Pearl Jewelry Trading Center

A recently completed shopping complex in the Hongqiao district of Shanghai is hoping to attract both local and international buyers to its new high-end pearl market. The shopping complex is called “Hongqiao Xintiandi”, or Hongqiao New World. The Shanghai Pearl Center purchased, for an investment of US$15.6 million dollars, the ground floor and first floor of the complex. The name is very reminiscent of the Hongqiao pearl market in the Chongwen District of Beijing.

With a budget of US$950,000 the new Hongqiao pearl market is hoping to build up awareness of this pearl super-center through media advertising in both English for international markets and Chinese for local markets. They are hoping to have the complex ready for shoppers in time for the October 1st holiday.

The developer of a pearl and pearl jewellery wholesale and retail hub in Shanghai has joined forces with several leading suppliers at a wholesale centre in Beijing to develop a new upscale pearl jewellery trading centre.



Called Shanghai Hongqiao International Pearl City, the new pearl jewellery wholesale and retail centre will be situated in a recently completed upscale shopping mall in the Hongqiao district of Shanghai, a commercial and residential area. According to Ding Miefu, general manager of the Shanghai Pearl Center, which initiated the project, the developer formed a partnership with leading companies at the pearl wholesale centre Hongqiao Pearl Market in Beijing and purchased two floors in the new shopping mall with a total area of 6,000 square metres. This new wholesale and retail centre is expected to cater to the growing demand for pearls and pearl jewellery from the domestic and overseas markets.



"We are confident of a sustainable and significant growth in sales of pearls and pearl jewellery in China because of the increased knowledge and awareness of pearls among consumers in China. In view of the increasingly active pearl trading in Shanghai we believe we are able to further upgrade the wholesale and retail environment and facilities by establishing a centre where all major suppliers gather to conduct business.




"The establishment of this new pearl centre represents a major phase in the development of the pearl sector in China. Pearls are the major focus of this new wholesale and retail centre, although it will also feature higher-priced diamond and gemstone jewellery designs, including jadeite jewellery and designs in gold and platinum, antiques and higher-end decorative objects. Initially, the capacity of the new pearl centre is outlets of up to 100 companies. We expect that most companies will focus on wholesale. The new centre will target customers from overseas."



The newly completed shopping complex in Hongqiao is called "Hongqiao Xintiandi," or New World. Mr Ding said the Shanghai Pearl Center purchased the ground level and the first floor of the shopping mall, and total investment was US$15.6 million. "We aim to begin recruiting tenants in June 2004. The decoration is scheduled for completion in September, and tenants are expected to starting moving into their shops from the same month. We expect to schedule the grand opening of the centre for before National Day on October 1. We are confident regarding the development of the Shanghai Hongqiao International Jewellery Center. Over the past few months we have already been approached by as many as 70 companies expressing interest in an upscale pearl and pearl jewellery wholesale and retail centre."



As the wholesale and retail centre will be positioned as a jewellery-trading facility for higher-end pearl jewellery and pieces with coloured gemstones, most outlets in the complex are expected to be freestanding specialty stores and boutiques. Counters will account for only a small percentage of the outlets. "We will give priority to companies which plan to open freestanding shops," Mr Ding said.




The developer of the centre will provide preferential treatment for overseas companies, including those in Hong Kong and Taiwan, as well as for well-known brands from overseas. "We will provide a package of services to overseas companies that may not be familiar with the business environment in China and that have not had any previous experience in dealing with relevant government departments. These include applications for various licences, which are considered complicated by many overseas companies and which have discouraged many of them. We believe our services can help overseas companies reduce operational costs and save time," he said.



A company called Shanghai Hongqiao Jewelry Operation Management Co has been established by the developer to be responsible for the day-to-day operation of the centre. "We have recruited professionals - the majority hold degrees and have had between three and five years of relevant experience in managing a wholesale and retail centre. We aim to have the management of the centre up to international standard."




The next phase in the development of the new centre is to promote awareness among the trade, both overseas and in China. Up to US$950,000 has been earmarked for the large-scale advertising and promotional campaigns targeting both domestic and overseas markets, according to Mr Ding. "We reckon up to 70 percent of the budget will be spent on advertising in overseas English-language trade publications: the remaining 30 percent will be spent on local media, including newspapers, and on other advertising materials like light boxes and posters at the international airports in Shanghai."



Revamping Shanghai Pearl Center

The management of the Shanghai Pearl Center, which occupies two levels of the Shanghai Traveling Goods Building on Nanjing Road, has embarked on a revamping project to spruce up the booming trading hub for pearls and pearl jewellery.




Mr Ding said the objective of the major facelift, which is being carried out mainly on the higher level, is to upgrade the facilities of the existing pearl centre in order to attract more customers to source pearls and jewellery there. "We have invested substantially in a new and more upscale pearl centre in the Hongqiao district as we see that there is limited room for further expansion at the existing Shanghai Pearl Center. Nevertheless, this does not mean that we will focus 100 percent of our resources on the new venture. The revamping project demonstrates our commitment to the existing pearl centre. We have also allocated additional money for massive advertising campaigns promoting the existing centre to be organized in China and overseas.



"We do not think the new pearl wholesale and retail centre will create any competition for the existing one because they cater to different segments of the market," he said.



Sales at the Shanghai Pearl Center have recovered from the downturn during the SARS outbreak in the first half of 2003, Mr Ding said. "Total sales from January to March 2004 of companies with outlets at the pearl centre increased 30 percent compared with the corresponding period in 2003, which was before the SARS outbreak affected the market. We expect annual sales for 2004 to go up by 30 percent compared with the previous year. The substantial sales rise in the first three months of 2004 was attributable to the 'delayed purchases' factor. A number of overseas buyers were deterred from visiting China by the SARS outbreak, and made purchases through online ordering facilities. As the situation has returned to normal, they have begun visiting the Shanghai Pearl Center again. We have also been committed to maintaining the consistent quality of goods available at the centre, upgrading the quality of services and diversifying the range of goods on offer. These all help to stimulate customer demand."




Mr Ding says that market demand has become more diverse. Many customers now are sourcing not just Chinese freshwater pearls, but also Tahitian, South Sea and akoya pearls. "Sales of freshwater pearls no longer account for over 80 percent of total sales at the Shanghai Pearl Center, having declined to around 60 percent. The remaining 40 percent comprise Tahitian, South Sea and akoya pearls. Of these, Tahitian pearls are the most sought after among the three, and their share has risen to 80 percent. Thanks to the successful marketing campaigns in China initiated by GIE Perles de Tahiti, consumer awareness of Tahitian pearls has increased significantly. Market acceptance is on the rise also since the pearl association has built up an elegant image for Tahitian pearls among consumers in China. There is huge potential for further sales growth in China. Meanwhile, the popular South Sea pearls are those in white and golden colour. Sales of akoya pearls have remained limited, and the Shanghai Pearl Center sells Chinese akoya pearls mainly.



"Although sales of Tahitian pearls are increasing rapidly, freshwater pearls have remained the main category in the domestic pearl market," Mr Ding said.