Where is the jade industry road?

After ten years of rapid development and five years of sluggishness, today's jade industry is at a critical moment of transformation and reshuffle. More than a decade ago, the industry's grand scene, which was won by policy dividends, imbalance between supply and demand, and information asymmetry, is hard to reproduce in our visible future. Time has passed, and today's jade industry is facing ever-changing challenges.

A Brief Analysis of the Roots of Jadeite's "Golden Decade"

In the jade industry, many people miss the industry scene from 2003 to 2012. The price of the original stone auction has hit record highs, the retail price has changed with each passing day, and a large amount of hot money has poured into the jade industry. Regrettably, the centuries-old grandeur that has benefited from economic development, policy guidance, cultural needs, social changes, and public opinion orientation has become a history that is difficult to replicate.

From a macro perspective, the industry's prosperity at that time benefited from the following effects:

1. A special historical background. At that time, when the national economy was developing steadily, the people were full of confidence in the future. Excessive currency generates inflationary pressures. Excess funds allow investors to rush to find channels for investment and consumption, and real estate and luxury goods consumption are rapidly developing.

2. Industry development is in the growth stage. After more than half a century of jewelry consumption faults, the jade in the eyes of ordinary consumers seems to be covered with a mysterious veil, and the desire to have consumption has given birth to the market.

3. The transformation of national cultural needs. Economic development has made the people turn from eating and wearing material appeals to spiritual level, and collection has become popular. Jade jewelry is favored as an entry-level art and culture product.

At the micro level:

1. Unbalanced supply and demand. The origin of jade is not in China, and supply is subject to many restrictions. After limited raw materials enter China, it is difficult to meet the huge domestic market demand. The price of jadeite is at the peak of growth, with a monthly increase of 30-40%. The increase once again affects national expectations, and greed makes its price continue to be irrational.

2. Investing blindly. High profits have attracted investors from all walks of life, and the most representative gambling stone once triggered an investment boom. Many consumers who are blindly investing in the purpose of maintaining value and increasing value have suffered from the lack of a perfect secondary market in the industry. It is difficult to realize the withdrawal in time. Many investors still have a large amount of raw materials or finished products. According to reports, in the past five years, practitioners have withdrawn a lot, and only Ruili has reduced 50,000 to 100,000 people.

3. Public opinion is misleading. There are too many links in the jade industry, the information is seriously asymmetrical, and the in-depth and comprehensive media reports mislead investors to think that this is a profiteering industry. As a result, many people have come to fame and come.

4. Consumers lack professional jade knowledge. Many consumers have very limited understanding of jade, and most of them are consumed after the hearsay.

In summary, there are too many irrational factors contributing to the golden decade of the jade industry. Nowadays, time has pierced the “bubble phenomenon” caused by investment, speculation and soaring, and the market has gradually returned to rationality. In the foreseeable future, it is difficult to reproduce in the foreseeable future.

Current status of the jade industry

Obviously, the current jade market is generally shrinking. Whether it is raw materials, finished products, or practitioners and sales. The data shown in the 2017 industry white paper was reduced by 60%. The reasons for this situation are not only the impact of the economic environment, but also the factors of the industry itself:

The macro level reasons:

1, the product is suddenly reduced

The market has seen a decline, and the Myanmar government has controlled the export of raw materials, resulting in a decrease in the amount of raw materials and a decrease in quality. After limited bidding, only 20% of the raw materials flow into the market to make finished products, while others continue to circulate internally, resulting in “internal heat and cold outside”: the inside looks hot, but in fact, they are busy cooking raw materials, and the finished products in the market are more The less you come.

2. Flattening profits

In recent years, several levels of raw material wholesale to the end market have been opened one by one, and profits have been compressed. Especially in recent years, the use of emerging sales methods such as e-commerce, micro-business, and live broadcast has had a big impact on the traditional market, resulting in further thinning of profits.

3. Loss of industry integrity

The jade industry, which used to be a good credit, is now unpopular. In Guangzhou, Yunnan, and Beijing, there have been many cases of borrowing and running, and individual practitioners have run because of the break of the capital chain. At the same time, the market downturn has caused many practitioners to start selling old goods at a loss, and the price system in the industry is very chaotic. The malformed competition behaviors are endless, some people swear by customers, some people falsify, and others maliciously smash their peers, causing a lot of internal friction. These untrustworthy behaviors have significantly reduced the interaction of borrowing in the industry, and the credit system has been affected, which has restricted the development of the industry to some extent.

4. Insufficient innovation power

Jade products are limited by raw materials and are difficult to become standardized products. Therefore, few people apply for appearance patents, resulting in the protection of original products, and the lack of innovation and motivation of practitioners. Among them, the new sales channel has weak capabilities: on the one hand, most of the employees have limited cultural quality, and their ability to adapt to new sales channels is weak, which cannot keep up with the times; on the other hand, the market changes too fast, from e-commerce to micro-business to live broadcast. The window period is only a few months, and the cost of innovation is too high. In terms of model, most of the merchants in the market choose the cooperation mode of heating up and sharing risks in the upstream and downstream groups. Innovation requires all participation and the communication cost is too high.

At the micro level:

1. Lack of user thinking: Many jade practitioners are born of craftsmen, passed on by masters and apprentices, outdated sales concepts, lack of user thinking, low commercial literacy, and the phenomenon that consumer demand is out of line with existing types of goods.

2. Changes in hot-selling varieties: High-selling goods are basically stagnant. The original price of millions of jadeites, which are mostly used for investment and gift-giving, is now basically stagnant. The small price of the color goods is relatively hot, and the decoration needs to be sustained but significantly reduced. Driven by the interests, there have been many opportunistic methods in the market, such as using "thin parallel imports" and "forever Chu" to pretend to be high. Emeralds without color are now basically in the cold of sales.

3, the main changes in consumption have changed: First, the aesthetic fatigue of consumers. The people who love jade have basically met the demand, there is no innovative product to stimulate them to generate new buying desires; the second is that the main consumer and channels have changed. After five years of market downturn, consumer demand and aesthetic needs have changed a lot, and the channels and methods of consumption have also changed.

Where is the jade industry road?

The author believes that in the future, China's economy will face a long-term "L-shaped" development trend, and will undergo structural adjustment. During the period, the industry in the window period is developing rapidly, but the competition is fierce; some industries, especially the traditional industries, are facing transformation. The crisis of upgrading.

The jade industry belongs to the industry of “slow heat and cold”. That is to say, after the economic boom, it was the turn of the jade; and before the economic decline, it was one of the first suppressed consumption. The jade industry is also a non-marketing industry with a multi-market structure that is separated from country, cross-industry chain, cross-culture, raw materials and consumption. A number of reasons have determined that the development tone of Jade in the next few years is: moderate shrinkage.

What do we encounter in the future, and what do we need to do?

Macro aspect:

1. Information system construction

Information asymmetry is the biggest old trait in the jade industry. After establishing a symmetrical information platform and a reliable merchant reputation system, consumers will purchase the collection more confidently. The completion of the finished auction market and the Jade secondary market, the establishment of high-end information systems and archives will promote the trade of decorative jade and investment jade.

2. Industry chain integration

The jadeite industry chain is long and complex. Raw material auctions, semi-finished products and engraving processing are in several markets in Myanmar and China respectively. The wholesale of finished products is mainly concentrated in several markets in Guangdong, and retail sales are blooming. The existence targets of each market are different, the policy environment is different, and the influencing factors from suppliers, processing countries and consumer countries are unpredictable. In the future, the jade industry needs to try to shorten the industrial chain, such as establishing cross-border jade-free raw materials and processing zones in the country, so as to reduce the impact from the external market and achieve sustainable and healthy development of the industry.

3. Improve the tax system

I hope that the current jade tax system can be improved according to the development of the times. The degree of perfection of the tax system can directly affect the participation of capital in the jade industry and is very important to the development of the industry.

4, make a big industry cake

If you want the jade market to no longer shrink, you need to make big industry cakes, such as promoting aesthetic education on a large scale, focusing on the integration of cultural connotations; encouraging and protecting business innovation, guiding and helping businesses to adapt to the pace of consumer upgrades, from products, Innovate in channels, models, and services; standardize the bidding system, reduce the speculation of semi-finished products, encourage the creation and circulation of finished products, and guarantee and support from the system.

On the micro level, practitioners can:

1. Change ideas

Jade practitioners must face market changes:

(1) The era of low profits has arrived. Only when you are down to earth, you can make a business and do it carefully.

(2) Have a user's thinking, think about product design and development from the customer's point of view, and do a good customer experience and after-sales service.

(3) To improve the aesthetic level and create the beauty of the product.

(4) Pay attention to inventory management and increase the cash turnover cycle.

(5) Pay attention to brand building and implement credibility construction as a corporate strategy.

(6) The fragmentation of jade sales channels will be the future trend. Using new media platforms to create diversified sales channels and forms that meet the new consumer power will be the decisive factor for growth.

2, return to the product

The more the market changes, the more important the product is. When the market homogeneity is serious, the trend of jade, personalization and art will be more obvious. The just-needed products that create marketable goods are the driving force for the continued growth of the business. Marriage, faith, gratitude and so on will just lead to sustainable consumption in the market. demand.

3. Active innovation

Actively innovate based on the existing resources of the merchants, and integrate and innovate from the aspects of modes, channels, products and services. In the future, jadeite will exhibit structural unevenness, which requires businesses to find the right entry point, keep up with the market rhythm, and be good at using new technologies and tools such as 3D, innovative craftsmanship and styles to keep up with the pace of the market. For example, personalization, micro-distribution, IP-licensed management, jewelry sharing, cross-border cooperation of online red stars, personal designer brands, private studios, live broadcasts, online stores and other emerging business changes require timely innovation and follow-up by practitioners. .

4, the customer is deeply ploughing

First, businesses need to do a good job in the existing market, put the service first, maintain important customers, and manage customers in a targeted manner. The second is to distinguish the demand difference between investment and consumption, decorative consumption, gift-giving consumption and religious spiritual consumption, launch services for different markets, and in-depth create mining demand.

5, create a core advantage

Facing the future, fostering energy. The establishment of core advantages is the basis for the development of enterprises, such as process advantages, channel advantages, and mode advantages. Companies with competitive advantages will go further.

In summary, the status quo of the jade industry is not optimistic, and the prospects have yet to be explored. Under the background of China's 8000-year jade culture, jade is a traditional industry; with the focus on the needs of consumers, jade is a cultural and creative product with unlimited innovation space. How to make clever use of the cultural background of jade and discover the needs of creating consumers' aesthetics, gifts, transshipment, collection, investment, etc. is a work worthy of all practitioners to think deeply.

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