Chinese freshwater pearl dealers-sales down, quality up

[suzannelowrie]

I just returned from the June Hong Kong Gem and Jewelry show with an armfull of AAA round freshwater pearls. They are so so beautiful. Some of the strands are equal to the Akoya strands I saw in you-know-who's showroom in Tokyo. However, even if freshwater pearls are gorgeous and the best deal on the planet, sales by the top 5 dealers are down 50%. In the middle of the gem show that made me stop and think. I only like AAA round or better- so who will buy what I like? Do I buy pearls that I wouldn't wear or do I stick to the top of the line for my future on-line store? I have a PhD in Economics, but am I a pearl tourist or a store owner? I talked this over with the sales managers of the biggest pearl dealers- how could I continue to purchase the top of the line yet make the price affordable to the hard-up European and American middle class? We came up with three solutions: one of which was a no brainer for them. Buy more pearls and avoid the 14K and 18K clasps. If the strand is long enough, it doesn't need a clasp. Well, hey, everyone wins. I liked that solution a lot. More pearls! More pearls!

 

[Pearlsintime]

The Macro Cascades over the Micro in this case, all lux products will take a varied hit over the next few quarters world wide. In my honest opinion this would be the time you make a even more concerted effort into providing the absolute highest quality product without even thinking about cutting a single corner. As you have stated you are well versed in econ (nice to have another on here)...

For my company the quality associated with our brand is our lifeline.

In a ever changing market we as with nearly every other business are juggling with variables that have dramatics swings and flux's that cannot always be predicted.

What we can control is our quality and the quality that is associated with our brand name; not only within the business community but with our current and future customer base.

We have reduced our levels of profit and will continue to do so as our primary goal is to maintain and even higher level of quality by providing customers with more than they would expect, this is going to be the only way to survive the luxury wars in a time when many customers are faced with massively increased costs to staples of life such as food and energy.

regardless just my 2-cents, the bottom-line is never cut corners to try and increase profit. Anything that is done to strip value out of the customers hand while increasing your own profit is simply wrong and short term gains never will promote long term success.


have a good day,

 

[laurenb]

The Macro Cascades over the Micro in this case, all lux products will take a varied hit over the next few quarters world wide. In my honest opinion this would be the time you make a even more concerted effort into providing the absolute highest quality product without even thinking about cutting a single corner... the bottom-line is never cut corners to try and increase profit.

I think the same is actually quite true for consumers too. This is a great opportunity to focus a limited luxury budget on supporting quality goods, including the pure nacre FWs we believe will be increasingly valuable if/when FW bead nucleation matures.

Then, at the end of the slump, the best companies will still be comparatively strong, and people who love durable fine goods will have collections they might never have enjoyed in a boom.

While perusing pearls, I saw an eBay listing by a woman who said she was liquidating her Trollbead collection to help her child pay for college. First, that's tragic because that education makes the student an even greater asset to the country and no one should have to scrape out the trinket box for it. But even worse, whatever she paid for that stuff was at least 50% pure, perishable novelty.

I suppose she might say the same of my gadget infatuation, though at least most electronics do something useful. It reminded me of how trends drain wealth and heirloom-quality goods can help maximize it or build it a bit.

Speaking of building wealth, perhaps companies whose sales are down could look at something like add-a-pearl, but for much higher-end merchandise. I don't know how many middle class consumers will go for a $10k strand of pearls in the next two years, but I'd suspect there's plenty who'd get halfway through a strand of large, rare FWs or South Seas treating themselves once in a while and building them onto a chain. Maybe brooches will come back into style. Small, affordable luxury, etc.

Ultimately, this may be a good economic culture in which to raise the profile of fine FW pearls. Just not before I own 10 strands, OK?

 

[suzannelowrie]

"The slump"

"The slump"

I estimate that the "slump" will be 12 quarters long. But if you put a dozen economists in a room they'll come up with a dozen different numbers. Don't take me seriously (well, do). Just be patient. Three years is a long time. I have very modest goals for my website: I want it to fund my pearl tourist activities- small profits, small sales, small profile. That attitude will sustain me for a long time. Add two years of recovery time. That's a five year period of slump and recovery. I like the attitude of one respondant who said "keep up the standards". That fits with my world view.
Best wishes.

 

[laurenb]

I. I have very modest goals for my website: I want it to fund my pearl tourist activities- small profits, small sales, small profile.

I suspect my newb is showing, but what is the URL of your website?