Archive for August, 2010

Bali: Silver Jewelry & Kites (Part 1)

Wednesday, August 25th, 2010

dreams-kiteA while ago, my silver jewelry buyer and me, Jan Brassem, left New York on a sourcing junket, er, mission, to Bali, Indonesia. We were looking to add some unique Bali designs to our branded sterling silver line and check out Bali’s sophisticated jewelry manufacturing expertise. More on that later.

As you probably know, Bali is arguably the most beautiful spot on earth – considered the Australian Riviera. James Mitchner wrote South Pacific with the island in mind. “No wonder you want to go,” the buyer told me.

Bali is arguably the most beautiful spot on earth – considered the Australian Riviera. James Mitchner wrote South Pacific with the island in mind.

The flight, via Hong Kong, lasted 20 hours. When we arrived at the Bali International Airport, we adjusted to the slow customs check-in. (What’s a computer?) Hurry up and wait, (we’re from New York after all). But we had no choice

Other than that, the airport was bedlam — Bali’s definition of organization. We kept our eyes open and hoped for the best. Exhausting.

We selected a taxi – or rather a taxi selected us – and left for the hotel. Our agent-guide-translator would meet us there. The taxi ride was –well, read for yourself  — and see the YouTube video.

• Kites filled the clear blue sky. Kite flying is Bali’s national pastime.
• Huge, ornate, carved statues guard many street corners.
• There is no speed limit. We arrived at the hotel shaking and in one piece
• The men are handsome, the woman beautiful
• With an abundance of teak, inexpensive labor and cheap land, hotels were all on one level and gorgeous. Never seen any hotel like them.
• There were lots of Australians.
• One negative. While we were leaving, al-Qaeda blew up a local bar frequented by Australian tourists. The island is mostly Muslim.
• Everything, (trinkets, furniture, souvenirs) is teak. Given enough time, (a few days) they will carve anything to your specifications.

We arrived at the first factory early the next day. The rifle toting guard/sentry, after opening the barbed wire-topped gate, let us in. Inside was a bustling compound – a fort of sorts. Much of the factory labor was done outdoors.

We were led inside to a long dark showroom. Everything Teak.

The  Australian owner introduced himself and his two attractive female assistants. The assistants wore typical wrap-around sarongs and spoke no English.

They brought out the trays of silver samples…..We began to work.…..

To be continued…..

China: For the Silver Jeweler it’s Time to Pack Your Bags

Tuesday, August 17th, 2010

Today there are over 250 million jewelry consumers in China, (there will be 583 million by 2025), including the voracious Chinese version of Gen Y. In 2014, China will be poised to overtake the US as the world’s largest manufacturer. China’s currency. (the yuan), has been rising versus the dollar for over a year.

There’s more. Goldman Sachs predicts that by 2050, China will most likely have the largest economy in the world, followed by the US and Japan. Even more remarkable, by 2050 China, and its manufacturing partner Japan, will be the world’s dominant supplier of manufactured goods and services.

China offers an important long-term growth opportunity with implication on your long-term future.

Here are some examples of the Chinese appetite for silver jewelry: The dream-china-us_86204111Chinese economy will grow by 10.1%, compared to an estimated 3% in the US. The Chinese consumer will have plenty of disposable income thanks to the Chinese government’s economic policies.

Jewelry Industry leaders seem to agree and are scrambling to get a foothold. The International Colored Gemstone Association, (ICA), is developing colored stone promotions in China. Not to be undone, the Indian diamond manufacturing association is opening offices in China.

Even non-jewelry companies are going great guns. GM, says Jan Brassem, struggling in the US, had a 2007 sales increase of 35%. China is one of McDonald’s fastest growing markets. Wall Mart is scheduled to open 100 stores in 2010.

It doesn’t take a crystal ball to see the future market opportunity for the silver jeweler, or for any luxury product for that matter. China offers remarkable growth, not unlike the US economy did in the late 50’s and 60’s.

Warning: Silver jewelers that don’t take a vigorous approach to China will face a threat to their very long-term existence. But, how can the uninitiated independent jeweler navigate the bumpy Chinese landscape? What quick and reasonably efficient marketing/sales defensive strategies can the silver jeweler develop? There are many and here are just a few.

“Warning: Silver jewelers that don’t take a vigorous approach to China could face a threat to their…. existance.”

• Web Site. As a first step — a start — one of the easiest and least expensive is to design a web site that appeals to both US, and Chinese, consumers. Have the site translatable to English and both the Mandarin and Cantonese languages. (These ‘Translation’ programs are readily available.) Don’t forget to use a credit card that accepts the yuan.

• Joint Venture. Through any number of Chinese trade associations, (HKTDC, China Trade Center, many others) contact a trade representative (via local call or email) and ask her to put you in contact with a Chinese-based retailer for possible alliance or joint venture. Be sure to do your homework and carefully outline the type, size, region, language and product mix of the potential partner.

• Jewelry Industry Buying Group. Like many diamond and colored stone associations, open a Jewelry Industry Buying Group Office in China or Hong Kong may lead to both sourcing and marketing opportunities, not to mention market intelligence. One US-based Buying Organization has already started the process.

• Attend Chinese Jewelry Trade Shows. Several Chinese jewelry trade associations hold at least seven shows in major Chinese cities annually, (My favorite is the Hong Kong jewelry exhibition). Attending one of these shows may lead to contacts and alliances.

Finally, doing business in China is no longer an exercise in clashing cultures. In reality, working in China is more like doing business in the US than in Japan. Here are a few pointers – a primer of sorts — of doing business in China.

• Chinese politics and politicians are less corrupt than the old days. Technocrats who are smart and well trained now run the government.

• Chinese consumers love foreign brands (including silver jewelry brands), but when it comes to digital technology they still prefer the local variety that caters to local tastes. This was an expensive lesson for Google.cn

• China is diverse, decentralized and fractured. Local retail development means local opportunity – not national. There are few large retail companies so think local joint ventures.

• Lawyers and accountants are required. Since the 1980’s a cottage industry has developed of ‘selling’ relationships. This is an outdated concept no longer needed.

Now that you have embraced the internet, accepted modern marketing and is comfortable with merchandising concepts, it’s time to look east and adjust to an eastern culture.

China offers an important long-term growth opportunity with implication on your long-term future. Developing business relationships in China could be an interesting and enjoyable personal experience. Pack your bags.

Teen Girls love Silver Jewelry almost as much as their cell phones.

Wednesday, August 11th, 2010

In 2009, nearly half of all teen internet users bought goods such as apparel, jewelry, books and music online, according to the Pew Internet & American Life Project. And they buy lots of it….into the billions of dollars.

This represents a 17-percentage-point increase in penetration over 2000. An even higher percentage would have made such purchases had they more spending money and access to a credit card.

teenagers_jumping“Several payment alternatives like debit cards and student accounts not only enable teens to buy on the web but also let parents set spending limits and monitor payment activity,” said Jeffrey Grau, eMarketer senior analyst and author of the new report “Marketing Online to Teens: Girls Shop with a Social Twist.” “Yet rather than offer these options, many retailers seem content to drive online teenagers to their physical stores.”

When it comes to what teens buy online and offline, the largest spending category by far is fashion—consisting of clothing (taking 22% of total teen spending), accessories/jewelry (11%) and footwear (9%). Fashion represented 43% of North American respondents’ spending plans in spring 2010, Piper Jaffray reported in its 19th semiannual survey of teens.

Fashion translates into social shopping for many teens—especially girls—who frequently seek approval from close friends or siblings about considered purchases.

Retailers that use innovative tools to bring that experience online, suggests Jan Brassem, will do best at attracting teen customers.

 
“New online tools are emerging that mimic the way teens like to shop in eclipse12371stores,” said Grau. “Some enable teens to shop online and instantly get feedback from peers about a considered purchase. Other help teens mix and match fashion outfits. Online retailers that are seriously interested in building their teen customer base should put these tools high on their list of web development priorities.”