11 March 2008
All You Need Is Carat(HKTDC Jewellery, Vol 01,2008)
Carat Jewellery Ltd
A thriving worldwide export business and the debut of the company's new Elov jewellery brand this year have put a smile on the face of William Ko, founder and Director of Carat Jewellery Ltd.
The premier fine-jewellery manufacturer, renowned for its expertise, creativity, quality, value and professionalism, produces trendsetting, contemporary-styled jewellery for an increasingly demanding and sophisticated international clientele.
Carat Jewellery's Elov brand, which features European styling designed to appeal to the under-40, middle-to-high-income market in Asia, also marks the launch of the company's new retail operations in the region. "The brand is all about love," Mr Ko declares. "It's not just for the wife or husband, but mothers and fathers - everyone in fact."
From an early age, Mr Ko knew that running his own business was what he wanted to do with his life, and he found the jewellery business attractive because of its creative possibilities.
After starting out as a goldsmith at age 18, he switched jobs and worked as a jewellery shop salesman for the next 12 years, always paying close attention to what customers bought and the designs they liked.
Mr Ko put all of this information to good use when he established Carat Jewellery Ltd in 1991, although he and his wife were the only employees of the single retail shop they operated in Hong Kong's Causeway Bay.
Mr Ko was a fan of Buccellati-style jewellery and much of the high-end diamond and precious stone jewellery the couple designed and outsourced to Hong Kong factories was inspired by this dressy, yet delicate Italian style.
"Everyone liked Buccellati designs, but they were very expensive to make," Mr Ko recalls. "So instead of making them by hand, I had them cast and that allowed me to lower the price."
However, because each piece of jewellery needed to be different and production volume was small, sales failed to keep pace with costs.
"The shop rent was expensive and the products were slow to make, so after three years I closed the shop and went into wholesaling," he says. "With retailing, you can only sell so many but wholesaling lets you do much more."
Business grew steadily as Carat Jewellery's export sales focused on Taiwan, leading Mr Ko to hire a handful of sales people and to work with freelance designers, though he and his wife continued to oversee and approve all work. "I'm not good at drawing but I have a concept in mind and I explain that to the designer," he says.
Then disaster struck in 1997 with the Asian financial crisis. "Nobody was buying in Asia, and our sales dropped 50% in one year," Mr Ko reveals, conceding that it was a pivotal time for his company.
However, instead of letting the financial crisis defeat him, he devised a new strategy. "We changed our market to the US and our designs to what Americans wanted," he says.
Mr Ko studied jewellery trends in magazines and spent six months travelling around the US, visiting jewellery retailers in New York, Miami and Los Angeles in order to better understand the market.
The gamble paid off as sales tracked upward year after year, with the most sellable jewellery priced in the US$1,800-3,000 FOB Hong Kong range. "The American market is interesting because there are so many different types of people," he notes. "They tend to like simple, colourful jewellery but in bigger sizes."
Four years ago, Mr Ko added Europe to his export market list, with the result that today Carat's China production facility manufactures about 3,000 pieces per month that are shipped to the US (60%), Europe (30%) and Asia (10%).
He now has his sights set on the retail market in Asia and has opened his first Elov shop in Macau, with five more outlets planned for Hong Kong and China over the next three years.
The Elov brand (love, with the 'e' moved to the front) offers two distinct lines of 18K gold gemset jewellery - a luxury-oriented, Italian-style collection and a simpler everyday range that includes jewellery with star, heart and cross motifs.
Having prospered despite challenges, Mr Ko attributes much of his company's success to his 130-strong team of employees. "I'm lucky to have found the right people," he admits, noting that a jewellery manufacturer needs good sales, design and production staff.
He observes that there's no consistency if customers come to a company and the salespeople are different each time, and says it is the same with craftsmanship. "Choosing our staff carefully and keeping them with us is the most important thing," Mr Ko maintains. "Creativity is also important, not just in design but also in business strategy."
Emphasising value while providing exceptional quality and exquisite designs has been a Carat Jewellery Ltd hallmark from the beginning, but for Mr Ko success is also measured by progress on other fronts. "It's not enough to survive," Mr Ko insists. "You need to grow - you can't stand still."
TEXT BY ANDREA PAWLYNA
Carat Jewellery Ltd