A new way of doing business

With a population of more than 1.3 billion people, China’s market potential is significant; foreign companies are continually trying to find ways to sell their products there. For many jewellery factories in China, it also means a new way of doing business. They are no longer afraid to raise their prices to cover additional costs when needed. And they are changing their business model from being exclusively export-driven to one that includes domestic growth. By diversifying their markets, they can be better equipped to handle the ups and downs of a turbulent economy.

Today, Chinese consumers are better able to afford jewellery, especially young shoppers, who are willing to pay higher prices for more modern and innovative designs. As such, jewellery factories are now investing in research and development. China has a highly skilled workforce that is developing new computer-assisted design (CAD) programs and machinery, as well as advanced forms of production (e.g. setting stones with a microscope). Updated casting techniques and automation have further reduced labour costs. Design, workmanship, and quality control are all improving at a rapid rate.

As such, Canadians can expect to see new and better products in the bridal, diamond, gold, platinum, and silver categories, along with higher prices. However, this may help eliminate many of the problems concerning lack of quality. In the past, not raising prices meant cutting corners, of which many factories were guilty. In my opinion, I believe Canadians will be willing to pay more for Chinese-made jewellery if design and quality are acceptable. And with the skill and speed Chinese factories possess, other manufacturing centres may find it difficult to compete.

Brand expansion

New Chinese jewellery brands are continually entering the local market. A number of factories I have dealt with have even opened their own retail shops in Chinese malls, combining their export business with local wholesale and retail markets.

I predict in the next few years that Chinese branded jewellery will enter the Canadian market and ‘Made in China’ will be taken seriously. Rather than bringing to mind low-quality goods, the term will reflect top design, meticulous workmanship, and superior-quality jewellery products.

These brands may include Chow Tai Fook, the largest jewellery retailer in the world with 1500 retail outlets in China. Its world revenues are 50 per cent more than that of Tiffany & Co. Others like Luk Fook Holding Co., Chow Sang Sang, and TSL are also poised to make an impact beyond China.

At this point, these brands mainly focus on the Asian market and their jewellery reflects the art and design of that part of the world. However, if they were to branch out into foreign markets, they may decide to incorporate a more Western look in their pieces.

A good example of a Chinese brand doing this now is Qeelin, which has 14 shops—seven in mainland China, four in Hong Kong, and three in Europe. Late last year, French luxury group PPR acquired Qeelin. The brand has a Western esthetic, but also incorporates Chinese charms and symbols into its products.

China has less than 30 years of history manufacturing jewellery for foreign markets. It has experienced the ups and downs of the marketplace and made some mistakes along the way. However, it has survived and is on a learning curve that appears to be heading upward. In the coming years, I predict Canadians will see new innovative designs and high-quality workmanship from jewellery manufactured in China and sold in their local Canadian jewellery store.

Steven Greenwald is owner of Supreme Silver, a Canadian-based wholesale jewellery company located in downtown Toronto, and a partner in Kiki Jewellery Ltd., a manufacturing operation located in China. He has a bachelor of arts from the University of Toronto and graduated in computer science. Soon after, Greenwald developed a passion for jewellery, earning a graduate gemmologist (GG) diploma from the Gemological Institute of America (GIA). He has been in the jewellery business for more than 25 years. Greenwald spends his time travelling between Canada and China, where he lives with his wife and daughter. Greenwald can be contacted via e-mail at steveng@supremesilver.com.