E-commerce is booming in China and the country's jewelry traders are tapping into a lucrative online market. Online jewelry trading is poised to grow based on multi-channel strategies, social media platforms, new business models and the livestreaming boom.
The rapid development of China's telecommunications infrastructure has created a thriving online market. As high-speed fiber optic Internet and 5G networks expand in the country, 64% of China's 1.4 billion people use smartphones to surf the Internet. China has led the world in total mobile payment value for many years. Faster Internet speeds, larger screen sizes, and high-quality cameras have made video and live streaming lucrative channels, and social networks have transformed users from consumers of information to objects. share, interact.
E-commerce has long been an indispensable part of the Chinese jewelry business. And during the corona virus epidemic, social distancing regulations have contributed to promoting e-commerce activities even more.
The country's online jewelry market has grown significantly over the past decade with the emergence of new business models and channels. Internet and mobile technology are integrated into both B2C transactions and B2B transactions.
Consumers are more involved in the transaction process and design of their jewelry. Retailers can place orders with suppliers anytime, anywhere thanks to the online form. Social media platforms become trading platforms with group buying and sales staff participation.
The concept of “New Retail”
At the 2016 Alibaba Apsara Conference in Hangzhou, Alibaba Group Chairman Jack Ma commented “In the next 10 to 20 years, there will be no concept of e-commerce, only New Retail.”
In the Chinese jewelry market, this translates into omnichannel strategies. Traditional retail is enhanced by online flagship stores, participation in e-commerce platforms, strong integration with WeChat, influence from celebrities, online communication activities social and livestream campaigns.
Traditional retailers are actively using mobile networks, big data, electronic supply chains and even blockchain to continuously upgrade their business processes, and at the same time equip new terminals. Smart end at the store.
Chow Tai Fook Jewelery Group has equipped Cloud Kiosks at key locations in tier 1 and 2 cities. These online-to-offline (O2O) hubs link online orders at stores with its e-commerce platform.
Chow Sang Sang Holdings International Ltd launched its official e-commerce platform in 2001 and tapped online marketplaces such as Tmall and JD.com in 2010. “Among the jewelry retailers, we have the most consistent product lines for offline and online stores.” Winston Chow, director and deputy general director of the group shared.
For their part, online sellers leverage their online networks to expand customer traffic through online sales platforms and channels, while also opening brick-and-mortar stores and showrooms. O2O business model. Diamond and wedding jewelry retailer Zbird has added custom ordering stations at some of its stores.
These two distinctive integration journeys in China's new retail sector build on the advantages of each niche while expanding their markets through complementary channels. Traditional retailers are experienced in operating and managing brick-and-mortar stores. On the other hand, online retailers are experts in new retail technology, attracting traffic using online channels and higher brand recognition among younger consumers.
“When it comes to industry development, there is no strict boundary between traditional jewelry retail and e-commerce jewelry,” said Zbird President Stone Xu.
Every major jewelry brand in China now has its own e-commerce division as well as flagship stores on online shopping platforms such as Taobao, Tmall, JD.com and Pinduoduo. Some even have their own livestream sales team. Chow Tai Fook works with 90 online platforms in China and even surpasses e-tailers in online sales on occasions such as Singles' Day on November 11.
According to Clement Sabbagh, President of the International Colored Gemstone Association (ICA), “Alternative shopping channels, including WeChat mini programs, group buying, are thriving alongside e-commerce platforms . Group buying allows shipments to be consolidated and shipped to a central buyer in Hong Kong.”
Diverse channels
Although WeChat is considered to be lagging behind established e-commerce platforms in terms of online sales, WeChat is currently considered a suitable social network for the jewelry industry. Thanks to the integration of the WeChat Pay payment system, this social network allows 1.2 billion users to access and shop conveniently.
Jewelry companies, regardless of size, see the value of WeChat. Larger retailers drive sales through mini shows, live streaming, and special features like Do-It-Yourself (DIY) customization.
In May, Zbird launched the Wedding Ring Master app on WeChat. This groundbreaking technology took three years to develop, catering to millennial consumers by addressing their need for self-expression, as well as the “stay at home” culture during this time. Customers can create their own ring by adapting the design themselves. The app allows them to choose from 200,000 diamonds from around the world as their master stone, then choose their preferred side stones, metal, prongs and rings. Designs can be visualized through the app's 3D simulation feature. 3D drawings can be delivered to 3D wax printers in Zbird stores for immediate wax sampling or sent to the company's manufacturing facility to become finished rings.
This DIY application allows customers to participate in the creative process and provides Zbird with an innovative and attractive product, new sales opportunities and significant cost savings.
One-of-a-kind rings require careful logistics as each item is customized and delivered to the customer within a reasonable time frame. However, this C2M (Consumer to Manufacturer) sales model helps significantly reduce inventory and fast cash flow.
Since the mini program launched, more than 10,000 people have signed up for membership, with the first 10 days of sales being quite successful. More than 95% of members said they would consider using the app to design their own ring.
Chow Tai Fook also applies the C2M business model to enhance customer experience through participation in the production process. According to CEO Bobby Liu, the group's new C2M experience center in Shenzhen allows customers to shop on D-ONE - an online jewelry custom design platform, witnessing the production process firsthand. produce jewelry according to their orders.
Social variations
While big brands develop flagship stores, membership service centers, and mini programs on WeChat, smaller businesses are also taking advantage of the platform.
Chinese online sellers often visit international jewelry trade shows in Hong Kong to source products and list them for immediate sale to customers in mainland China, including retailers, wholesalers and consumers. They often collect needs from potential customers before the exhibition, then search for suitable products at the exhibition and post images and detailed information on online platforms. The WeChat Moments function allows up to 5,000 users to view posts. The Messenger function enables quick communication with potential customers, while the WeChat Pay service helps buyers make deposits or pay sellers.
In this business model, online sellers can sell goods without spending cash while or even before purchasing an item at the show. Therefore, WeChat offers these sellers a low-cost e-commerce channel because little or no initial investment, inventory, and operating costs are required.
With a similar format, many gem and jewelry dealers have taken advantage of the opportunity to sell on WeChat when visiting industry centers such as Thailand, Israel and Brazil.
ICA's Sabbagh describes this as a modern version of brokering between supplier and buyer. “This real-time and on-demand business channel makes sourcing easier, especially for dealers who no longer need to carry huge inventories to their customers. This online selling is increasingly popular and less expensive, in line with the trend of reasonable and smart spending,” he commented. “For gem companies, it is a matter of adapting and embracing this new behavior, which could become a very profitable business channel for our industry.”
Interact with customers
Small and medium-sized jewelry manufacturers also turned WeChat into a direct sales channel. Some businesses recruit agents to promote their products on WeChat Moments or mini programs. This approach helps expand reach and increase sales from showing the supplier's inventory to customer contacts.
Many forms of employee sales participation have also emerged. Cloudsales365, Chow Tai Fook's tailor-made O2O sales channel, sees employees constantly promoting and selling on social media.
“Based on the WeChat application, Cloudsales 365 allows our staff to respond to customer inquiries and needs, recommend products, send orders to our stores, and provide services personalized, among other services,” Liu explains.
CTF has connected with more than 460,000 customers since launching the platform in early January, attracting more than 4.7 million visits to their online store, representing 35% of online sales through CTFMall.
Focus on livestream
Live streaming has evolved into a leading digital tool for e-commerce. Channel sales figures are still on the rise, causing platforms and locations to mushroom in the jewelry industry.
Jewelry livestreams in China come in many different forms. Basically, during livestream sessions, sellers will display jewelry items – and sometimes film the production process, while viewers place orders while watching. Many livestreams take place in specialized rooms at livestream facilities. Primarily, the hosts sit on one side of a long table, with various vendors taking turns sitting on the other side and presenting their products. Sometimes, the host works with just one table or booth or conducts a livestream right at the store or supplier's counter.
Alibaba's Taobao Livestream platform was launched in 2016 with the slogan of providing an exceptional sales environment and shopping experience. According to its latest report, 51.8% of total jewelry sales on Taobao.com and Taobao Livestreaming were generated by live streaming accounts. Jewelry sales now account for 35% of transactions on Taobao Livestreaming, and the top 100 jewelry businesses on Taobao derive 60% of their revenue from livestreaming.
Taobao is recognized as an effective profit-making channel for Chinese jewelry businesses. The total average daily jewelry sales on Taobao Livestreaming are 70 million yuan ($9.88 million). The highest recorded price for a piece of jewelry on the platform is 3.3 million yuan ($465,900).
Jewelry leads all sectors in number of sessions on Taobao Livestreaming and ranks second in transaction value. The more than 40 jewelry livestreaming rooms on the platform have an annual sales capacity of over 100 million RMB (14.1 million USD).
Jewelry belt
The boom in business prompted Taobao to establish a Live Streaming Base in the Jewelry Industry belt with transactions worth 32 million yuan ($4.52 million) per day. As of November 2019, facilities have been set up in 9 jewelry industry belts in China. Five of these livestreaming facilities have an annual sales capacity of more than 1 billion RMB (141.2 million USD), while transactions at more than 40 jewelry livestreaming rooms reach the 100 million RMB mark ( 14.1 million USD) per year. Jadeite jade jewelry is the most purchased item during livestreams on the Taobao platform.
Sihui City in Guangdong Province is a manufacturing and wholesale center for low to mid-priced jadeite jewelry. Sihui Taobao Livestreaming Base, established in 2017 inside Sihui Wanxinglong Jadeite Market, demonstrates the synergy between the jewelry industry and online platforms. Manufacturers reach consumers online who benefit from a cost-effective shopping experience.
“Seven jewelry brands including Cuihua, Alllove and Sunfeel participated in a successful group live broadcast at our facility on May 5. The Shenzhen government provided special support by inviting 7 A presenter from a local television station participated and reported on the meeting. Each host partners with a jewelry brand during the livestream to interact and engage viewers. One of the brands even sold a product for US$40,000 during the event,” Lu commented.
Sihui City in Guangdong Province is a manufacturing and wholesale center for low to mid-priced jadeite jewelry. Taobao Sihui livestream center, established in 2017 inside Wanxinglong Sihui Jadeite Market, demonstrates the synergy between the jewelry market and online platforms. Manufacturers reach consumers online who benefit from a cost-effective shopping experience.
Fang Guoying, founder of Wanxinglong Sihui Jadeite Market and head of Sihui Taobao Livestream Center, said daily sales on the platform reached 10 million yuan ($1.4 million) to 20 million yuan ($2). .8 million USD).
Shubei Jewelry Livestream Complex is a six-room facility in Shenzhen's Luohu district, China's jewelry manufacturing and wholesale center. Livestream sessions of at least 20 famous jewelry brands were held here.
According to Lucas Lu, head of the facility and vice president of Shuibei Jewelry Group, livestream works especially well when there is the participation of KOLs and the support of local authorities.
“Seven jewelry brands including Cuihua, Alllove and Sunfeel participated in a successful group livestream event at our facility on May 5. The Shenzhen government provided special support by inviting 7 hosts program from a local television station participated and reported on the meeting. Each host partners with a jewelry brand during the livestream to interact and engage viewers. One brand even sold a product for US$40,000 during the event,” Lu said.
B2B outreach
Technology is also driving business efficiency for China's jewelry sector. With domestic travel suspended due to Covid-19 lockdown measures, jewelry traders have had to abandon their usual practice of visiting the Shenzhen manufacturing center to review designs. , check the sample and place an order.
Xingguangda Jewelry, one of China's largest jewelry manufacturers, has relied on its new M2B (Manufacturer to Business) online platform to serve 4,500 regular customers across the country.
“The M2B system has enabled hundreds of customers in China to choose our designs and place orders anytime, anywhere from their desktops, mobile phones and tablets. By eliminating the need to come into our office, both the customer and we save a lot of money. Big data from the number of responses allows us to analyze and predict future demand patterns and trends, thereby planning production and marketing more accurately.”Lin Changwei, president of Xingguangda Jewelry revealed highway.
With 1,200 employees and 44,000 square meters of floor space, the company produces more than one million pieces of jewelry each year.
E-commerce trends in China's jewelry industry 2020:
- Livestream becomes a powerful sales channel
- Switch from KOL (Opinion of the Chief) marketing to KOC (Opinion of the Customer) marketing
- Adopt short video applications to support e-commerce
- Commercial growth in the form of buying and selling used jewelry
- Increased group buying of gemstones such as jade, thanks to major e-commerce platforms launching group buying functions
- Mini programs to supplement shopping platforms for brands
- Faster parcel delivery in China
- The C2M (Consumer to Manufacturer) data-driven model provides a reference basis for business development planning.
- Changing the overseas e-commerce landscape.