JEW­ELRY IN­DUS­TRY HAS GLIT­TER­ING PROSPECTS

Multi-brand out­let of­fers Chi­nese con­sumers ac­ces­sories with a touch of style

China Daily (Hong Kong) - - BUSINESS - By WANG YING in Shang­hai wang_y­ing@chi­nadaily.com.cn

Glit­ter­ing la­dy­bird mo­tif items, and in­tri­cate neck­laces and ear­rings, are just part of the branded jew­elry trend that has swept across China.

Au­then­tic and artis­tic pieces tend to en­tice dis­cern­ing shop­pers in an in­dus­try which is ma­tur­ing as well as ex­pand­ing.

A re­port from the China In­dus­try De­vel­op­ment and Re­search web­site showed the jew­elry and pre­cious metal ac­ces­sory mar­ket snow­balled from 121.7 bil­lion yuan ($18.5 bil­lion) in 2004 to 499 bil­lion yuan last year.

To cater for ris­ing de­mand, new stores are sprout­ing up such as One Jew­elry, which opened in Septem­ber.

This tra­di­tional out­let un­veiled a col­lec­tion of 12 in­ter­na­tional brands, such as Facco and Carla Amorim, in Shang­hai’s Su­per Brand shop­ping mall in Lu­ji­azui, part of the city’s Pudong New Area.

Al­ready Li Jun, founder and chair­man of the com­pany, is plan­ning to de­velop the busi- ness into an ac­ces­sory chain on the lines of I.T, the fash­ion ap­parel gi­ant in Hong Kong.

“Just like I.T, we plan to fea­ture a unique, multi-brand and multi-layer busi­ness model that gath­ers many in-house and li­censed global brands,” Li said.

“A sec­ond store with a col­lec­tion of more than 20 la­bels will be opened in a shop­ping mall in south­east Shang­hai within the year, and the com­bi­na­tion will be ad­justed, ac­cord­ing to the feed­back of our con­sumers,” he added.

By sell­ing multi-brand jew­elry in brick-and-mor­tar stores, the com­pany is tar­get­ing China’s young mid­dle class pro­fes­sion­als who de­mand qual­ity and di­ver­sity.

Many have trav­eled out­side the coun­try and have de­vel­oped a pas­sion for beau­ti­fully crafted pieces.

“Chi­nese peo­ple spend bil­lions of dol­lars on over­seas trips ev­ery year, among which about 40 per­cent goes on ac­ces­sories, in­clud­ing jew­elry and watches,” Li said. “That opens a 600 bil­lion yuan mar­ket for the re­lated busi­ness sec­tor here.”

In Deloitte’s Global Pow­ers of Lux­ury Goods 2017, the re­port high­lighted the sig­nif­i­cant re­gional price dis­par­i­ties within the in­dus­try.

BenchMar­que re­vealed that US dol­lar-ad­justed prices for equiv­a­lent items are on av­er­age more than 50 per­cent higher in China than in Italy and France.

Nat­u­rally, this pre­sents an op­por­tu­nity for trav­el­ers from Asia, and main­tains the pre-em­i­nence of the home mar­kets as­so­ci­ated with Euro­pean brands, the re­port stated.

Li plans to change that by sell­ing prod­ucts in China at the same price as in their coun­tries of ori­gin.

“By low­er­ing gross profit mar­gins and spe­cial of­fer­ings from the brands, One Jew­elry aims to sell the same items at the same price as in home mar­kets such as the United States or Europe,” he said.

Dur­ing the past few months, busi­ness has been brisk at One Jew­elry’s bou­tique store in Shang­hai.

Re­tail sales have been en­cour­ag­ing with the av­er­age age of cus­tomers be­tween 25 and 40.

“The most pop­u­lar prod­ucts are those hav­ing unique de­signs with a good back­ground story,” said Lyu Jing­wei, man­ager at the store.

Ital­ian la­bel Facco is one of the fa­vorites with shop­pers.

The com­pany has been around for nearly 50 years with its col­lec­tion of in­tri­cate de­signs and crafts­man­ship.

Its sig­na­ture la­dy­bird mo­tif items are pop­u­lar in Europe, as well as in South Korea, due to their tiny, col­or­ful ap­pear­ance.

“Ital­ian women love jew­elry, but China is go­ing to be more im­por­tant con­sid­er­ing its greater po­ten­tial,” said Gil­berto Facco, the com­pany’s chief ex­ec­u­tive of­fi­cer.

La­dy­bird items come in eight dif­fer­ent col­ors and rep­re­sent dif­fer­ent emo­tions or as­pects of so­ci­ety.

Red, for ex­am­ple, is for pas­sion, while yel­low is for free­dom. Black tends to rep­re­sent el­e­gance, white for wis­dom and green for har­mony, Facco pointed out.

Red la­dy­birds, a best­seller in Italy, have also be­come ex­tremely pop­u­lar here.

“By en­ter­ing China via Shang­hai, we ex­pect to ex­pand quickly in the coun­try and have a good mar­ket share,” Facco said.

Data re­leased by Euromon­i­tor In­ter­na­tional showed that rev­enue for re­tail­ers deal­ing in per­sonal ac­ces­sories in China jumped from 780.59 bil­lion yuan in 2013 to 874.06 bil­lion yuan last year.

In the next five years, the mar­ket in­tel­li­gence com­pany pre­dicted the sec­tor will con­tinue to ex­pand from 915.33 bil­lion yuan in 2017 to 1.11 tril­lion yuan in 2022.

“For the Chi­nese main­land, spend­ing has been lower,” the Global Pow­ers of Lux­ury Goods 2017 re­port stated. “But de­mand re­mains steady among the mid­dle class as they con­tinue to buy bet­ter qual­ity prod­ucts and show­case their so­cial sta­tus.”

... One Jew­elry aims to sell the same items at the same price as in home mar­kets such as the United States or Europe.”

Li Jun,

XIN­HUA

Cus­tomers try on jew­elry in a Hera Mo­ment store. The Bei­jing-based com­pany makes cus­tom ac­ces­sories.

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