time to start, don't buy blindly.
Otherwise, when I look back, I find that I bought at the highest price of gold - I saved money, but it seems that I didn't save it.