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FRESH TO WEAR (HKTDC Jewellery, Vol 02,1999)

Vol.2 1999

- Fung Yuen Jewellery Co

- New Concept Jewelry Co Ltd

Fung Yuen Jewellery Co

RIDING the wave of Chinese freshwater pearl demand has kept Sze Siu Shan busy since he founded Fung Yuen Jewellery Co in 1985. The increase in quality and quantity of farm production of the multi-shaped, multicoloured and multi-sized pearls has mirrored the growth in demand.

The past two years have been good for Chinese freshwater pearl jewellery companies, according to Sze. "We manufacture jewellery items of low cost and these have been heavily in demand all over the world, especially in the US. The freshwater pearl industry has not been affected by the economic recession in Asia. In fact, we have benefited since customers demand lower-end jewellery now," Sze says.

With years of experience from other companies, Sze established Fung Yuen as a manufacturer and exporter of sterling silver, 14K and 18K gold jewellery sets featuring freshwater pearl strands and half-drilled loose pearls. The company has grown to include a 180-worker factory in Guangdong, mainland China, which produces 20,000 finished pieces a month. Sze also founded a new company, Creative Development Co, in 1997, specialising in silver jewellery.

"Design is always important for us. We constantly assess what is popular in each market. We try to gain an advantage through this and, so far, all our customers are pleased," Sze says.

"We buy direct from the pearl farms and keep a very close control on the product. The quality of management in the factory is very important. We have a very experienced manager who heads all the quality control," he adds.

Fung Yuen always tries to be a step ahead of new fashion trends. The current trend is for potato-shaped pearls priced at US$150-700 FOB Hong Kong, and round-shaped pearls priced at US$800-4,000 per kilogram. The company sells products priced as low as US$40 per kg, but always of acceptable nacre thickness, says Sze.

Markets are mainly the US and Europe, although this year Fung Yuen has seen a 60% increase in business with Japan.

The company offers strands of freshwater pearls in every hue imaginable. Most are treated colours, either dyed or, as is the case with the iridescent black varieties, rhodium-plated.

Sze says natural colour items account for 80% of sales. "Some of my customers, especially those in the fashion jewellery business, don't mind the treatments. The jewellery is cheap so they have no problem. Others want better quality and natural colours. It's all about satisfying different customers with different needs," he says.

Having been in business for almost 15 years, Sze is looking to the future. "Most of all I'd like a gradual increase in our customer base and be able to provide them with better quality pearls at reasonable prices with good service. That's what we are working towards," he says.

Written by Johnny Edison

Fung Yuen Jewellery Co

WITH 25 years' experience in Hong Kong's jewellery industry, George Mak did what many entrepreneurs do -- he set out on his own. He established New Concept Jewelry Co Ltd in 1995 to explore his own ideas.

"As an owner I can do anything I want, creatively speaking. I am a developer. I take an idea and I make it reality. Since starting, I have proved that my ideas are good and I will never regret taking the step," he says.

In a business that relies on creativity and solid knowledge of the marketplace, Mak has succeeded through hard work and unique products. Beginning by concentrating on the saturated Japanese market, he produced jewellery lines he thought were different and would sell well. "My products were more chunky. Japanese buyers preferred smaller items, but my larger pieces were actually cheaper," he says.

Taking each new idea from drawing to finished product, New Concept cuts most of its own gemstones to fit each design. An exception is using calibrated machine-cut natural gemstones for smaller items. The factory in Shenzhen, mainland China, was opened in 1997 and now employs 150 people. The Hong Kong office takes care of sales and administration.

New Concept's production is mainly of 18K white gold rings set with coloured gemstones, especially blue topaz, and accented with diamonds. Mak sees strongest demand for items in the US$500-1,000 FOB Hong Kong range.

One of the company's most successful products is a collection featuring what Mak describes as a "snowflake" setting technique, which the company painstakingly developed. "It is a very difficult setting despite looking simple, but it is less obtrusive than prongs. Importantly it is also something different. One motivation to buy jewellery is something which looks unique. In Japan the consumer has money to spend. If you can catch their interest, you can sell," says Mak.

"After the look, the price is an issue, and since our margin for profit is very good with this technique, our selling price is very competitive," he says.

But Japan has been a roller-coaster ride in terms of business over the past two years. Eighteen months ago the company exported 80% of its jewellery to Japan. Since then, sales have dropped by 40%, according to Mak. "Luckily I see signs of that business coming back. I feel we are two-thirds of the way back to where we were in 1997," says Mak.

In search of new markets to compensate for Japan's recession, the Middle East has become an important area for New Concept. The US is also healthy, but demand is for 14K items with lower-quality diamonds. "They like my ideas and the shape of my jewellery," says Mak.

Surviving the past two years has been the priority for the company. Mak found it hard to prosper in the depressed market with his luxury item ideas. But the company has overcome its difficulties and now, with renewed economic growth, will come the good times.

"I see no point in talking and forecasting where the economy will go from here. I just get on and do my job of creating attractive jewellery for my clients," says Mak.

Written by Johnny Edison

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