Does the Cannes Film Festival drive the export of Chinese gemstones? Gems | Foreign Trade | Export

The Cannes International Film Festival held in late May shone with stars, sparking a wave of gem consumption in overseas markets and quickly spreading to China's foreign trade industry. According to data from Alibaba International, a B2B cross-border e-commerce platform in China, the transaction volume of jewelry products tripled year-on-year in the last week of May.

This news made foreign trade expert Chen Haijin feel a hint of warmth during the off-season in June. "This small fluctuation will give people hope and confidence.".

As a renowned exporter of gemstone jewelry in Wuzhou, Guangxi, Chen Haijin, the head of Guangxi Foxi Jewelry Co., Ltd., told First Financial that he did not directly feel the obvious improvement in orders, but he needed such good news more than ever during the super off-season of shrinking external demand, especially in April when orders plummeted by half year-on-year.

For Huang Chunlin, the founder of Guangxi Wuzhou Diamond Jewelry Co., Ltd., the expected recovery growth in orders this year is expected with the opening up of domestic and international markets. He told First Financial that the current foreign trade orders have increased by 20% compared to last year, with the highest growth rate in the past five years for Mosang stone related jewelry. The reasons behind this are not only the company's continuous efforts to improve its products and increase added value, but also the fact that the machinery and equipment on the raw material end have not kept up, resulting in a wave of market rise due to supply shortage.

Although China's export growth rate returned to double digits in the first four months, foreign trade growth has recently declined. On June 7th, the General Administration of Customs released data showing that in the first five months of this year, China's total import and export value increased by 4.7% year-on-year, with export growth rate falling back to single digits at 8.1%. In May, monthly exports decreased by 0.8%, and the growth rate fell back to negative for the first time this year.

During the downward period of overall pressure on foreign trade, market fluctuations in segmented sectors have brought hope and possibilities to foreign traders.

The main driving force lies in the continuous upgrading of products

During the period of contraction in external demand, the overall import and export of gemstones this year have shown double-digit growth against the trend.

The General Administration of Customs released the "Table of Total Value of Import and Export Commodities", which shows that in Chinese yuan, the categories of "natural or cultured pearls, gemstones or semi precious stones, precious metals, precious metal packaging and their products; imitation jewelry; coins" exported 65.95 billion yuan in the first four months of this year, a year-on-year increase of 36%, and imported 280.86 billion yuan, a year-on-year increase of 90.6%; In US dollars, exports increased by 26.3% year-on-year and imports increased by 77.4%.

Huang Chunlin believes that the global economic downturn has led consumers to pay more attention to cost-effectiveness, which has instead created a greater market demand for artificial gemstones, which are priced at only one tenth of natural gemstones. In addition, with the market promotion in the past few years, the overseas market has become increasingly aware and accepting of products such as artificial mosonite this year. This has allowed them to maintain double-digit growth in orders this year.

However, the greater motivation lies in the continuous upgrading of products. "If the product is not upgraded and the added value is not high, even if the order volume is large, the overall amount will not be high." Huang Chunlin said that since 2021, the unit price of the gemstone jewelry they produce has continued to rise, such as converting the silver jewelry in the original jewelry into K-gold, upgrading the artificial pickaxe stone into artificial mosonite, and even more high-end CVD diamond products. This has doubled the company's overall export value in the past three years.

As a gathering place for the artificial gemstone processing industry, Wuzhou, Guangxi currently has over 120000 gemstone processing personnel, with an annual processing quantity of approximately 12.6 billion gemstones, accounting for about 80% of China's and about 70% of the world's total. This makes Huang Chunlin and Chen Haijin, who have been engaged in gemstone processing, manufacturing, and trade in Wuzhou for decades, quite representative.

Although feeling the downward pressure on the entire industry, Chen Haijin believes that after years of expansion and improvement, the overall year-on-year situation this year can at least remain unchanged from last year. For small and medium-sized enterprises, a sudden increase in orders may also lead to a breakthrough in export value exceeding 100 million or a significant surge.

The current situation of foreign traders is not optimistic, and they have not lost confidence. Chen Haijin said that in the past few years, they have been expanding their team every year, and this year's strategy is to maintain the existing scale, while optimizing the factory environment, continuously improving production efficiency and quick response ability. "After all, our company is still in the growth stage, and it may increase significantly by the end of the year when we take one or two orders.".

Although the current order volume is not large, Chen Haijin's company has 40-50 foreign trade personnel and 6 subsidiaries, each of which has established stores with different positioning on Alibaba International Station. At the same time, there are factories with more than 100 workers and design teams. "The basic skills are solid, and the outbreak is still very fast.".

According to data from Alibaba International, the overseas traffic of gem merchants on the platform increased by 36% year-on-year in the first quarter of this year.

Huang Chunlin also relies on investment in cross-border e-commerce platforms and attention to overseas social media to timely obtain information on trendy and popular products, and updates styles through rapid reactions on the factory side, timely responding to market diversification feedback and customization needs. According to his observation, 70% of orders now require personalized customization, and the demand for artificial gemstones varies greatly among consumers in different markets. For example, Middle Eastern people like to put family portraits in gemstone pendants, Americans like large carat gemstones, and even buyers require gemstones to be set on shoes.

They have opened cross-border live streaming and 3D model rooms on the international site, and through digital technology, overseas buyers can see the effect of gemstones without leaving their homes, improving communication efficiency.

Of course, offline exhibitions are still irreplaceable. Currently, half of Huang Chunlin's exports are in the United States, 30% are in Europe, and 20% are in Southeast Asia and other regions. He has already participated in the exhibition in the United States and Hong Kong, China this year. Next, he plans to go to Bangkok, Thailand and other places, and increasingly explore the "the Belt and Road" market. For him, in the years since the outbreak of the epidemic, although the US market has declined this year, it is still a good year. Mosangshi's orders have maintained double-digit growth, and the company has set a target of 40% growth this year. However, it is difficult to predict whether it will recover to pre pandemic levels.

Highlighting the advantages of quick returns for small orders

Faced with the challenge of economic downturn and the trend of industrial transfer, continuing to cultivate internal skills and increase the competitiveness of products and teams has become a more focused topic for foreign trade professionals.

Huang Chunlin and Chen Haijin are both foreign traders who have self built factories in Wuzhou, and are also beneficiaries of the local artificial gemstone processing and production agglomeration and upgrading.

"When I came here, it was all manual production here, and now it's fully automated." Huang Chunlin came to Wuzhou 30 years ago to work and founded his own company in 2000. He first worked as a contract manufacturer for domestic foreign trade, then entered the foreign trade field, and early laid out cross-border e-commerce. In 2017, they switched from semi-finished artificial gemstones to synthetic gemstones and began designing and processing them to create diverse jewelry products. As a result, they still saw a rapid increase in orders during the pandemic.

Generally speaking, in addition to the local area of Wuzhou, they will also purchase raw materials such as Mosang stone and artificial pickaxe stone from Henan, Shandong, and other places, and then concentrate on processing and production in Wuzhou before selling them globally. Due to the high concentration of industries, low costs and high flexibility have become their main advantages.

"The United States also produces artificial Mosonite jewelry, but our prices can be 50% to 60% lower than theirs, and delivery times are also faster." Huang Chunlin believes that industrial agglomeration and complete supporting facilities require time and cannot be transferred in the short term. What they need to do is to continuously improve their customization capabilities, meet customer needs with lower costs and faster time.

With the increasing fragmentation of foreign trade orders, fast returns for small orders have become a major trend. "The faster the delivery is made, the faster the customer returns the order." Chen Haijin said that in the past, customers would purchase goods once a year every six months, but now they often place orders once a month. Not only do they place separate orders, but the design often needs to be changed. Due to having their own factories, they can meet customers' customization and quick return needs at any time. Some large orders are not made in time overseas, so they have to rush to domestic factories to place them.

In addition to his quick response ability, Chen Haijin will also maintain timely communication with overseas customers and provide free samples to increase their enthusiasm for placing orders.

Chen Haijin believes that even with the recent decline in the US market and the rise in the Southeast Asian market, product upgrading is still a direction that needs to be worked on. However, whether it is high-end or low-end products, there is still considerable demand. "There are times of decline and rise in any market, and if you can't see it clearly, don't give up easily. One day, there may be another outbreak, and if you give up now, you may not be able to keep up with the opportunity.". For this reason, he is still persistently promoting in multiple regions and categories. "When everyone gives up, I actually think we can stick to it a little longer.".