Pearl merchants are busy hoarding goods, and Zhuji's pearl industry is booming against the trend: prices are doubling and rising
The pearls, rich in classical beauty, have attracted more and more fans. On the evening of Qixi Festival, the 71 year old "Pearl Grandma" did not broadcast until midnight, 2 hours later than usual. The live broadcast on that day was even more popular than before, and even at the last moment of the broadcast, there were still thousands of viewers online.
The real name of "Pearl Grandmother" is Yao Xiaofang. She is the first generation pearl merchant in Shanxiahu Town, Zhuji, Zhejiang, who has been dealing with pearls for a lifetime. This small town, with an area of less than 50 square kilometers, contributes 80% of the country's freshwater pearls and 70% of the world's freshwater pearls. Last year, the sales of pearl products exceeded 40 billion yuan. This year, the market for pearl jewelry has seen a surge in both quantity and price.
As the founder of Zhuji City Yao Xiaofang Grandmother Jewelry Co., Ltd., who has been in the pearl business for over 40 years, Yao Xiaofang has recently become popular in the market with the IP of "Pearl Grandmother". It is precisely because she stepped on the trend of live streaming e-commerce, and this trend has directly contributed to the popularity of this pearl town this year.
In front of Grandma Pearl's store, many customers are waiting for consultation.
Why is it so popular?
On August 23rd, a reporter from First Financial News walked into the East China International Jewelry City in Shanxia Lake. This jewelry city, built in 2008 and integrating pearl trading, brand display, and brand appraisal services, is currently the world's largest freshwater pearl trading center. Generally speaking, the afternoon and evening are the peak hours for procurement.
In the afternoon, the reporter did not see the hot scene of queuing up to grab goods, but almost every store was surrounded by buyers who carefully selected and filmed videos in groups of three or two. They are mostly young people with exquisite makeup, some are anchors, and some are purchasing agents.
"The market started to be popular from March to April this year, with the highest flow of people until June. It fell a bit in July, but it's still good now." Yao Xiaofang told First Financial that anyone who does pearl purchasing or live streaming will come here. This has led to a rapid increase in pearl sales and skyrocketing pearl prices. "This year, the prices of many pearl jewelry have more than doubled compared to last year, and baby pearls have even doubled.".
East China International Jewelry City. Photography/Miao Qi
A person in charge of Shanxiahu Town previously stated that the increase in pedestrian traffic in Jewelry City this year is tenfold. Due to a large number of customers flocking to the selection and exploration stores, they used to finish work at 7 pm, but now some stores don't close until midnight.
Over the past 40 years, from offline wholesale to live streaming sales, Yao Xiaofang has always been active on the front line of the market. Due to her sufficient understanding of pearls and her calm and natural attitude towards the camera, she has become a leading anchor in the current pearl segmentation field.
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In Yao Xiaofang's view, there are several reasons for the popularity of the pearl market. One reason is that during the epidemic, a large number of merchants who used to do wholesale business have switched to online and started the transformation of live streaming. This transformation has brought tremendous influence and publicity to the entire network, laying the foundation for this year's popularity. Secondly, in order to protect the water source, Zhuji has issued a strict ban on the cultivation of freshwater pearls in recent years, resulting in a significant reduction in the area of pearl cultivation, a decrease in raw material production, a shortage of supply and demand, and an unprecedented increase in prices.
In front of Grandma Pearl's store, many customers are waiting for consultation.
In addition, the Jewelry City itself has mature hardware supporting facilities and a relatively complete industrial chain. "Ordinary people who want to purchase pearls and products can buy anything as long as they come here, which cannot be done elsewhere.". Finally, of course, it cannot be separated from the celebrity's popularity in pearl fashion in film and television works; During the epidemic, there were also purchasing agents who were unable to travel abroad and flooded into the jewelry industry in large numbers. This year, they continued to focus on the hot topic of "cost free" sales, further increasing their popularity and prices.
Zhan Chaoqi, the general manager of Daisu Pearl, is a second-generation pearl merchant. His parents have been growing and raising clams since the 1990s, doing offline wholesale business. One year after he returned home to take over the business, the sales direction began to shift to live broadcasting, "2018 coincided with the active Internet live broadcasting". At present, the company has more than 10 anchors and 5 live streaming rooms, which can basically cover 24 hours of live streaming.
"At present, the annual revenue of live streaming can reach 30 million yuan, and the highest daily revenue can reach over 100000 yuan." Zhan Chaoqi told First Financial that in the past few years, their annual sales have been increasing, and they have also witnessed the continuous rise in pearl prices. "The overall sales volume cannot be compared to before, it has not doubled.". The heat of the market has overturned the imagination of the previous generation and opened up a young e-commerce era for the Shanxiahu pearl industry.
As the first generation pearl merchant, Ge Quancan, the person in charge of Silver Round Pearl, also told First Financial that the sales situation of pearls was good during the epidemic period, and this year is even better than during the epidemic period. At the same time as the price of pearls is rising, the upstream procurement prices are also rising. Therefore, for them, the current trend of active sales supports their current situation of "high in, high out" and increasing hoarding.
How long can it last to become popular?
Although the domestic market is booming due to live streaming e-commerce, the tricks behind it and the increasingly high costs have made competition increasingly fierce.
Yao Xiaofang was one of the early ones to enter e-commerce live streaming. "Basically, she has tried all the e-commerce platforms and stepped through many pitfalls," and finally found her own model.
In addition to basic language design and operational skills, the "Pearl Grandmother" who has been waiting for decades has chosen to take the brand route, establishing consumer trust through experienced and knowledgeable IP personas, while also attempting to control quality through refined operations. In addition to the domestic market, Yao Xiaofang's pearls have also been sold overseas through platforms such as Xiaohongshu.
In the context of both domestic and external demand shrinking, there are two paths: domestic sales and exports, and different people have made different choices based on different resources and judgments.
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Zhuang Lulu, the person in charge of Shaoxing Wanrun Jewelry Co., Ltd., has shifted the focus of sales from the domestic market to exports. Despite the contraction of external demand, she believes that compared to internal competition, there is still more space abroad, and cross-border e-commerce is still thriving in the European and American markets.
"At first, it could sell for over 100000 US dollars a month, but now it can sell for 300000 US dollars, almost doubling." Zhuang Lulu told First Financial that through platforms such as Tiktok, they formed a live streaming team of more than ten people and directly sold the pearls from Shanxiahu to overseas consumers mainly in Europe and America. However, compared to the epidemic period, the export business in the first half of this year has declined slightly, and it is expected to return to growth in September. Considering the acceptance of overseas markets, they currently focus on exporting mid to low-end pearl jewelry. Next, they will innovate their models and prepare to establish overseas warehouses to further increase logistics and service efficiency and explore more diverse markets.
In addition to the competitive challenges of the industry itself, talent has always been a major weakness in this small town.
With the large-scale transformation of pearl merchants towards live streaming e-commerce, this highly concentrated jewelry industry base is attracting more and more entrepreneurs. According to incomplete statistics, the sales of pearls in Shanxiahu Town, Zhuji in 2022 exceeded 40 billion yuan, with live streaming sales reaching 25 billion yuan. Since the beginning of this year, as of the end of May, the sales of local pearl products have reached 23.2 billion yuan. 3500 e-commerce anchors and 28000 pearl related practitioners gathered in the Shanxia Lake, which covers an area of only 42.56 square kilometers.
However, in Yao Xiaofang's view, there are very few comprehensive talents who understand both jewelry and e-commerce, and it takes time to cultivate them. As a county-level city, Zhuji itself is not as talented as Hangzhou and Shanghai, let alone Shanxiahu Town.
Yu Lingjun, Secretary of the Party Committee of Shanxiahu Town, said that if we want to keep going, we need to turn small pearls into big industries. The distribution of talent cards, supporting high-end hardware facilities, and strengthening public services are efforts being made by Shanxiahu.
The upward trend has directly pushed up the local rental cost of Shanxiahu. A merchant who has been operating in the jewelry city for many years admitted that the rental prices of market-oriented jewelry city stores continue to rise, and the current rent has more than doubled compared to before. "What was earned in the first half of the year may have to be sold out.".
"The epidemic has facilitated the takeoff of this industry, but no one knows how long it can last," said Yao Xiaofang.
Breakthrough at both ends of the industrial chain
To truly turn small pearls into a big industry, both the sales and supply sides require greater imagination and innovation.
On the one hand, pearl jewelry for riding the e-commerce express needs to continuously increase added value through design and branding, while the extension industry of pearls also needs to be more diverse and in-depth; On the other hand, the area of pearl farming has significantly decreased compared to the past, and it is necessary to increase production through technological innovation.
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With the booming pearl market, the pearl extension industry is inevitably affected.
As the second generation of pearl merchants, He Yandong began to deal with pearl powder at the age of 16. In 2005, he founded Zhuji Sanyan Pearl Co., Ltd., producing medicinal pearls and mother of pearl. In order to expand new sales channels, he began to become a pearl supplier for Hu Qingyu Tang and Qingchun Bao.
As a director of Zhejiang Huqingyutang Herbal Medicine Co., Ltd., He Yandong told First Financial that the booming jewelry market has led to a continuous increase in the purchase price of pearls. "During the epidemic, the price per kilogram was about 160 yuan, which has exceeded 300 yuan this year." However, it is difficult for medicinal pearls to increase in price with it, which puts them under higher cost pressure and thinner profits.
Besides the current profit challenge, the more challenging one is the supply of pearls. Against the backdrop of a significant contraction in the overall supply of pearls due to environmental requirements, He Yandong proposed that medicinal pearls must use non nucleated pearls, while pearl jewelry often uses nucleated pearls. Nowadays, pearl jewelry is booming, and the proportion of farmers cultivating nucleated pearls is rapidly increasing. The scale of non nucleated pearls is further decreasing. "Previously, nucleated and non nucleated pearls were half and a half, but now nucleated pearls are several times more numerous than non nucleated pearls.". This means that the supply of medicinal pearls is insufficient, while the supply of pearl jewelry may be surplus.
The pearl breeding base, which applies new technologies, boasts picturesque mountains and rivers. Photography/Miao Qi
In the long run, with limited aquaculture area, the supply side has high expectations from pearl merchants, including He Yandong, to expand pearl production through technological innovation.
Ren Kezhuan, the General Manager of Zhejiang Qinghu Holdings Group Co., Ltd., is one of the innovators attempting to change the extensive cultivation of pearls. Through the application of new breeding technologies, he has also achieved a significant increase in pearl production.
"Previously, only 1000-1500 clams could be raised per acre, but now 10000 clams can be raised per acre, increasing production by nearly 10 times." Ren Kezhuan told First Financial that using traditional breeding methods would have bottlenecks in the density of pearl cultivation. "If there are more oysters, the demand for algae will increase, and the water quality will not be good." However, using new targeted clam breeding equipment and technology is equivalent to accurately feeding clams, which can cut off pollution at the root and significantly improve breeding efficiency. "This year's output value can reach 200000 yuan per acre.".
In Ren Kezhuan's view, pearl farming and water management are not only not contradictory, but also mutually reinforcing. "Pearl farming can actually control water because the main food for river clams is algae, which can reduce eutrophication pollution in rivers.". This is also why precise and moderate feeding can keep the water quality below Class IV water. "The water used to need to be changed, but now it doesn't need to be changed for more than 30 years.".
With the gradual maturity of technological applications, in 2018, the technology they developed was highly recommended in Zhejiang Province, resolving the long-standing contradiction between pearl farming and water body protection. "The water management business is likely to surpass the aquaculture business in the future.".
At present, Ren Kezhuan has an area of 800 acres of pearl aquaculture water in Shanxia Lake, accounting for about one-fifth of the area of pearl aquaculture water in Shanxia Lake. They are helping to control urban river pollution through new aquaculture technologies while also extending the pearl industry chain. "We plan to start opening clams this year and develop the entire industry chain, including pearl processing.".
![Pearl merchants are busy hoarding goods, and Zhuji's pearl industry is booming against the trend: prices are doubling and rising](https://a5qu.com/upload/images/b47d58265e19326a3dfb5506f318641d.jpg)
The extension and innovation efforts of pearl farmers and pearl merchants are also a microcosm of Zhuji Pearl's transformation from a rural small lake to a billion dollar industry and international market amidst market fluctuations.