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BIG AND POPULAR(HKTDC Jewellery, Vol 01,1998)


Vol.1 1998




BIG AND POPULAR
Henry Jewellery Mfr Co

OPALS ABOUND
Opal House Ltd

MAKING THE RIGHT MOVE
Polaris Arts & Crafts Jewelry Ltd

AFFORDABILITY THE KEY
Sun Tak Hop Jewellery Fty Ltd

BIG AND POPULAR
Henry Jewellery Mfr Co

HENRY Jewellery Mfr Co is best known for its competitively priced "big look" jewellery. "We make our jewellery as light as possible, about 0.5-millimetre, so the pieces do not weigh as much," says company founder Henry Lam. "If a factory uses five grams of gold to make a piece of jewellery, we can do it with four grams."

The company manufactures about 30,000 pieces of cast jewellery per month, most being two- and three-piece sets that sell for US$250-500 FOB Hong Kong.

Styles are casual and European-inspired, with 70% of exports destined for the US and Europe, and the remainder going to Asian countries such as Malaysia and Singapore.

Lam was able to put a lifelong love of drawing to good use designing his own jewellery. After working as a salesman for a jewellery company, he decided 12 years ago to go into business for himself.

He sketched some designs and gave them to a subcontractor to produce. Then he travelled the world showing his samples to customers. "That's how I started building my business. It grew little by little," he says.

From less than six employees during the firm's first year of operation, the number has grown to 260 at the company's factory in Panyu, mainland China, with another 60 in Hong Kong producing master samples.

Henry Jewellery specialises in 14K and 18K gold jewellery, most with round melée diamonds from five to 30 points.

"Three years ago, less than 10% of our sales were white gold, but now they are about 50%. Two-thirds of that is white gold only and the rest is two-tone white and yellow gold," he says. Platinum accounts for 1-2% of sales.

The company focuses on two main lines — one aimed at 25- to 30-year-old career women in the US and priced from US$50 to US$400 FOB Hong Kong per piece, and a younger line for 20- to 25-year-old Asian women at US$100-250 per piece. "Women in the US look at the design first, while Asian women are interested in both design and quality," Lam says.

Designs sold in the West do best if "the piece looks big for the price", while the line for Asian women features "small details that bring out the quality of the stone", he adds.

A third line of semi-handmade goods priced from US$5,000 to US$50,000 features more dramatic styling and bigger stones. "This is a special line for customers in Asia and the Middle East who want big sets. We use precious stones and diamonds and 18K gold," he says.

Lam says the next step for his company will be the production of electroformed rings and earrings. "We hope to have all the machinery installed and start producing by the end of 1998. With electroforming, we can make really big, lightweight pieces. What would normally weigh five grams would only weigh two grams with electroforming," he explains, noting that such pieces would cost 40-45% less.


"The pieces will be colourful and set in 14K gold. We will use diamonds and semiprecious stones — amethyst, citrine, blue topaz and peridot," he says.

Initially, he plans to stick to geometric designs for electroformed items because of their "modern, clean look". The pieces would be priced from US$35 to US$60.

Another project in the works is computer-aided design (CAD) and model-making. Lam, who still designs part-time, is hoping that the use of CAD will help his team of six designers turn out work faster. At present, they produce 120 designs per month. With CAD, he is looking to quintuple that amount.

"It takes a day to produce three to five master samples, but with CAD we can do 30 designs in 10 hours. CAD will cut down on the model-making time and it will allow my designers to make modifications more easily," Lam says.

He feels that CAD will help his company remain competitive in a fast-changing market. "People don't want to keep the same things in stock for a year. Retailers want to promote new items for every gift-giving occasion."

However, customer service, price, quality and on-time delivery are equally important factors. "We deliver in 30 days sharp," Lam points out. Minimum order is six pieces per style.

Written by Andrea Pawlyna


OPALS ABOUND
Opal House Ltd

WHILE more than 95% of the world's finest opals are found in Australia, it is in Hong Kong that the majority of white opals are cut and polished. It was working as one of many young opal cutters, working to reveal the colourful nature of this gemstone, an amorphous non-crystalline form of hydrated silica, that gave Patrick Cheng his start in the jewellery business in Hong Kong. In 1969 he founded his own company, Opal House Ltd.

Cheng started in the opal business as did many of his contemporaries, cutting white opal rough supplied by visiting Australian dealers for export back to Australia and to the US. Now, Opal House is one of the world's major suppliers of its own opal jewellery and watches, with offices in Hong Kong, Australia and the US.

Shortly after establishing the company Patrick married, and his wife joined him in the business, bringing with her valuable experience from another opal company and the husband-and-wife team set out to build the business.

Almost 30 years later, Opal House employs more than 250 people worldwide, including more than 200 in two factories in mainland China — one in Shenzhen for opal cutting and one in Panyu for jewellery manufacturing.

Adding a line of manufactured jewellery was the company's major move in 1979. Today, 70% of production is opal jewellery and watches, while the remainder is loose-cut opals. Up to 8,000 pieces are produced each month.

"Our production ranges from jewellery priced at US$8-15,000 FOB Hong Kong," says executive director Anna Cheng. "Best-selling items are earrings and pearl enhancers priced at US$20-500."

No two opal stones are ever the same and the stone's mysterious colours and similarity to a living flame in the highest qualities make it a highly prized gemstone. However, for some people it holds only partial appeal and is a gem that satisfies only certain segments of the jewellery buying public. "Many customers come to us liking what we do and ask us to make them diamond or coloured gemstone pieces. But we are an opal jewellery manufacturer, that is our speciality and our niche in the market," says Cheng.

All production is exported, with the majority going to the US, a market that has shown the biggest increases recently and Cheng reckons this will continue through 1998. "The economy is stable and people are starting to buy more opal jewellery," she says.

A lot of the loose opals and opal jewellery return to their origin and are sold in Australia, often in mining towns such as Coober Pedy and Andamooka in South Australia. This is helped by Australia's naming of opal as the national gemstone and the promotions made to tourists to buy one of Australia's treasures while they visit the country.

Opal House has had a sales office in Sydney, Opals Australia Pty Ltd, since 1978. The company also has a sales office in Los Angeles.

As well as white opal products, Opal House manufactures pieces featuring boulder opal doublets. According to Cheng, demand for boulder opal doublets is strong, especially as they retain the beauty of a natural boulder opal at a more affordable price.

Cheng 's approach to marketing is simple, yet effective. Direct contact with sales agents, regular attendance at important international trade fairs and detailed analysis of market and customer information help the firm stay ahead of the competition.

"Our business advantages keep us growing. Opal House has a big choice of products to fit various market needs. We have competitive prices and prompt and reliable after-sales service. Opal House also concentrates on innovative and regular new designs," Cheng says.

Written by Johnny Edison


MAKING THE RIGHT MOVE
Polaris Arts & Crafts Jewelry Ltd

IN 1980, when ivory carving was still an important export from Hong Kong, four enterprising business partners founded Polaris Arts & Crafts Jewelry Ltd to manufacture ivory jewellery.

According to Dennis Ng, one of the initial founders and now general manager, fine jewellery featuring precious metals and gemstones was added to the range in 1985. "We could see more potential and an ability to create a wider range of products as a fine jewellery manufacturer, rather than by manufacturing just with one material, ivory," he says.

As well as pragmatic business concerns, animal rights concerns were an issue for Ng, and his production shift proved to be a wise move because the Hong Kong Government banned the export of ivory products in 1989.

Since then, Polaris has dropped all of its ivory products and has become a major manufacturer and exporter of fine jewellery, primarily 14K gold items exported to the US.

"Our production ranges from 10K, 14K and 18K white and yellow gold pieces set with diamonds and coloured stones, priced from US$10-5,000 FOB Hong Kong," says Ng. The lower-priced items are often 10K gold pieces for special customer orders. Polaris accepts orders in platinum 900 and 925 sterling silver, according to customer request, but gold is the company's speciality.

"More than 70% of our jewellery is 14K gold set with diamonds, and this has been our best-seller for two years. Before that we were mainly using cheaper coloured gemstones such as amethyst and topaz," Ng says.

Market demand, especially from the US, is for ring and earring sets priced at US$300-400. "This makes up the bulk of our production and this will remain the same through 1998. After that, we will analyse the market again and change according to demand," says Ng.

Polaris constantly keeps track of market demand, enabling it to satisfy its customers, which include some large US retail chains. Taking requests from customers and creating new lines of jewellery is all part of the Polaris service.

"White gold jewellery is especially popular in the US right now. We responded to requests from our customers and now about 15% of our production is in white gold," says Ng. Many customers, especially the larger ones, request exclusive designs from Polaris. "We regularly change our collections and try to respond to any customer request," says Ng.

Because 65% of production is exported to the US, Polaris is a frequent exhibitor at major international trade fairs in Las Vegas, Orlando and New York. As well as servicing existing and potential clients in North America through attending these fairs, Ng finds the fairs to be an important meeting place for customers from new markets.

"We have started to see more inquiries from South America at the US trade fairs recently, and I can see that being a good market for the future," he says. Polaris also attends all international trade fairs in Hong Kong.

All production takes place in Panyu, mainland China, with a workforce of about 200 turning out 14,000 pieces a month, of which 80% is cast and 20% handmade. Samples are made in the small production facility in Hong Kong, which is primarily an office for 30 management, sales and accounting staff.

Ng, who is vice-chairman of the Hong Kong Jewelry Mfrs Assn and the Panyu Jewelry Assn, says: "Our high quality, fast delivery, efficient service and emphasis on design all help us in our business aims."

Written by Johnny Edison


AFFORDABILITY THE KEY
Sun Tak Hop Jewellery Fty Ltd

FAMILY-OWNED Sun Tak Hop Jewellery Fty Ltd was established in 1980 by Tsui Wah-nam and his three brothers, all of whom are jewellery craftsmen.

The company has built its reputation on producing affordably priced diamond jewellery that meets the family's stringent quality standards. Prices range from HK$500 to HK$20,000 FOB Hong Kong per piece.

"We make the full range of jewellery items. Our designs are simple and fashionable," says general manager Woo Lai-mei, who joined the firm nine years ago.

The 12 craftsmen at Sun Tak Hop's workshop turn out about 2,000 pieces per month, about half of them cast. "The rest are handmade," Woo says. About 90% of production is 18K gold and the rest is platinum 900.

"We get a lot of orders for white gold, which is about 65% of our gold production. All of our customers keep asking for it. We think it will continue to be popular next year and we may increase our production to 80%," Woo says.

The company focuses on Japanese-style designs because most of its exports are concentrated in Asia. About 30% of the company's sales are in Thailand, 20% in mainland China, 20% in Hong Kong, with the bulk of the rest in Singapore, Dubai and Malaysia. "The US and the UK only account for 2-3%," Woo says.

Its two lines of jewellery are designed with 17 to 60-year-old women in mind. A lower-priced collection for younger women accounts for 70% of sales. Items in that line tend to sell for about HK$500-3,000. "We use small, single stones for the lower-priced line. Items HK$5,000 and over have several stones," she says.

Minimum order is 12 pieces, with delivery in one week. Discounts are offered for orders of more than 30 pieces.

Until a year or two ago, diamond jewellery was Sun Tak Hop's sole product. "But some customers kept asking for coloured stone jewellery, so we began adding pieces with sapphires, emeralds and rubies," Woo explains.

The size of diamonds and precious stones generally ranges from 10 to 50 points. Diamonds are typically VS to SI in clarity and E to J in colour. "We use both round and fancy cuts. Heart shapes and princess cuts are becoming more popular," she says.

The company's best-selling item is an 18K white gold ring, priced from HK$2,000 to HK$3,000, set with a 20-point solitaire diamond. Settings run the gamut — from prong to channel to bezel.

About 50% of Sun Tak Hop's designs are produced in-house, with the remainder supplied by customers. "We want to increase the number of our own designs in the future," Woo says. The company has one designer and, according to Woo, the use of CAD/CAM equipment for design purposes is under consideration.

Future plans call for further development of the company's market in Dubai. "The market is good and there is not as much competition," she notes, adding that the firm hopes to participate in jewellery exhibitions in Dubai.

The company also hopes to begin experimenting with larger gems next year. "We want to use more 30-80-point stones as well as increase the amount of our handmade jewellery," Woo adds.

She chalks up Sun Tak Hop's success to both its quality consciousness and pricing strategy. The company's sales policy, she feels, is another factor. "We do not send out salesmen to sell our products. I sell to customers in my office. In this way, all of my customers become my friend," she says.

Written by Andrea Pawlyna

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