Horizontal Comparison
Social Factor in New York, Shanghai, and Hong Kong
Social factors are a term that is used in representing another set of influences on consumer behavior. The social factors mainly affect the people and groups and they influence each other throughout the subculture and culture. The social factors that will be used in horizontally comparing the three cities include age distribution, preference, and levels of employment, income statistics, income level, population growth rate, education and career trends, religious beliefs, and cultural and social conventions.
The jewelry industry is dynamic and it has been growing fast. Consequential changes have been underway in consumer behavior and the industry itself. The jewelry players do not do business as usual and still expect to thrive but they have to be responsive and alert to the crucial trends and developments and they are left behind by more agile competitors. A statistic showed that in the year 2018, approximately 12.5% population in New York was from 25 to 44 years old. The age group between 25- 34 years spend 28% more than the average household and these people but more jewelry but at a lower price and the age, distribution will lead to an increase in demand for jewelry. In Hong Kong, the jewelry industry has been dominated by people who are between 28 and 40. In a study conducted in 2019, 12.33% of the population in Hong Kong were between 0 to 14 years old whole 70.18% of them were from 15 to 64 and 17.5% were 65 years and older (Salmela & Vimm, 2018). The highest population that is from 15 to 64 will lead to an increase in demand for jewelry. Contrarily, Shanghai’s highest population is from 0 to 14 years old and the least is 65 years and older. The people who will but the jewels are more than 14 years and there will be a decrease in demand for jewelry.
In New York City, people prefer shopping for fashionable clothes instead of jewelry. This may negatively affect the jewelry industry. However, the industry can use an approach whereby the people match their fashionable outfits to the jewelry. Most of the people in Shanghai prefer shopping for silk instead of jewelry. Silk is a material that is used in making clothes and it is very expensive. People may buy silk instead of jewelry further leading to a decreased demand for jewels in the industry. In Hong Kong, people prefer buying designer clothes since they want to be deemed fashionable and this may reduce the number of customers and investors in the company.
As of the year 2020, there has been an increase in New York’s unemployment rate from 14.5% to 15.7%. The high unemployment rates may negatively affect the jewelry industry since people will not have the capability of buying the jewelry and the demand will lower. Shanghai has an unemployment rate of 3.57% and this means that most people are employed. A high employment rate suggests that there will be an increased demand for jewelry. Similar to New York, Hong Kong has a medium unemployment rate, which has risen from 5.2% to 5.9% (Wong, 2020). It shows that the demand for jewelry in the city is expected to be low.
The average income of the people living in New York is $63, 799 and it has grown from $60, 7879, which translates to a 4.8% increase. The rise in income rates will have an increase in demand for jewelry since the people are paid well and this means that they will buy more jewelry (Kingold Jewelry, Inc. PESTEL / PEST & environment Analysis[Strategy], n.d). The disposable income for the workers in Shanghai is 69, 442 Yuan and it has increased from 64, 183 Yuan and this means that people will purchase more jewelry and the demand will increase. The median household income per month for Hong Kong workers is 27, 000 Hong Kong dollars (Wong, 2020). The high income also increases the demand since people purchase more jewels.
The United States Census Bureau population estimated an increase in the New York population from 8, 175, 133 in 2005 to 8, 398, and 748 in 2018. The high population increases the demand for jewelry since the higher the population the more there will be an increased interest in jewelry. On the other hand, the growth rate in Shanghai grew from 2000 to 2010 and then steadied for some time and currently, it is lower. The low population growth rate decreases the demand for jewelry (Adamkasi, 2017). Nonetheless, the population in Hong Kong has increased to 7, 499, 888, this may lead to a higher demand for jewelry, and the company must supply more jewelry to the people to satisfy the vast customer base in the city.
In addition to that, New York has ranked eighth in the overall education system. The public school system in New York City has been the largest and most people in the city have been educated. High education increases the demand for jewelry since people understand the value and importance of jewelry. However, the company must produce original jewels to attract more people. Of the total Shanghai population, 22.0% of them had a college education, 21% had a high school education, and 36.5% had a middle school education, 1. 35% had primary school education and 2.74% of them were illiterate. It shows that most of the population in the city was literate and this increases the demand for jewelry since they know the importance of jewels. Most of the population in Hong Kong is made up of educated people. The high education level in this city increases the demand for jewelry.
The main religious beliefs for the people in Hong Kong are Buddhism, Taoism, and Confucianism. Buddhists do not wear any jewelry but they wear some forms of beads bracelets. Confucianism and Taoism also allow for the use of jewelry. Buddhism reduces the demand for jewelry but the company can focus on the accepted beads by the religion to attract more people. Notwithstanding, most of the people in New York are Christians and these people are not restricted to wear jewelry. Therefore, it means that the demand for jewels will increase. Buddhism is the main religion in Shanghai and the company can only flourish if it makes jewelry accepted in the religion.
However, diamond is the status symbol in the New York community and it manufactures color diamonds. Therefore, many people will purchase the diamonds and this shows that the company’s products are in line with consumer trends and preferences. Pearls are the symbol of status in Chinese culture and the people prefer color diamonds. This is part of the culture of the people of Shanghai and it increases the demand for jewelry production. Jewelry has been part of the culture of the Hong Kong people and that is why the city has the second world largest jewelry auction hub. This increases the demand for jewelry in the city.
Environmental Factors in New York, Shanghai, and Hong Kong
The jewelry industry must work under the strict laws governing the jewelry industry in New York. For instance, the company should not take part in laundering and it should provide a satisfactory anti-money laundering plan that will make it acceptable by the New York government. They must also ensure that they are honest in their activities in the city. Nonetheless, the company must also comply with the positive attitudes that the people have towards the use of renewable energy. Renewable sources of energy are important in such a manner that they help lower the price and demand for natural gas and coal. It also helps protect the consumers especially when there is a spike in the use of fossil fuels. It also helps in reducing pollution. The city also has strict air and water pollution regulations. If it goes against these rules, it must be punished according to the law. The jewelry company must address issues that may arise based on safety, health, and even environmental issues. Similarly, people may feel that the company is not eco- friendly (Ross, 2007). The jewelry mining company may have several negative impacts on the environment to mean that it leads to erosion of land, leakage of harmful chemicals to the nearest water bodies, and it could alter the whole ecosystem. Therefore, this shows that the people of New York City are environmentally conscious and they care a lot about their health. The company can also focus on raw materials recycling. It can recycle waste materials into useful materials that could be important in the jewelry industry. The company should also use environmentally- friendly methods of extracting jewels.
The jewelry industry can only flourish in Shanghai if it is eco- friendly. For instance, the company can embark on a project hereby they recycle some of the items used to make this jewelry and this could help in attracting more people to the company to mean that the people of Shanghai care about their health and they are environmentally conscious just like those in New York. Shanghai has environmental protection laws. There have been comprehensive measures on how to deal with air pollution. Chien Collection must follow the laid out rules. For example, the company must understand that constructing new facilities may have an impact on the atmospheric environment and they can be preceded by assessments of environmental effects and even the standards for emission of atmosphere pollutants (Wong, 2020). It must also follow the total emission control requirements. The method used in the extraction of jewelry must be environmentally friendly from all angles just as if it is in the case of New York. The people of Shanghai know that a healthy environment leads to a healthy lifestyle. The pollutants that may be discharged from the company may lead to a case whereby the people around the company get diseases due to toxic substances and it may affect the company’s employees. The company must also adopt renewable sources of energy such as solar technology, wind power, hydropower, and even nuclear energy. China has massively invested in renewable energy and this has helped in preventing environmental degradation. It can recycle some waste products to make materials that are more helpful in production.
In Hong Kong, there is the APCO (Air Pollution Control Ordinance) and it is the main law that regulates air quality. APCO imposes emission controls and it sets air quality objectives for the people. Nonetheless, the EPD (Emission Protection Department) is responsible for enforcing the Air Pollution Control Ordinance and it has been given the power to control emissions for commercial, construction, and even industrial works. Chein’s collection must ensure that it follows the laid out APCO Laws. If it fails to adhere to these rules, the company faces a great risk of closure or even being sued for endangering the lives of the people. The industry may use renewable sources of energy in Hong Kong just as it would do in New York and Shanghai. The city has excellent potential for wind, solar, and even waste- to energy. However, the main issue in Hong Kong has been that renewable energy has been lagging and it remains to be a negligible player in the energy system (Salmela & Vimm, 2018). The jewelry industry can attract more customers and investors by adopting the use of renewable sources of energy. Asides from that, Hong Kong people are also environmentally conscious. Even though the city has miraculously developed economically, there has been a deterioration of the environment. The people are aware that these environmental problems are serious and they lead to problems based on waste disposal and air pollution. Therefore, the industry must attract Hong Kong investors and customers if it takes part in eco- friendly activities and if it aims at protecting the environment instead of destroying it.
References
Adamkasi. (2017, June 15). Pestle analysis of gems and jewelry. Free PESTEL Analysis. https://freepestelanalysis.com/pestle-analysis-of-gems-and-jewelry/
Kingold Jewelry, Inc. PESTEL / PEST & environment Analysis[Strategy]. (n.d.). Fern Fort University. https://fernfortuniversity.com/term-papers/pestel/nyse4/255-kingold-jewelry–inc-.php
Ross, K. (2007). Diamond and jewelry industry crime. PsycEXTRA Dataset. https://doi.org/10.1037/e601072007-006
Salmela, E., & Vimm, I. (2018). Digital smart jewelry: Next revolution of the jewelry industry? Digital Transformation in Smart Manufacturing. https://doi.org/10.5772/intechopen.71705
Wong, W. S. (2020). Contemporary jewelry design in Hong Kong. Encyclopedia of Asian Design. https://doi.org/10.5040/9781350063488.ch-037