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CHINA - Brimming with Opportunities, Ambitious Venture Worldmart, Propagating Rising Chinese Precious Trade
“India and China comprise 40% of the world population; if these two nations work together, then we have an economic entity that can overtake any superpower in the world”....
By: Daisy Tanwani
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Feb 28 2007 12:00AM
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Reference: 2219  

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“India and China comprise 40% of the world population; if these two nations work together, then we have an economic entity that can overtake any superpower in the world”.... (Economic Times - Special Issue Oct. 2005)

Well estimated! Not very long ago China and India were only talked about for their ever increasing population but things have changed now and drastically too. These two nations are now considered to be the future super economies due to their galloping industrial development. The duo is by-passing many developed countries. Nevertheless, the two countries themselves are looking at each other too for new avenues of growth, gems and jewellery sector being one. India is undoubtedly the leader in the cut and polished diamond market; however China has become the second largest in the area and continues to increase its share by leaps and bounds. The above statement may be considered as a threat to the existing leader, India. Instead, if the situation is taken in good spirit, India and China can get mutual advantage by moving towards progress together.

The coverage below analyzes the developing situation and also details the Worldmart Jewellery & Gems Emporium Centre’s contributory role.

China Advances:

The growth in the Chinese precious sector has been spurred on as power tariff cuts line up and needed liberalization of the market is in full swing. As the country allows more foreign investors to venture in and greets them with all the required infrastructure and support services to set shop, China is already one of the foremost countries in plain gold jewellery. In platinum consumption China has overtaken Japan as the market leader while our sources tell that over 50% of the world’s synthetic stones are supplied from Wuzhou; not to mention, pearls and jade that come from China. Hong Kong has risen to become the studded jewellery manufacturing centre and for domestic jewellery retailing; there has been no looking back since 1993. When it comes to diamonds, China has a long way to go till it even gets close to Indian share of the polished market. Though the targets are big and difficult for China but not impossible; potential is there and has been identified. Obviously the world has its eyes on the second largest economy of the world. No wonder, De Beers has been making efforts since 1997 to develop the Chinese market. Just like always, wise diamond processors from Israel, Belgium and even India are setting up bases in China. Lately China has surprised everybody by opening its doors for foreigners in its precious sector and further simplifying the procedures for precious trading. The thriving jewellery parks at Panyu offer all the services required for convenient growth to foreign and domestic investors alike.

Why China?

Population has worked in favor of China; high economic development in the last 15 years has enabled the domestic jewellery market to grow rapidly. The increasing per capita disposable income has lifted jewellery to third preferred item after real estate and automobiles. Also, China is viewed to become the world’s leading jewellery consumer and manufacturer by 2010. Jewellery in China is very popular amongst the youth and is considered to be a fashion accessory; providing scope for constant innovation and creativity. Almost 22 million people get married in China every year; this creates a huge market for the jewellery industry, diamonds in particular. Besides, people have developed taste and are often seen purchasing precious metal cutlery and decorative items also to embellish their lifestyle.

Cheap, Disciplined Labor:

Very often Chinese labor becomes a paragon in the precious world when it comes to hard work and discipline in the world. Labor is relatively cheaper as compared to other countries and skilled and devoted. They are accustomed to work in an uninterrupted manner and are reliable; further assuring increased productivity. The industrial parks in Panyu have a vocational training centre for the replenishment of skilled labor. Technology is another area where China progressively excels.

Lure of Low Taxes:

The country boasts of superior infrastructure, excellent transportation, road, airports and sea ports. Besides, constant government support plays a crucial role in the development of the precious industry in China.

Low taxation is the most luring feature of all.

Worldmart Jewellery & Gems Emporium:

excellent transportation, road, airports and sea ports. Besides, constant government support plays a crucial role in the development of the precious industry in China.

Low taxation is the most luring feature of all.

Worldmart Jewellery & Gems Emporium:

There are various places in China that accommodate precious sector operations, but looking at the ever rising opportunities few jewellery parks that are high on infrastructure and technology. One of them is the Worldmart Jewellery & Gems Emporium. Worldmart is located at Baiyue Plaza, the centre of Panyu with total gross floor area of around 40,000 square metres. A bonded warehouse has been built for public use with operation area of 16,000 square metres and offers a wide range of services in the Tax Bond Area. Worldmart offers one stop solutions to jewellers and manufacturers from local and global markets, including procurement, manufacturing forwarding, duty free prototype display, tax bond and comprehensive insurance, logistics, customs clearance, networking and industry training. Moreover, inside Worldmart’s tax bond area, all the imported raw materials and finished products of jewellery are exempted from tariff; value-added tax and consumption tax. In a recent interview KK Yeung, CEO of Worldmart provided details of opportunities in the Chinese precious industry and most importantly the contribution of the Worldmart Jewellery & Gems Emporium to the Diamond World.

What are the business opportunities available at Panyu where Worldmart is located?

Panyu with its diamond industry is doing well but the consumption patterns have changed. Pearls and jade jewellery are in demand while non diamond gemstones jewellery is catching up fast. Imitation jewellery which was not considered very popular is now commanding much demand. Therefore, Panyu also needs to change with time. There are many opportunities springing up around Panyu that need to be taken up seriously.

What do you think has been the major hurdle in the way of expansion of the Chinese precious industry?

The precious businesses in China still remain family owned, the onus is on the family and relatives, hence it becomes difficult to modernize and face challenges of volume business. Besides, there would be a considerable demand of sophisticated technology in future which SME’s are not well versed with. Panyu has the ability to take on the prevailing opportunities but SME’s won’t be able to grow as they are not very flexible, also the technology level available with them is low. A corporate structure is required for growth and that requires great deal of discipline.

What could be the solution?

We cannot expect the small family owned organizations to change overnight. A transformation in management style and capital structure that can deal with greater risks of business is needed. Also upstream operations like branding and functioning of ODM’s instead of OEM’s would require a great expertise. SME’s may not provide that kind of flexibility to run such operations, besides the skills required would also be missing with small business operators. By all this I conclude that these businesses need to comfortably move forward. For that, infrastructure in terms of support services would be required.

What essentials Worldmart has to offer to members?

Maximum operations in businesses are information technology based. Knowledge and service based skills that were not considered as core competence before in traditional OEM operations are very essential now. Therefore we are providing the combined capability of the Worldmart and Shawan Jewellery Park to the members. Shawan is the sister concern of Worldmart and services at Shawan Jewellery Park like on site custom examination, testing, certification, is sharable amongst tenants of the Park and Worldmart. This jewellery park which concentrates on infrastructure really becomes an added advantage for anybody coming in. For example, if an Indian manufacturer plans to set his shop at one of these places he is not going to bring his workers from India to help him do so. It will cost him a lot of money and he also would face great risk. At Worldmart to prevent such a problem he would be backed with support structure like workers, head quarters, parking space and vocational training school that will assure the replenishment of skilled personnel. This will enable the businessmen to focus on the core area which he is good at. Hence, if he does well he stays or he goes back. But in that case also he does not lose anything as he hasn’t put in huge investment; he hasn’t brought his expensive technical assistance and neither has gone through all the legal procedures to ensure his survival here.

For example, if an Indian manufacturer plans to set his shop at one of these places he is not going to bring his workers from India to help him do so. It will cost him a lot of money and he also would face great risk. At Worldmart to prevent such a problem he would be backed with support structure like workers, head quarters, parking space and vocational training school that will assure the replenishment of skilled personnel. This will enable the businessmen to focus on the core area which he is good at. Hence, if he does well he stays or he goes back. But in that case also he does not lose anything as he hasn’t put in huge investment; he hasn’t brought his expensive technical assistance and neither has gone through all the legal procedures to ensure his survival here.

What are the other support services that Worldmart provides to members?

A strong database of people is essential for business. Worldmart has a massive database that is accessible to all its members. Other support services like certification, customs, logistics, insurance, banking, financial accounting, and legal advice are available for the club members.

How does Worldmart assist business generation?

Worldmart is licensed to deal with all the jewellery related raw materials and also expensive watches and electronics. Worldmart is an international platform that allows buyers and sellers from the world over to meet. And when they meet business in volume is generated. Volume in the industry is required for progress and without it the industry will remain what it is today, same SME’s will continue to operate. There is enough scope in the precious industry for progress.

A strong database of people is essential for business. Worldmart has a massive database that is accessible to all its members.

What other shortcomings can you point out that had been blocking the progress of the precious industry?

Other industries like garments and electronics set an example for our industry; these industries operate massive volume business. It’s interesting to know as to how they deal with their raw material, components and inventory. The concepts that have lead these industries to success are still to be applied extensively in our traditional diamond industry. Surprisingly, precious industry dates back to antiquity in the manner it is conducted. For example collective procurement of raw material has never been mentioned. 60% of the raw material bought by the manufacturers is probably never used; they spend so much time bargaining about the dollars and still get half the value of the actual money paid. There is inventory that is lying with people and never used. Ultimately, it results in making goods expensive both for buyer and seller.

The concepts that have lead these industries to success are still to be applied extensively in our traditional diamond industry.

Volume generates possibilities. Comment please.

Basically, nothing much has changed in the last 50 years in terms of operating this industry. But once things change and the industry talks about volume many possibilities would arise. Refined working and product segmentation would be possible. Businesses would be more focused.

What position Worldmart would be enjoying in the trade operations?

Worldmart would most unlikely be taking an active role in any of the trading activities as it does not want to be seen competing with its customers because that would create conflict of interest and further Worldmart would loose its position as a neutral entity.

How does Worldmart benefit the trade and its members?

Worldmart is more of an exclusive Hongkong based platform/ club where buyers and sellers become the members. This facilitates them to enjoy the services and infrastructure while advantage from the promoted business activities offered by Worldmart depends on their membership. Traditionally, businessmen have been doing business with a few people. This limits the market, the processes are always indirect. But with an open platform and set of protocols governing the transactions within the market, businessmen can deal with the demand of 360 Panyu based jewellery manufacturers at one go. It is real good timing for the industry to start trading in China as the rules governing the import tariff have been adjusted. Also the subway link makes Worldmart easily and quickly accessible from the biggest southern metropolis of China.

What is the procedure to become a Worldmart member?

Anybody who wants to avail the facilities at Worldmart has to become the club member. The procedure of becoming a club member is not complicated. There is a membership committee that examines the applications; bonafide businessmen with a registered entity in Hong Kong with clean reputation are welcome to join the club.

Why would an Indian manufacturer choose China to set up a base?

There are certain reasons for Indians coming to China. They either want to sell their diamonds or want to bring their Indian branded products here and take advantage of the high-end manufacturing skills in China which are more compatible with the requirement of the market, particularly that of USA and Europe. Another reason is that they want leverage on to the capabilities of Chinese factories. They are aware that Chinese factories have a long standing with the markets they are targeting. Also they get set next to HongKong which is a prominent trading centre. Yet another reason is that after doing well in America, Indian businessmen want to bring their products to China and enjoy Chinese opportunities. Therefore, they look at Panyu where they can customize their product according to the Chinese market. Additionally they want to outsource and use China as a separate base altogether. Thereafter, they want to enter into mergers and acquisitions when they become more adjusted with the Chinese environment.

It is real good timing for the industry to start trading in China as the rules governing the import tariff have been adjusted.

How does Worldmart assist the above operations?

Worldmart helps them in various ways; like a businessman from India may want negotiations, advise, matchmaking, associations; different people have different requirements. Many want to set up bases without much investment. There is a constant fear - what if it does not work ? In that case Worldmart is well placed to provide all the requirements.

Is it mandatory for every member to buy space in Worldmart?

Every member is entitled to apply for a shop space. However there is limited shop space, it’s solely on first come first serve basis because I wouldn’t be able to help anybody with space once I run out of it. Others who do not own any space can only enjoy the space facilities as and when available and for that they will have to bear extra cost.

What is the current status of the project?

Building has been completed, facilities are 99% commissioned while staff is fully trained and qualified; relevant licenses are also in hand. Summing up, we are ready to kick start action; we have begun allocating space on the street side. The response is wonderful!

How supportive is the Chinese government for the project?

I am pleased with the government support I have received since my arrival. Various agencies of the government have been quite helpful. I have got the opportunity to take up the matter to the highest level of the Panyu government. Also, I have received a lot of support for future associations, Chinese government has been agreeable to my assessment and ideas.

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ottokar
(Vienna)
i am very happy for this Information please i have question it is possible you have in the new Global jewelery Operation Centre a Company for storage golg e.g. or you send me contact adresse ( bonded warehouse ) thanks for your answer ottokar
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