Carving out love stories with a sparkle
For new couples or lovers, choosing a diamond ring in a traditional jewelry shop is normally something that’s sweet and romantic. But, sometimes, it can be frustrating.
Except for selecting one that barely meets their taste, there’s not much choice. Moreover, they would have to wait for more than a month to get the item delivered to them.
“Compared with past generations, young people nowadays care more about shopping experience and have higher consumption demand,” says Pan Haiquan, chief executive officer of Shenzhen Doido Networking Technology Co Ltd — an e-commerce company focusing on the design, production and sales of customized jewelry.
“Instead of forking out thousands of or tens of thousands of yuan on a common diamond ring, they would now prefer a personalized one that fits their own style or one that has their love story integrated in it.”
Vie wing it as a way of upgrading consumption, Pan believes it’s necessary to take advantage of internet technology to boost the jewelry business.
He thus developed an online platform that offers customized services to jewelry lovers based on their demand and preferences.
“When clients see a lovely diamond ring in a journal or being worn by friends, they can simply take a picture of it and transmit it to us. They can also tell us what they think of the design. We will immediately work out the price based on their requirements and send them the original design sketch in a few days,” says Pan.
“The most important thing is that customers can participate in the process.”
The system, which links customers, designers and factories, also plays a role in cutting production time significantly — from more than a month to 10 days.
Last year, Shenzhen Doido won the “national high-tech enterprise” honor and was listed on the New Third Board — the Chinese mainland’s share transfer system for small and medium-sized enterprises — becoming the first e-commerce company in the jewelry trade to float on the board.
For decades, jewelers have adopted the traditional model of setting up as many physical shops as possible as their strategy for expansion.
The old development model has led to large inventory and heavy financial burdens that are unsustainable for the sector’s long-term growth, argues Pan.
The situation is even more worrying at a time when the industr y is experiencing a chilling “winter” amid a softening mainland economy and intensifying market competition.
“Jewelry items in traditional shops are usually selected by shop owners based on their experience and market expectations. However, their judgment could sometimes be wrong and that would lead to huge economic losses,” warns the 46-year-old entrepreneur.
“With the new system, we’re able to produce the items according to real demand, which is more effective and less risky.”
According to the World Gold Council, demand for jewelry on the mainland fell by 17 percent year-on-year to 629 tons in 2016.
Leading Hong Kong jeweler Chow Tai Fook has seen its operating revenue on the wane for the past three years. The chain reported a 23.46-percent year-on-year decline in interim operating revenue for the 201617 year.
Chow Sang Sang — another prominent Hong Kong jeweler — saw its revenue slip 16 per-
chief executive officer of Shenzhen Doido Networking Technology Co Ltd cent year-on-year in the first half of 2016, with profit plummeting 50 percent.
An experienced industr y insider, Pan is among the first group of people in the industry to try out transforming from a traditional jeweler to one that bases his business on the internet.
He entered the trade in 1993, doing jewelry processing, wholesale and retail business in Shenzhen. When the global financial crisis erupted in 2008, he made active changes rather than waiting passively for the upcoming decline in business brought by the economic downturn.
“I thought it would be a good way to embark on e-commerce business,” he says.
“But, it’s very hard to make a successful transformation for a jewelry enterprise. People have been accustomed to the traditional way of going to a physical shop to make purchases because of the high value of jewelry. They aren’t willing to buy them online. A number of businesses that made the first move have failed in the process and only a few have survived.”
Zheng Wenhong , deputy head of the Shenzhen Jewelry Designers Association, says more traditional jewelers have turned to e-commerce in the past few years, but the result hasn’t been satisfying.
“The level of trust among consumers in buying jewelry online is still low. Moreover, the cost of online promotion is high,” he points out.
Industry insiders, however, still believe that integration with the internet is an inevitable trend for the jewelry trade.
According to a report by the Shenzhen-based Q ianzhan Industry Research Institute, online promotion will be one of the key factors in the development of jewelry enterprises.
T he mainland ’s massive internet market will continue to drive the growth of the jewelry industry, it says.
With the new system, we’re able to produce the items according to real demand, which is more effective and less risky.”