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Most people see great potential in the growth of LGD jewelry market

20 june 2022

wayne_wang_xx.pngCurrently Wayne Wang-Wang Yichun is the General Manager, LUSANT - Incubation Project Management Department of Yuyuan Jewelry Co., Ltd. He was the General Manager of Shanghai Yuyuan Jewelry Co., Ltd - A Fosun Group Company; and General Manager of international trade company Yuyuan Jewelry Diamond Purchasing Department till recently.

Widely experienced in the diamond industry, Wayne also held the position of Managing director of HRD Antwerp Certification Lab in the Greater China Region from May 2014-May to 2019. Before this, he was the Purchasing Director of Zbird of VIP sales department for 2 years at Zbird Diamond Co., Ltd.

Here, in an exclusive interview with Rough&Polished, Wayne Wang talks about LGDs/Jewelry exhaustively, spelling out his aim in growing LUSANT in the opportunity that the sector offers…

Please run us through the LGD jewelry company LUSANT giving details of production volume, market/s you are supplying or plan to cater to, etc. Also, give more information about the parent company - Shanghai Yuyuan Jewelry & Fashion Group Ltd.

Yuyuan Jewelry and Fashion Group are one of the top retail jewelry market players in China, with its two major classic gold jewelry brands, Laomiao and Asia One under its belt, with an annual sales volume of more than 20billion RMB. In March 2020, by acquiring the French designer jewelry brand "DJULA", Yuyuan jewelry starts to spearhead the fashion jewelry field favored by the young generation; in July 2020, Yuyuan Jewelry further established a joint venture company in China with the Italian "Damiani Group" and obtained the exclusive distribution rights of the Italian jewelry brand "DAMIANI” and the affordable luxury jewelry brand "SALVINI" in Greater China, further enhanced the branding portfolio of Yuyuan Jewelry Fashion Group; in August 2021, the lab-grown diamond brand "LUSANT", incubated by Yuyuan Jewelry Fashion Group, was officially launched. " LUSANT " aims to arouse young fashion enthusiasts and make modern independent women look more self-confident and shining.

Which age group do you notice consuming LGD jewelry in China? Give us a picture of the LGD jewelry’s percentage in the total jewelry market now.

We reckon that the market segment for LGD jewelry is those Z generation which grows up under the tide of the global internet, and widely adopted smart phone and live under e-commerce.

We intend to focus on the customer whose consumption behaviour has increasingly shifted from symbolizing their social status to highlighting their personality and expressing their characteristics.

In terms of market share percentage of LGD jewelry, we are so far not able to answer this question, as LUSANT is a new brand, and the first flagship store will open in July 2022. Also, it is irrelevant to estimate LGD jewelry market share in comparison with that of total jewelry market share… as LGD jewelry is really at its early stage of development.

What according to you is the growth potential of the LGD jewelry market in China currently? And what opportunities do you see emerging in the next few years?

Most people see great potential in the growth of the LGD jewelry market, in which, more and more new LGD brands enter the jewelry market, and via social media, more and more local consumers take the initiative to get the information and knowledge of Lab-grown diamonds via mouth to mouth among their friends, colleagues, relatives, and of course internet, social media particularly.

Apart from LGD and natural diamond pricing prospective issue, the major opportunity is that LGD jewelry would provide much wider design creation in fashion categories, and a sense of hi-technology, by utilizing different fancy cut shapes and fancy color of LGD stones.        

Besides facing competition from the natural diamond industry, what other challenges do you think the LGD industry may have to face in the future?

As matter of fact, we do not think LGD is a competitor of natural diamond it can be different commodity categories, which satisfy a different segment of customers. Each item has its inner value. 

The great challenge is located in how we could best educate our clients, and the whole industry to act as one organization to allow the market to operate in a logical, sustainable, transparent, and legitimate way.

Colour gems are capturing the imagination of jewelry connoisseurs of late. Will LGD jewelry face completion from this genre? Your thoughts?

Color gems, due to their manifest colors and hues, provide a greater range of jewelry designs compared with natural diamond jewelry or pearl jewelry. In terms of this, yes, it is true LGD due to its technology could produce fancy color diamonds, such as pink, blue, green, and yellow, also because of the cost of production compared with natural diamond mining, it is possible to cut a lot of different fancy shape diamonds. All those would certainly, like color gems, capture the jewelry design imagination to create more fashionable jewelries which have ever been seen and thought of before, even gifts, ornaments set with different color of LG diamonds.

With the competitive landscape in the LGD sector rather evident, what upcoming trends can predict in the LGD jewelry sector? Any suggestions?

I think we would see more and more commodity categories, which traditionally would never see before, such as LG diamond gifts, ornaments, and fashion accessories. The market would see a cross-category phenomenon in the LGD market. And that would also mean the market cake grows constantly. Certainly, the market would show increasing acceptance of LGD jewelries.

Will LUSANT go into exports of jewelry? Which global consumer market/s do you think showing or may show good demand in the future for LGD jewelry?

We have a plan to venture into the foreign market, especially the North American market, as it is one of the most mature LGD markets in the world. I think the opportunity lies in our competitive advantage in the LGD production center located in China, especially HPHT, and high-quality CVD growth, as well as Chinese strong jewelry manufacturing industry capability, and certainly the huge market size.

What competition will LGD jewelry face from natural diamonds? How do you think this trend will span out in the years to come?

I do not think there is real competition between Natural and LGD, it is a different category commodity. However, due to its chemical and physical uniformity, the whole industry must follow up on the principle of disclosure to the consumer.  

There has been a spurt in the growth of LGD production globally in recent years. Do you think the LGD sector is set to grow further? Reports say LGDs prices have decreased due to over-production of the product. What is the price scenario in China?

Yes, it has been quite a period that the LG producers have increased production, especially HPHT, and more and more have invested or planned to invest in the CVD growth field, and the number of CVD creators has been constantly increasing for those two years.

However, there are still quite high technical or know-how entry barriers for lab-grown diamond production, especially CVD growth. Thus, for the next couple of years, high-quality HPHT, CVD or nice colour-lab-grown- diamonds in pink, blue, and yellow are still on the shortage side, and thus the price has not or will not be greatly affected.

I assume that the price for normal and low-quality LG diamond, normal round 1 ct size, the price might be further decreased until it reaches the marginal cost of the production.

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished