Hong Kong is a renowned Fei Cui trading centre, where the jadeite industry is booming with numerous business opportunities. However, since the jewellery processing base has shifted to Mainland China together with its professionals, in addition to the recent buoyant jewellery market in China, the trade is facing a hidden challenge of contraction. In the recent Hong Kong September Jewellery and Gem Fair, industry professionals and leaders gathered and discussed the current advantages of the local jewellery market, and offer advice on promoting the development of Fei Cui industry.
Mimi Ouyang, chairlady of The Gemmological Association of Hong Kong (GAHK) first emphasized eight competitive advantages of the local jewellery industry, including duty-free, sales tax-free, reasonable prices, advanced information technology, innovative design, exquisite craftsmanship and sound legal system. She elaborated: “In the 1950s, many Fei Cui professionals moved from China to Hong Kong. Their knowledge and experience were passed on to other industry practitioners, establishing a solid foundation of the industry in Hong Kong. The industry therefore got an early start, compared with those in China and Taiwan. In addition, the trade policies help shape a favourable business environment in Hong Kong.” Ouyang stressed that we still see an optimistic future in Fei Cui industry as long as it can capitalize on the eight competitive advantages.
Chan Kwok-man, perpetual president of Hong Kong Jade Association (HKJA), also expressed his opinion on Hong Kong duty-free policy. When raw materials are imported from foreign countries, people will realize that Hong Kong is a duty-free city while the import duty of China reaches 30 percent. Chan said: “Around 7,000 people made transactions at Myanmar Gems Emporium, among which 3,900 were foreign visitors. The total transaction value was recorded approximately 2.6 billion euro (approximately HK$27 billion). Such value would incur more than HK$8 billion of import duty if it is imported to China. Suppose the transactions occur in Hong Kong, companies can be totally free from the heavy tax payment.” It implies that capitalizing this competitive advantage would certainly draw more businesses to Hong Kong.
Besides the trade policy, Hong Kong’s jewellery retail industry also has its attractiveness. Chan pointed out that its advantages are good reputation, quality services and genuine goods at a fair price. In most of the consumers’ eyes, ‘Hong Kong’ itself is a brand. He hoped that the trade would maintain the brand position as a high quality and high value-added city. As a matter of fact, the brand has always fascinated buyers in China. According to Alex Wong, senior manager of Chow Tai Fook Jewellery Company Limited, around 38 million mainland visitors came to Hong Kong this year, up by 8.9 percent year-on-year, among which over 45 percent of visitors spent on jewellery. The per-capita spending of mainland visitors rose from RMB$4,400 in 2004 to RMB$8,600 in 2012. It is also expected that more mainland visitors from the second- to third-tier cities will visit the city, bringing enormous business opportunities to the industry.
Branding can facilitate more rapid growth of the local jewellery industry. To promote Fei Cui industry and save the market from shrinking, is branding culture applicable to the industry? Aaron Shum, president of Aaron Shum Jewelry Ltd expressed his unique idea: “In a seminar, over 60 percent of participants voted for a 1-carat Tiffany & Co diamond and against a 2-carat non-branded diamond. Why can’t we have a brand like Tiffany & Co in Fei Cui industry?” The industry can break the tradition, incorporating branding elements and entrepreneurship culture. He suggested: “The uniqueness of Fei Cui can be interpreted by design, such as an innovative squared bangle instead of a traditional round one. A distinctive product can also be done by engraving with our name or a brand logo. Such features can add value to the jewellery and even double its retail price.” To build a reputable brand, the industry can work on its patent, unique craftsmanship, extraordinary materials, high brand profile, design features and brand logos. A brand can be said reputable only if consumers can distinguish it from others at first sight.
In jewellery processing industry, Chan told us that in order to lower the high production cost, Hong Kong manufacturers had moved their production bases to China in the 90s where large quantities of Fei Cui raw materials were processed. Nowadays, the appreciation of renminbi indirectly narrows the salary gap between China and Hong Kong. In the circumstances, he suggested that manufacturers could relocate their production bases back to Hong Kong and provide training to local workers, facilitating the local industry development in the long term.
When it comes to workers, Ouyang showed her concern on labour shortage, which will hinder the industry growth in the long term. In the 90s, the jewellery processing base has shifted to China with its professionals. Worse still, in the recent 10 years, jewellery sales positions are more preferable than those in design and processing. Both factors result in a shortage of workers in the supply chain. In order to solve the problem and promote the industry, Ouyang suggested that the government should take the initiative to advocate non-mainstream schools providing Fei Cui training to teenagers between 15 and 25. In addition, trade associations are suggested to carry out scholarship schemes, encouraging student learning and raising the local design standards. She believes that all these campaigns could strengthen the industry and consumers’ knowledge and confidence in Fei Cui, facilitating the industry growth in the long term. (Photo courtesy: Tiancheng International)
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