Sales boost for Hong Kong jewellery.

After spending most of 2009 in stock clearance, many retailers have been replenishing stock with new items to draw prospective customers into their outlets, said Matt Chan, Managing Director of Hong Kong's Buildview Jewellery. "Market sentiment in the US has definitely improved."

The increased demand from Europe has also helped drive sales at design-orientated gemset gold and silver jewellery expert Jace Group Ltd over September and October, said Marketing Manager, May Lau. "Our sales grew significantly compared with that of last year."

Chan: US improvement.		Diamond and coloured gemstones from Buildview Jewellery.

Sales in the Middle East have equally shown signs of recovery, said Chris Wan, Marketing Executive of upscale jewellery manufacturer Hong Kong Universal Jewellery Ltd.

Butani: pick up in the Middle East.

Good news comes with challenges

Hong Kong manufacturers have highlighted several changes in the buying pattern of overseas customers.

Chan said many US buyers had postponed their orders for goods to be delivered in time for the Thanksgiving shopping season until mid-September, which put an enormous strain on the production of many Hong Kong manufacturers with facilities on the Chinese mainland over the past month.

Rosalina Wong, President and Designer of pearl jewellery specialist A & A International, said most orders from customers in Japan and Europe were labelled urgent and for small quantities.

Wong: urgent, small quantity orders.		Pearl jewellery from A & A International.

Japan and Europe are the largest markets for A & A International, each accounting for 30% of overall sales.

To further reduce their costs amid challenging market conditions, a growing number of small retailers in Europe have stopped relying on middlemen, such as importers and wholesalers, and begun to source jewellery directly from Hong Kong manufacturers, said Chan of Buildview.

"It indicates that they have sufficient faith in the quality of jewellery made by Hong Kong companies. Hong Kong suppliers have facilitated the direct sourcing by smaller buyers by being more flexible and relaxing their requirements for minimum orders," he explained.

Best-selling items in major markets

In an effort to drive sales, many Hong Kong jewellery manufacturers have taken a proactive approach and deployed more resources into diversifying collections, and improving designs at competitive prices.

With two separate design teams employing a total of 10 designers, Jace has sharpened its competitive edge by putting more effort into design and styling, and has broadened its range of offerings.

The company works closely with its customers. "We tailor designs to suit the specific needs of individual customers," Lau said.

Lau: tailoring designs.		Cubic zirconia designs in silver from Jace Group.

Jace provides a one-stop service encompassing product development, production and marketing via an associate company.

The Hong Kong firm's top clients are jewellery brands based in Western Europe, particularly Germany, France, Switzerland, Belgium and the Netherlands.

Its best-selling gold jewellery pieces in Europe include sets of matching designs studded with diamonds, sapphires, rubies, as well as freshwater and Tahitian pearls. The fineness of gold is from eight karat to 18 karat. Factory prices of the best-selling designs are from US$50 to US$500 per piece, Lau added.

	Creativity in silver from Jace.

Jace's most saleable silver jewellery items in the market are sets with cubic zirconia in a diverse selection of colours, sizes and shapes. Factory price of the best-selling items is from US$8 to US$15 per piece, Lau said.

UK is the largest market for Buildview. Most sales are to retail chains with between five and 10 outlets, higher-end retailers and some designer brands, Chan said.

Best-selling Buildview items include classic designs in 18 karat gold or platinum (PT950), with diamonds in F colour, VS clarity grade and up to 50 points in size. Pieces in 18 karat gold are also available with rubies, sapphires and emeralds.

Buildview diamond piece.		18 karat gold jewellery from Buildview.

The wholesale prices of these items are from US$480 to US$800. Buildview also supplies coloured gemstone designs in nine karat gold to retail chains targeting the mass market. The wholesale price of these items is around US$160.

"Compared with the US market, consumers in Britain favour more classic styling and pieces with volume. For example, most demand in Britain is for designs with gold weighing at least seven grams, compared with four grams of gold used for most items sold in the US," Chan said.

By exhibiting at trade shows in Europe, Buildview has established business relationship with buyers based in the Scandinavia, particularly retailers in Denmark and Sweden. "Consumers in these markets favour simplicity in the designs but with top quality finish. Best-selling items are in 18 karat white gold or PT950. Wholesale prices go from US$300 to US$500 a piece," Chan said.

To drive sales in a slowly recovering market, A & A diversifies its range of designs and develops more pieces that appear bigger but use less precious metal and are thus available at more competitive prices, said Wong.

The company's most saleable items in Europe, Australia and New Zealand include long necklaces with pearls from eight mm to 12mm in diameter and earrings mixing pearls and coloured synthetic stones, wholesaling from US$10 to US$50 each.

In Japan, most of the company's demand lies in silver mobile phone straps with pearls up to six mm, and 16 inch silver chains with pearls up to eight mm. These items are from US$10 to US$30 at wholesale. Best-selling items in the US are earrings in 14 karat gold with pearls from seven mm to 10mm, from US$20 to US$50 each.

In the US, Buildview sells jewellery to chain stores with a minimum of 50 outlets. The best-selling designs in the market include pieces in 14 karat white gold with semi-precious coloured gemstones, and designs in 18 karat gold with diamonds, wholesaling from US$150 to US$200 each.

Hong Kong Universal set.

Most of the company's exclusive upscale jewellery designs are set with high quality round and fancy-shaped diamonds from 20 points up and rubies, emeralds and sapphires.

The Managing Director of Butani said bigger pieces were in higher demand in the Middle East. The company specialises in bridal jewellery sets with diamonds in D to G colours, VS1 to IF in clarity grade, from melee to pointers, wholesaling from US$100,000 to US$500,000.

Gold to silver switch

	Pearl and gemstone jewellery from A & A International.

At A & A, many customers have switched to silver designs. "Before the price hike of gold, orders for gold jewellery accounted for 30% and those for silver items were 70%. Now it is 10% for gold, 90% for silver," Wong said.

Hong Kong Universal said a major impact of the surging gold prices was the difficulty in making quotations for ordered items. "It also gives rise to problems in repeat orders," Wan added.

Buildview has also had to adjust the prices of its finished jewellery to reflect the increased gold price. "There was some initial resistance from customers but they all understand the situation," Chan said.

from special correspondent Wilson Lau, Hong Kong