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Belgian firm to manufacture diamonds and retail jewellery in China

Tuesday, 11th January 2005
Source: Jewelry News Asia, January 2005

As the world's fastest growing economy, China offers very strong growth opportunities for both domestic and multinational companies, and among those seeking to gain a market share is Antwerp-based diamond manufacturer Exelco NV.

This year, the company will open a diamond-polishing factory in the mainland, manufacturing smaller goods of six per carat up to 20 per carat featuring the company's renowned hearts-and-arrows make, said founding partner Jean Paul Tolkowsky.

Aside from manufacturing diamonds in the mainland, the company also plans to manufacture jewellery in the same factory and sell the production locally. "We want to be in China because it is a big market and the labour is good. Having a Chinese workforce will help us understand the market better. I also think that Chinese consumers prefer jewellery that is perhaps made by foreigners but is made in China," said Mr Tolkowsky.

In establishing its jewellery retail operation in China - its first outside Japan -- Exelco will adopt the business model that has gained for the company a strong foothold in the Japanese market, where it now has 40 shops.

"In Japan we are a market leader. We want to be a market leader in China as well. We have a team of designers taking care of the full range of jewellery for the whole of Japan. We will have the same in China. We also want to be in the best locations, as we are in Japan. We will not just go into a city and open a store: rather, we will do market research, making sure we offer what consumers are looking for," he said.

"We think that's what is special about our company," added Lior Kunstler, also a founding partner at the company. "We think that our company has to innovate and raise the level in our chosen market and be at the forefront of technology, producing the best product in the most cost-efficient manner. A chain is as strong as its weakest link, so we want to make our links very strong."

While Exelco will retail the same style of jewellery with the same make of diamonds in the China market, in colour and qualities the goods will be smaller, off-white but very clean - a bit different from the Japanese market, Mr Tolkowsky said. "In Japan the retail price range for an engagement ring is from around US$2,900 up to US$4,800. In our stores they sell from US$3,800 to US$7,600, because we are at the higher end. In China our jewellery will retail from US$800 up."

Similarly to the Japanese market, Exelco will focus on the Gift of Love segment, targeting engaged couples. "This is really our strength," said Mr Tolkowsky.

Exelco intends to expand its jewellery stores all over Asia within the next five years. "We plan to open stores in Shanghai, then Hong Kong and Beijing, as well as in Taiwan, Singapore and South Korea. We believe we can do the same in other countries as in Japan because we understand the Asian market. We have the right goods for the right market," said Mr Tolkowsky.

Mr Kunstler added: "We are looking at Asia for our main vision for growth. We believe, like everybody else, that Asia is the market of the future. We are seeing that today already: that's why we are concentrating on this market."