Any Qs/Interest in 2013 Chinese Diamond Market & Traditions?

[John P]

Hello Pricescopers,

I'll be in Shanghai as a speaker at the 2013 International Jewelry Exhibition this week. If anyone is interested in current details about their emerging market, engagement traditions, comparisons with the west, etc., feel free to ask here or via Facebook. I'll keep any requests in-mind and pursue answers while my feet are China-wet.

I did this once before and enjoyed the discussion.
https://www.pricescope.com/communit...-china-hk-market-engagement-tradition.168511/

If anyone's interested ~ fire away.

 

[kenny]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Can people in China buy from, say, Whiteflash?
What, if any, would be the duty/tax/customs if a Chinese citizen bought from an American seller?
How would prices compare?

In China, which shippers are safer?

 

[hawk25]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

I'm curious about the level of knowledge and training a typical chain store sales associate has in China, and whether it's comparable with here in North America. The overwhelming majority of sales associates I've dealt with don't have much (if any) training, and I can only infer it's because the typical consumer just doesn't know (or chooses not to find out) any better.

You mentioned in your last thread that the Chinese market is more demanding of quality, notably with cut quality, and I wonder if that's forced stores to give better training to their sales team. For example, do they proactively offer the customer a loupe to see the stone? I personally have always had to ask for one.

 

[John P]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Hi Kenny,

It's not possible for individuals to purchase diamonds from other countries. China's only diamond import channel is through the Shanghai Diamond Exchange. Since individuals cannot import diamonds a proxy company that belongs to the SDE - and would be inclined to do a unique favor for the individual - would be required to facilitate such a transaction. This is not usual.

An individual could bring a diamond back from another country, but you can only bring 5000 RMB worth of goods total back into China (around $800), so it would be a pretty small purchase. That purchase would be subject to about 4% duty.

On the record, the laws were put in place to promote Chinese consumers spending their money in China.
Off the record I am told that a lot of Chinese go to HK to buy jewelry and do not declare it when coming back into China.

Blue Nile does have a partner in China for jewelry and sells finished jewelry through that partner, but not loose diamonds.

RE Shipping: Online sales in China are still not made sight-unseen. There is no HCA, Ideal-Scope or ASET proliferatoin here (stay tuned for an update on this however)... Rather, consumers consider lists and grading reports and arrange to see several candidate diamonds live in an "Experience Store" where they make the purchase. So there is no shipping involved.

Online selling is described a bit more here under "A Different Process:"
https://www.pricescope.com/journal/china-rise

How would prices compare?

This will probably be interesting to many people. I plan to hit some stores while I'm here and post comparisons.

 

[John P]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

I'm curious about the level of knowledge and training a typical chain store sales associate has in China, and whether it's comparable with here in North America. The overwhelming majority of sales associates I've dealt with don't have much (if any) training, and I can only infer it's because the typical consumer just doesn't know (or chooses not to find out) any better.

You raise an insightful question: This topic is a big reason I continue to speak here. In prior visits I've spoken about cut-quality differentiation, added value and e-commerce versus traditional models. This time I'm addressing current challenges across the industry and strategies for overcoming them: Continuing education and subject-matter expertise among salespeople is one of my main talking points.

You mentioned in your last thread that the Chinese market is more demanding of quality, notably with cut quality, and I wonder if that's forced stores to give better training to their sales team. For example, do they proactively offer the customer a loupe to see the stone? I personally have always had to ask for one.

No loupes. But, as with the USA, I'm sure that is more clarity-centric than cut-centric. There is more widespread knowledge about cut-quality but it's a by-product of China's relative newness to the market; they have always had a cut grade on lab reports. This means everyone knows what "Triple EX" is and everyone knows what "H&A" implies, but most salespeople probably can't tell you what the visual implications of 55/41.0/35.5 versus 58/40.6/33.5 are... Like it is in the USA, many jewelry salespeople were selling ladies' shoes or working at Starbucks a couple of weeks ago. In that sense the training challenges are similar.

What's positive is the word I'm getting from local colleagues on this trip reports that elements put forward on my prior visits have been successfully integrated by some sellers, and my audience will include folks who are ready for the next steps. As an educator this is exciting and motivating...I hope to communicate well tomorrow.

 

[Lula]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Hi, John -- I'm curious about the preference for "optically perfect" H&A stones -- stones that display a perfect H&A pattern. e.g., brands like the "Love Diamond" which are sold in other Asian countries. I believe in some Asian countries, the number 8 is auspicious, as is the star pattern, and high clarity. Is that the case in China?

 

[diamondloveaffair]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Big local players like Zbird are one of the pioneers leading the revolution for the online diamond industry in China. What do you think of their signature line of diamonds, Aurora http://www.zbird.com/mtedetail/list/s/bjgzt/?? Out of 10 diamond shoppers in China, how many percent of them get their stones in China instead of overseas?

 

[ame]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

What is popular there now style wise?

I know there was a big leaning towards DEF-FL/IF/VVS stones as well at the cost of cut quality, is that still going strong or is cut quality offsetting that a little?

 

[maccers]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Is there much interest in antique cut stones for e-rings? OECs, OMCs, rose cuts etc

I too would like to know what settings are in style in China.

ETA: And have a great trip! Thanks for offering up your services to PS-ers, once again!

 

[kenny]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Thanks John.

Which lab grades most diamonds sold in China?
Do our familiar labs have labs in China, GIA, AGS, EGL, IGI, Gubelin etc. ?

 

[Rockdiamond]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Kewl trip John!!!

Are you seeing a lot of interest in Fancy Colored Diamonds in China?

 

[astar11]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

In order to get 2 carat round diamond, is it cheaper in hk or US?

Is Chow Sang Sang and Chow Tai Fok price considered to be more expensive than US online retail?

Know the cheapest place to get diamond in hk ?

 

[OMG_AMG]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Ok, I'll play.

How do the diamond trends in China compare to that of Singapore? I know that in Singapore, many consumers tend to buy 1ct and under stones. Consumers in Singapore also place a lot of emphasis on cut quality; a popular vendor over there called Jann Paul sells a lot of super ideal cut H&A diamonds (rounds, Brellia's, radiants).

Would you say the market trends in China are comparable to that of Singapore?

 

[heididdl]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

love to hear all

 

[Dancing Fire]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

JP...how good is your mandarin?...

 

[chrono]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

JP...how good is your mandarin?...

Not just how good, but is the accent right?

I am definitely curious about how HK compares to the rest of China. I hear that sometimes, they are different even though it is now considered a single country. Comparison to Singapore would be great too.

 

[John P]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Hi, John -- I'm curious about the preference for "optically perfect" H&A stones -- stones that display a perfect H&A pattern. e.g., brands like the "Love Diamond" which are sold in other Asian countries. I believe in some Asian countries, the number 8 is auspicious, as is the star pattern, and high clarity. Is that the case in China?

Hi Lula.

Hearts & Arrows is a well-known aspect. As it relates to cut quality, a diamond with H&A is viewed the same way D is viewed in terms of color. H&A diamonds typically come with H&A-specific grading reports which have actual viewer photo imprints, so the proliferation and public awareness of H&A notably exceeds the USA.

There are also conceptual differences. Since H&A diamonds are largely graded on H&A-specific reports they're in a category of their own. You have G, VG, Triple-Ex and Ideal diamonds. Then you have H&A diamonds. So in the USA a seller might need to say "This diamond is Ideal, and it's also H&A." In China that would be redundant. The lab report says it's H&A, and to qualify for that report the diamond had to fall in a certain range of premium proportions... And while the labs here have somewhat varying standards there is definitely more consistency in the H&A category. Many diamonds sold as H&A in the USA wouldn't qualify for any H&A lab report in China.

The number 8 is absolutely considered a lucky number here. Up in Japan the bold arrows pattern of Eightstar Diamonds (a pioneer in "Superideal" cutting) used to be promoted as symbolic of the octagram of the I Ching and the Rinbo of Buddhism.

I don't see promotion like that in China with 57-facet H&A diamonds. There are companies manufacturing diamonds with 88 and 108 facets promoting the 8. Here is something people familiar with Chinese companies may find funny: One diamond company is cutting an 89 facet diamond, but heavily promoting it as having 88 facets. The marketing fine print says "88 facets, excluding table."

I see a lot of great inquiries above. I must run, but will post more later.

 

[John P]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Big local players like Zbird are one of the pioneers leading the revolution for the online diamond industry in China. What do you think of their signature line of diamonds, Aurora http://www.zbird.com/mtedetail/list/s/bjgzt/?????

Zbird is a smart, forward-thinking company. Their principals have attended my presentations in the past and yesterday Xu Xiaoxue, one of their senior managers, spent time with me after the talk.

I have not seen the Aurora line in-person but am confident that it's consistently high performing. You probably know that people in China don't make internet diamond purchases via click and ship...they select candidates and go to an "experience store" to make the final selection visually. I see Zbird working diligently to provide cut-quality information that can increase consumer confidence. To that end, they have recently introduced AGSL reports here, along with GemEx results. This is a significant move as AGS has been virtually unknown in China.

Here's a product page, where they link-to the AGS report verify site.
http://www.zbird.com/proexstyle/diamond/id/1188409/
And here is the corresponding report.
http://www.agslab.com/reportTypes/pldqr.php?StoneID=104063054009&Weight=1.610&D=1

No internet seller uses actual images yet. I imagine Zbird may be the one to lead that charge, if it's to happen.

Out of 10 diamond shoppers in China, how many percent of them get their stones in China instead of overseas?

It's hard to say. As I mentioned above, import laws here prevent individuals from ordering diamonds from sellers in other countries. Prices are lower in HK, and I'm told many people buy diamonds there and don't declare them upon return, but I don't know that number would be close to 1 in 10. My impression is that most Chinese in the diamond-buying demographic make their purchases here.

 

[diagem]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Hi John,
A question on your impression regarding fancy shapes and their demands from the mainland...
We are experiencing more demand in the fancy shaped arena coming out of the East (mainly HK).
Naturaly the world is becoming smaller with all the info on the WWW etc..., we are also hearing a spark in interests in old-cut/vintage designs.

Did you feel it as well?

 

[denverappraiser]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

I don't see promotion like that in China with 57-facet H&A diamonds. There are companies manufacturing diamonds with 88 and 108 facets promoting the 8. Here is something people familiar with Chinese companies may find funny: One diamond company is cutting an 89 facet diamond, but heavily promoting it as having 88 facets. The marketing fine print says "88 facets, excluding table."

I would think all of the eight fold symmetry of the Modern Round brilliant would be a shoe in for this sort of connection. 8 crown mains, 8 pavilion mains, 8 hearts, 8 arrows, octagonal table, etc. No?

 

[diagem]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

I don't see promotion like that in China with 57-facet H&A diamonds. There are companies manufacturing diamonds with 88 and 108 facets promoting the 8. Here is something people familiar with Chinese companies may find funny: One diamond company is cutting an 89 facet diamond, but heavily promoting it as having 88 facets. The marketing fine print says "88 facets, excluding table."

I would think all of the eight fold symmetry of the Modern Round brilliant would be a shoe in for this sort of connection. 8 crown mains, 8 pavilion mains, 8 hearts, 8 arrows, octagonal table, etc. No?

That would make the majority and some hold the same "lucky 8 charm"...

 

[John P]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

What is popular there now style wise?

Diamond settings are frequently kept simple. The trend of buyers is to put as much money into the diamond as they can. Some of this has to do with the perception of size and value; people worry that small diamonds will not keep their value. Simple solitaires are very popular for diamonds 0.30ct and higher. Upscale brands tend to offer more diverse fashion options, but even if you go to Cartier in China the majority of settings are simple, compared to their western offerings.

I know there was a big leaning towards DEF-FL/IF/VVS stones as well at the cost of cut quality, is that still going strong or is cut quality offsetting that a little?

The answer is different for different markets. In Shanghai, Beijing and similar big cities buyers choose higher grades to demonstrate their wealth. This implies F+ VS+ in terms of color and clarity and H&A in terms of cut. Less affluent areas tend to sell more "commercial goods", meaning G-J, SI and VG or EX. People looking at online sites seem to go for slightly higher colors and clarities as a matter of caution. Setting budgets/pricing aside, I believe there is a definite perception in China that higher colors and clarities will look (and feel) better.

 

[John P]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Is there much interest in antique cut stones for e-rings? OECs, OMCs, rose cuts etc

Almost none for antique cuts (I'll elaborate on this in a follow-up answer to DiaGem later). The numbers I hear from both manufacturers and labs here cite about 90% of all cuts as modern RB, followed by everything else, with princess cuts and proprietary makes - often rounds with extra facets - leading that small percentage.

ETA: And have a great trip! Thanks for offering up your services to PS-ers, once again!

My pleasure! Thank you for thanking.

 

[John P]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Thanks John.

Which lab grades most diamonds sold in China?
Do our familiar labs have labs in China, GIA, AGS, EGL, IGI, Gubelin etc. ?

Good topic. I wrote an overview in 2010 (link below) but can certainly elaborate.
https://www.pricescope.com/journal/china-rise-exploding-economy-fantastic-future-part-two

The NGTC, mentioned in the linked piece, has a kind of monopoly, since they are the national lab. As a result they issue around 70% of all grading reports in China. The majority are finished jewelry reports - not loose diamond. Since the Chinese government requires all jewelry sold to have lab certification this is a LOT of reports.

The GIA is in second place. Their reports often accompany manufactured diamonds coming into China and, since many consumers prefer foreign reports, they are widely known and accepted. They are limited however: Because GIA does not grade H&A they're also considered the "VG and Triple-EX" lab, not the lab for diamonds having the highest cut-quality.

IGI Hong Kong is third. They are considered much like AGS is in the USA (but grade far more diamonds): Strict for color and clarity but more elite in terms of cut focus. High end retail stores like Chow Sang Sang use IGI HK for their H&A lines, as does HK-based Tse Sui Luen (TSL). For those unfamiliar with TSL, they are much like Tiffany or Cartier, who use internally issued grading reports.

EGL retreated from grading in China but they still have a presence. As mentioned in the linked article above, many Chinese consumers prefer foreign reports... EGL will now issue a report, but they never see the diamond. How? They entered into a relationship with a Shanghai lab and now, if a jeweler wants to provide a "foreign report" for a diamond graded by that lab they order a duplicate EGL Asia report - and the Shanghai lab's data is just replicated on EGL paper.

HRD was in this market for some time but I believe they have disengaged.

There are abundant small Chinese labs, but I don't believe they can survive as the MMD detection issue becomes more publicized. Only the top international labs have such capabilities and the Chinese are quite sensitive to this topic.

 

[John P]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Kewl trip John!!!

Are you seeing a lot of interest in Fancy Colored Diamonds in China?

Hi David.

FCDs are a popular topic (if not widely purchased) and are gaining momentum. Flagship stores for Tiffany, Chow Sang Sang, etc. tend to have some in stock but other stores don't. At this time they are mainly sold in club meetings. These are meetings where (example) a bank has a list of VIP customers and organizes a reception in a hotel where those clients can come in to specifically view and buy FCDs.

The perception among Chinese diamantaires is that it's a late conception with great interest; predicted to gain steam as gaggles of rich people here get bored with their white diamonds and want to flash something different.

 

[ame]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Fascinating. I love this thread, every year I love this thread. It's just incredible even in a year what changes over there. THANK YOU for taking the time to answer all of our questions.

 

[John P]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Fascinating. I love this thread, every year I love this thread. It's just incredible even in a year what changes over there. THANK YOU for taking the time to answer all of our questions.

You're very welcome. It's a good exercise for me too, Ame.

Please forgive my delay in replying: I'm back in Texas and tending to desktop matters (and some time-adjustment).
I have read every post and will certainly return to comment.

 

[Dancing Fire]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

JP
What would be your guess on the avg size Ering in China today? Are they still shooting for the high clarity and color?

 

[kenny]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Yes, yes, yes, John, thank you so much for filling us in on the largest diamond market in the world.

Does China, being so huge, have lots of diamond mines?
What % of diamonds sold in China are imported?

 

[Lula]

Re: Any Qs/Interest in 2013 Chinese Diamond Market & Traditi

Fascinating. I love this thread, every year I love this thread. It's just incredible even in a year what changes over there. THANK YOU for taking the time to answer all of our questions.

+1
Thanks, John, for answering my questions about H&A and the significance of the number 8 in the Chinese market. Welcome back to the U.S.