Date
17 August 2017
China Silver Group says the time is right to venture into retail jewelry. Photo: Bloomberg
China Silver Group says the time is right to venture into retail jewelry. Photo: Bloomberg

INTERVIEW: China Silver to mine retail for pure profit

Leading silver refiner China Silver Group (00815.HK) is optimistic its online and offline shift into retail will generate profit as early as next year as demand for jewelry using the precious metal grows among China’s younger generations.

“We are quite confident that the retail business will generate profit next year as we leverage our well-established reputation in silver production,” company chairman Chen Wantian {陳萬天} told the Hong Kong Economic Journal’s EJ Insight.

The Jiangxi-based company has already set aside around 100 million yuan (US$16.42 million) for its venture into the lucrative retail sector in the hope of replicating the success of brands like US luxury retailer Tiffany, which makes a quarter of its sales from lower-priced silver jewelry.

China is one of the world’s top silver consumers and its fondness for the metal extends beyond investment and manufacturing. From 2002 to 2011, the value of China’s silver jewelry market grew 211 percent, according to the Silver Institute. 

Group president Kuang Yiping {鄺亦平}, a veteran in jewelry brand management and marketing, said the time is right to branch out into retail.

“China’s silver jewelry industry is going through rapid development. The absence of influential silver jewelry brands in the Chinese market presents an opportunity for us to expand into the retail business,” Kuang said. 

The company will start with a store either in Shanghai or Hangzhou as early as April 2014 and mainly target customers aged 20 to 25 years. If all goes well, the company would open more stores in other major cities.

“We won’t open too many stores very quickly; it will take at least three to four months to see how it works. The key is to make things right in the first place,” Kuang said.

The popularity of silver jewelry stems largely from the price of the metal. The silver product is a fraction of the price of pieces made from other precious metals such as platinum and gold.

The company will offer a wide range of silver jewelry products, mostly priced between 500 yuan and 1,000 yuan, to cater to increasingly sophisticated customers in major Chinese cities.

In addition, China Silver aims to introduce a leading French silver jewelry brand to the world’s most populous market to try to lure high-end consumers with items priced from 800 yuan.

Online ambition

Unlike other jewelry retailers, China Silver also places high hopes in an online platform to be launched later this month.

“The e-commerce platform will become an online shopping mall for silver jewelry — much more than the marketing or brand-building platform that most jewelry retailers have,” vice president Zhang Jinpeng {張金鵬} said. 

Zhang, a former vice president of Zbird.com, the top diamond jewelry e-commerce brand in China, said the products’ affordability and value for money will make them a perfect match for online shoppers. 

The company will launch a specific line of silver jewelry priced around 200 yuan to 400 yuan for online shoppers, and also invite other retailers to sell products on their platform.

– Contact the reporter at [email protected]

SK

Freelance journalist

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