Doing business in China: “Pakistan” the IP of Pakistani gem companies
by Chen Jiaqi, Wang Xiaotong
SHANGHAI, Nov. 8 (China Economic Net) – Building brands, selling goods of high quality and reasonable price, co-working with China to design and produce - Pakistani gem products have embarked on a different path of development in the Chinese market ever since the second phase of Pakistan-China Free Trade Agreement (FTA-II) came into effect and the two countries deepened economic and trade cooperation.
High quality + brand: Pakistan is‘Intellectual Property’ (IP)
"I use high quality raw stones and high standards of workmanship to make jewelry, providing consumers the best," Aqeel Ahmed Chaudhry, founder of WINZA from Pakistani gemstone firm Cosmo Enterprises PvT. Ltd. - located in pavilion 6.2 of the third China International Import Expo (CIIE) - told China Economic Net.
Aqeel Ahmed Chaudhry, who has been living in China for more than a decade, launched WINZA jewelry store in Shanghai's glitzy business district, producing crowns for champions of International Super Model Contest, Miss Earth and other competitions. Seeking a foothold in the increasingly competitive jewelry market, Aqeel Ahmed Chaudhry has his own strategy.
Aqeel Ahmed Chaudhry, founder of WINZA from Pakistani gemstone firm Cosmo Enterprises PvT. Ltd. in an interview with Economic Daily·China Economic Net. [Photo/Wang Zhongqiang]
First, says Aqeel Ahmed Chaudhry, is to build a brand. “80% of the establishment of a brand depends on people and 20% on products. Branding is not only about selling things, but also about inheritance, which requires our team to make gems with high quality and high standards, and inject family culture into the inheritance from generation to generation. Our products are designed by my younger sister and 4 Chinese designers.”
“The second point is the strict selection of raw materials. We select the highest quality raw stone which must be natural, clean and of beautiful color; then we purchase them with high price. Third, high standards of production, control of materials, design, etc. must be adopted. We dare to compete with the world's big brands. Although our company is small, the quantity of products is limited, but it does not mean that the quality is poorer than others," he added.
Pakistani emeralds and rubies of WINZA from Pakistani gemstone firm Cosmo Enterprises PvT. Ltd. [Photo/Wang Zhongqiang]
For example, in the raw materials selection, Aqeel Ahmed Chaudhry details that Pakistan's SWAT mining area is rich in emeralds, also known as Himalayan emeralds. There are about 200 small mines and six large mines in SWAT, which produces about 4% of the world's emeralds. "Only high quality emeralds produced in the SWAT mining area can reach the rating of “chrome green” of International Gemological Institute (IGI). And the production of chrome green in Pakistan is very limited, with an annual production of 5,000 to 10,000 carats."
Aqeel Ahmed Chaudhry, founder of WINZA from Pakistani gemstone firm Cosmo Enterprises PvT. Ltd., introduces his products to Chinese buyers. [Photo/Wang Zhongqiang]
At present, the company's main business is in China. “We import raw materials from Pakistan, Sri Lanka and other countries, and process and sell them in China.” Touching on the sales of Pakistani gems in China, Chaudhry said that Pakistani ruby sales in China increased by about 30% over the previous year. Although the sales of emeralds are not as good as rubies, they are unique to Pakistan and we want to promote them more, he added. Chaudhry, also the director of the Jewelry Committee of Shanghai Mineral Fossil Association, wants to bring Pakistani jewelry culture to more people. "Pakistan is our IP; we want more people to know our country."
He said that next year, he plans to open another 2-3 retail stores in China, and plans to open 20 retail stores in Beijing, Shanghai, Guangdong, Shenzhen and other big cities in the next five years.
Chinese people prefer tourmaline; Pakistani gems 25%-30% cheaper
In addition to relying on the brand strategy of climbing up the value chain, winning with cost performance is another path explored by Pakistani gems enterprises.
"We’ll take this," a Chinese buyer said at booth 6.2 of Pakistan Gem Pavilion during the CIIE. The Chinese buyer told Economic Daily·China Economic Net that the jewelry products purchased from last year’s CIIE were good. This time he specially bought one piece for his wife. He thinks that Pakistani tourmaline has both favorable price and good quality. "The tourmaline with good quality sold for more than RMB 10,000 at other booths, while our Pakistani brother sold this one for only RMB 2,000, it’s with relatively few impurities,” the buyer said.
Pakistani tourmaline bought by Chinese purchaser. [Photo/Chen Jiaqi]
"Chinese people prefer colorful tourmaline. This is the third time that we’ve attended CIIE. I saw the potential of gem products in the Chinese market when I attended the first CIIE and decided to participate in the second and third sessions,”Faizan Ahmed from Shakeeb Gems told Economic Daily·China Economic Net.
Faizan Ahmed in the interview with China Economic Net. [Photo/Wang Zhongqiang]
Faizan said he made RMB 70,000 in sales during the six-day CIIE last year. "More importantly, we have gained potential customers and signed memorandums of cooperation with three purchasers." He said that since 2006, the company's sales in the Chinese market have been increasing year by year, doubling from USD 30,000 in 2006 to USD 60,000 last year.
Pakistani tourmaline bracelet at CIIE. [Photo/Wang Zhongqiang]
This time Faizan brought Pakistan’s tourmaline, lapis lazuli, garnet, sapphire, ruby and other products to the expo. Speaking of the advantages of Pakistani gem products, he said that Pakistani products are handmade and the price is about 25%-30% cheaper than that in the Chinese market. Second, the CPFTA Phase II reduces Pakistan’s gemstones export tariff from 17%-32% to zero, which brings benefits to Pakistan's gemstone exports. Third, with many years of experience in gem sales in China, they have a better understanding of Chinese culture and consumer preferences, and can provide customization according to the needs of Chinese buyers.