Costume Jewelry Report — Industry Overview — Sample Pages: Sourcing Costume Jewelry from China

Industry Overview: Costume Jewelry

China's roughly 5,000 costume jewelry manufacturers produce about half of the world's supply, and the industry was growing at better than 50 percent per year when this overview was researched. Higher raw material costs and a growing supplier base were nevertheless intensifying competition: prices of petroleum-based materials had been escalating since 2004 with the cost of crude oil, metal costs had risen marginally, and most manufacturers raised prices at the start of 2005 to offset higher expenses. The average export value per gram of costume jewelry exported from China rose 24 percent in the first ten months of 2005.

That increase is only partly a price story. An up-market shift among suppliers is also at work: with exports growing healthily for two years and a low entry barrier attracting new companies, established makers are moving from low-end production toward midrange and high-end lines to distinguish themselves, drawing on their experience, financial stability and design expertise. Some now specialize in sterling silver models, many plated in 18K gold. Most manufacturers who raised prices in 2005, and those that had moved up-market, did not expect to raise prices again in 2006, even though raw material costs were not expected to stabilize in the coming months.

How to Read This Overview as a Buyer

Read the overview for decisions, not background. The cost figures tell you how much room a supplier has to negotiate: a maker absorbing most of a cost increase will either raise prices soon or cut somewhere you cannot see, and both possibilities belong in your order planning. The competition analysis tells you where your enquiry has leverage — crowded, standardised segments compete on price, while design-led segments compete on capability — and the supplier survey turns the industry's own expectations about prices, sales, research focus and capacity into a planning horizon for the year ahead. In this report, established companies are moving up-market, some specialising in sterling silver plated in 18K gold, a fact the full overview develops with production and survey detail.

The overview also frames the 61 profiles that follow it. A profile's prices mean little until they are set against the overview's price trends; a factory's expansion plan means more when two-thirds of its competitors are expanding too. Buyers who read the overview first consistently shortlist better, because they know which claims to test when they reach the profiles and the product gallery.

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