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APPLYING THE POLISH (HKTDC Jewellery, Vol 02,1998)



Vol.2 1998




APPLYING THE POLISH
- Hoiman Gems & Jewellery Co

IN ESSENCE
- Kai-Yin Lo Ltd

QUALITY ON A GRAND SCALE
- Legrand Jewellery (Mfg) Co Ltd

SILVER SUCCESS
- Yan Wa Jewellery Co

APPLYING THE POLISH
Hoiman Gems & Jewellery Co

FORMER stone cutter and polisher Gene Chan decided 20 years ago that it was time to leave his job and start his own business. The result was Hoiman Gems & Jewelry Co, a tight-knit family firm that specialises in wholesaling strands of turquoise, lapis lazuli and azurite.

"We buy the rough, then cut and polish the stones," says Chan, whose wife and daughter handle orders and administration at the company's main office in Kowloon. The firm's factory in Shenzhen, mainland China, has a workforce of 80 producing 500 kilograms of finished strands per month.

Turquoise strands account for 70% of sales, with lapis and azurite the rest. "We carry mostly commercial grade turquoise- AA, A, and B," says Chan. Lapis and azurite are also sold in commercial grades. Sizes range from 4-12 millimetres.

Strands are priced from US$2.50 to US$51 FOB Hong Kong each and produced in 40-50 different shapes, including beads, buttons, ovals, cabochons, nuggets, rice-shapes, stars and squares. On one wall in the company's office is a rack of strands showing the full breadth of Hoiman's samples. "The best sellers have not changed. They have always been the round beads, cabochons, buttons and ovals," Chan maintains.

Loose stones are sold by the kilogram for US$25-70. The company also makes smaller pieces- from 3x5 millimetres to 30x40 millimetres, for use in rings. "We make these in many different shapes," says Chan. Prices range from US$0.70 to US$10 per piece.

Hoiman buys turquoise from the mainland and sources rough lapis and azurite overseas. The company is known for its "stabilised" products, a treatment that improves the appearance and durability of gemstones. Another product is pressed turquoise, which accounts for about 30% of sales. Some dyed turquoise is available.

"We also sell natural, untreated products," Chan adds. Colourful, pretty mosaics in the shape of butterflies and hearts- made by fitting and gluing together stones such as malachite, lapis, turquoise, coral and sugilite- have been popular since the company introduced them 10 years ago.

Chan and his family decide on the design before submitting it to the mainland factory for production. "It's a very labour intensive process, but demand has been growing, especially in the US. We sell 50 kilograms a month. They can be strung on strands for necklaces or bracelets," Chan says. The mosaics can be bought in sizes of 5x7 millimetres to 13x18 millimetres at US$0.40-0.70 each.

The firm can make jewellery to buyers' requests. "We use sterling silver, or 14K or 18K gold settings," he notes, adding that the firm does little of this because most customers are jewellery manufacturers who buy the stones to make their own jewellery.

Virtually all production is exported to the US, Europe, the Middle East and Asian countries, such as Japan. On sales this year, Chan says, "So far, so good." He says sales in Asia have experienced a slight dip, and blames this on the financial crisis, which has gripped the region for more than a year. "Things have slowed down, but Asia is not an important market for us," he says.

Plans call for expanding into coral and other stones, and further developing the European market, Chan says.

Written by Andrea Pawlyna


IN ESSENCE
Kai-Yin Lo Ltd

FOR Kai-Yin Lo, designer and managing director of Kai-Yin Lo Ltd, the essence of jewellery is wearability. That concept applies to her stylish gold vermeil jewellery line set with semiprecious stones through to her more upmarket range of 18K gold jewellery featuring semiprecious or precious gemstones.

Lo, a former public relations executive, turned to jewellery making full-time in 1979. Her baptism came earlier during a stint working in New York when she walked into Cartier's on Fifth Avenue to see if she could sell the designs she had been making for friends.

The buyer turned them down, but he was interested in the antique jade pieces she was wearing. She later sketched designs for a 32-piece collection, all of which the buyer accepted.

Lo established herself as a force in the "bridge" category between precious and costume jewellery with her signature 18K gold vermeil Lumia line, a blending of semiprecious stones. New collections to the 30-piece line are introduced twice a year. Prices range from US$50 to US$150 FOB Hong Kong per piece.

Sensing the potential in higher-end jewellery, especially in Asia, she launched The Gold line in 1993- a 50-60-piece collection, renewed yearly, of 18K gemset creations. Today, it accounts for 50% of the company's sales.

"We use mostly diamonds and pearls- Chinese pearls, mabe, and South Sea- in what I call imaginative, classical ways," Lo says. Prices are from US$150 to US$3,000, with the most saleable at about US$700-800.

Last year, she designed a 40-piece Nature Collection of pins, pendants, earring and rings for the World Wide Fund for Nature. The collection features flowers, starfish, dolphins and pandas in sterling silver, 18K gold and fei tsui, or Imperial green, jadeite. Prices range from US$60 to US$400 per piece for the sterling silver items, US$100 to US$2,000 for 18K gold, and US$2,000 and up for jade.

The company still sells, on a limited basis, the collection that got Lo started, her Traditional line of antique pieces, often interfused with modern elements, strung on knotted silk ropes. Prices for these start at US$200.

During the 1980s, the company's primary market was the US. But over the past five years, Lo has shifted more to Asia. "There were a lot of complications in the US market beginning in 1993, with the economic downturn, and Japan was starting to grow," she explains.

Her designs reflect that change. "Asians like smaller, lighter, daintier jewellery," she says, adding that she does less inlaying and the overall look is simpler. Although she maintains her jewellery is for daywear, The Gold line is dressier than earlier collections.

Consumer taste in gemstones has evolved, too. "The no-colour look is in. Moonstone is a big favourite, so is smoky quartz. Amethyst is out and lapis [lazuli] used to be popular in Japan, but not now."

Her company produces 1,000 pieces per month at facilities in Hong Kong and in mainland China. "We do the jadeite pieces and the more complicated stone setting in Hong Kong. The gold casting and all the silver jewellery is done in [mainland] China."

Other markets are Thailand, Singapore and South Korea. Exports account for 60% of sales, with the rest sold in Hong Kong at her three retail shops.

The company became a wholly owned subsidiary of Hong Kong-based watchmaker and jewellery maker Egana Int'l (Holdings) Ltd in 1994. "Because Egana is very strong in Germany, we are looking at that country," Lo says. She may also take a second look at the US, but it will have "to be in a well-channelled way".

Other avenues of development include branching out into fashion accessories, and stepping up direct marketing and television sales. "I'd also like to get into more expensive pieces where I can indulge myself," she says.

Written by Andrea Pawlyna


QUALITY ON A GRAND SCALE
Legrand Jewellery (Mfg) Co Ltd

THE downturn in Asian economies is affecting exports to these markets, but maintaining a positive attitude can create opportunities during difficult economic times, according to Patrick To, assistant managing director of Legrand Jewellery (Mfg) Co Ltd.

"Japan is our major market and accounts for 30% of our exports at the moment. The country has a large population and, despite the economic downturn, the business is still there. Many companies have stopped doing business in Japan, but we have to understand the needs of the market and then orders will follow," says To.

Legrand has been manufacturing fine jewellery in Hong Kong since 1982 and was founded by To's brother and managing director Sammy To. "He had experience in the retail industry and his goal was to make more high-end items to avoid competition among manufacturers of commercial quality jewellery," says To.

The company manufactures almost any type of jewellery according to customer requirements, but specialises in 18K gold and platinum gemset items priced from US$300 to US$30,000 FOB Hong Kong.

"Right now the most saleable items are in the US$1,000 range. All types of white 18K gold diamond jewellery using G-H colour, VVS clarity diamonds with a total weight of less than one carat are popular," states To.

Design and quality are the emphasis for jewellery at this end of the market and this is true for Legrand's pieces, even with the cheaper items. Production mainly takes place in Hong Kong, especially the handmade items, some difficult stone setting and finishing. The rest is sub-contracted to factories in mainland China specialising in high-end manufacturing. An average of 800 pieces of jewellery are produced this way each month.

"In [mainland] China, the experience of the workers is the issue. If they have not seen fine-quality workmanship, they cannot know how to do it themselves," says To.

"The quality is improving all the time, though, and we have to remember that Hong Kong's jewellery manufacturing industry started from nothing."

In 1994 Legrand designers won the De Beers-organised Diamonds International Awards design competition for earrings resembling Chinese firecrackers set with white and fancy coloured diamonds symbolising explosions. This gave the company excellent publicity but not as much business as To had hoped for. However, it stressed the quality of Legrand's designs and workmanship.

"Our handmade [to] order business is very important now. We see many more orders for unique items compared with customers ordering from our samples," says To. This is good for the company because it reduces the need to carry large quantities of stock, and craftsmen are kept busy doing what they do best.

He is optimistic about the immediate future even with the slowdown in business. "We will have to work harder but we know what to concentrate on. Better service to our customers is important because our business depends on them. One-to-one service is our strength and that is our key to success. We will also aim to maintain quality and competitive prices," he says.

In the longer term, Hong Kong will continue to be the focus for the company's operations. "Hong Kong has a very professional jewellery industry with many committed companies. The business of manufacturing high-end jewellery is unique. You need money, manpower and the necessary skills. Hong Kong has all three, whereas some other countries are lacking in certain aspects. We see some competition now from Thailand and, in the future, maybe from India. But we are confident in our future in Hong Kong," says To.

Written by Johnny Edison


SILVER SUCCESS
Yan Wa Jewellery Co

AS well as being famous for producing successful Hong Kong business people, Chiu Chow- in southern mainland China- is renowned for its silver industry.

Like Switzerland's association with watches, Chiu Chow has been linked with silver craftsmanship since the Ching Dynasty, according to Lee Kwong-chi, managing director of Yan Wa Jewellery Co, one of Hong Kong's largest silver jewellery manufacturers.

Lee came to Hong Kong in 1977 and established Yan Wa in 1983. The company has grown rapidly and now has a factory in Guangdong, on the mainland, where 200 workers manufacture up to 300,000 pieces of jewellery per month for export. Items include a full range of sterling silver jewellery, especially chains and pieces set with cubic zirconia.

Lee says the company also manufactures some 14K gold items, some set with semiprecious gemstones. Prices range from US$0.30 to US$0.80 per gram for silver chains, and US$2.50-23 per piece for items set with cubic zirconia.

"Right now, silver pendants set with cubic zirconia priced at US$3.60 are most saleable in the market. The most fashionable designs are those with rhodium plating and satin finish," says Lee.

Keeping up with trends is important for Lee because Yan Wa's products are aimed at 16- to 35-year-old women who crave fashionable designs. The company scrutinises fashion magazines and attends all major trade shows in Hong Kong, not just for sales, but for research.

There are always many designs for customers to choose from, ranging from antique-look pendants to sleek modern rings. As well as a wide selection, Lee stresses two other business philosophies that have helped growth.

Quality, despite the low cost of the product, must always be adhered to, according to Lee. "When customers compare our jewellery to our competitor's they always come back to us to order. Also, our delivery is reliable. We stick to our schedules and if we confirm a price with the customer and the price of silver goes up by less than 5%, we will not charge the customer more. This stability in our price structure helps the customer and they respect this," Lee says.

It is fluctuations in demand that are of more concern for the jewellery industry, and these have been seen especially through the four retail outlets Yan Wa has in Hong Kong, the first of which was opened in 1986. The stores sell a full range of fine jewellery sourced from local suppliers.

Until 1994, Lee says, Yan Wa's business was equally mixed between retail and export. But since then the export business has eclipsed local market demand and 80% of production is now exported. The US and Taiwan each account for 15% of sales, with Japan and other Asian countries such as Malaysia and Singapore also strong buyers.

Mainland China is the firm's largest single market and one that Lee expects the most from in the future. "China is a big market for us, up to 20% of production, and if the government lifts some of the restrictions imposed on how we sell products manufactured there, it will be a big boost for sales," Lee says.

For now Lee is content to continue developing the business he started 15 years ago. "I came to Hong Kong with two ideas, hard work and faith. Work every day and have faith with the customers to develop a good relationship and help us both build our businesses. It is not an easy job, but I am happy to do it," he says.

Written by Johnny Edison

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