Freshwater pearls account for more than 60 per cent of pearl sales in China, with the rest comprising their saltwater counterparts such as Akoya, Tahitian and South Sea pearls. Zhejiang Province, where Zhuji City and the Shanxiahu Town Industrial Park are located, account for around 75 per cent of world freshwater pearl production and 80 per cent of domestic production, data from the Zhejiang city government showed.

One of the most recent developments in China’s flourishing freshwater pearl market is the emergence of pearl brands.

For many decades, the market was solely focused on the relatively homogeneous production and sale of massive quantities of pearls to meet domestic demand. Freshwater pearls have an estimated market share of 3 per cent in the jewellery sector. A small portion of pearl production is reserved for export.

Recently, a few industry players have invested in jewellery design and marketing to complement their pearl farming business. These companies’ efforts are rooted in an ambition to distinguish themselves from others and develop a strong brand identity inspired by business models adopted by major international jewellery brands.

Among China’s rising pearl brands are Zhejiang Grace Pearl Jewelry Co Ltd, gN Pearls, Angeperle and Ruans Pearl (Holding) Ltd, to name a few. Japanese brand Mikimoto however remains the most famous pearl jewellery brand in China.

This development is also accompanied by a change in perception of jewellery among Chinese consumers. Jewellery pieces are no longer just gifts to be given to loved ones to celebrate life’s moments but a symbol of self-fulfillment as well.

More than just an ornament, jewellery has become an instrument to express the wearer’s personality, desires and status.

Beyond traditional gold jewellery, the market has also seen a significant increase in demand for jewellery pieces adorned with diamonds, coloured gemstones and jade over the years. More educated in the international culture of luxury, high-end consumers can now appreciate a new generation of cultured freshwater pearls that are produced using saltwater pearling techniques such as grafting of a nucleus.

As consumers develop greater interest in and better knowledge of pearls, they also discover the immense diversity that pearls from other regions offer in terms of colour, diameter, lustre and shape, as well the pearl’s history and value.

Focus

The year 2020 marked the first edition of the World Pearl Congress co-organised by the China Jewelry & Gems Association in the city of Zhuji, the pearl capital of China. The Freshwater Pearl Museum was also inaugurated on the sidelines of the event.

The Hurun Research Institute, an international research firm renowned for their “rich lists,” likewise published the Hurun Most Innovative Pearl Companies in the World 2020 during the congress. Those that made it on the list came from nine pearl-producing countries. Of those companies, 24 are Chinese enterprises or 48 per cent of the total tally, which is understandable since China is the world’s largest pearl producer. Not surprisingly, 15 of those companies are in Zhuji.

Other pearl brands included nine from Japan, seven from the US and five from Australia. In addition, Switzerland, France, the UK, Canada and the Philippines each had one company mentioned in the study.

Innovative pearl companies

Rupert Hoogewerf, chairman and chief researcher of Hurun Report, a Shanghai-based luxury publishing house founded in 1999, talked about the inspiration behind the first-ever Hurun Most Innovative Pearl Companies in the World study.

Pearl Report: Why did you come up with a global list dedicated to pearl brands?

Rupert Hoogewerf: Hurun is best-known for its rich lists series, ranking the most successful entrepreneurs in China, India and the rest of the world. We also published the Global Unicorn index or the Hurun 500, a ranking of the world’s most valuable companies. In recent years, we found that the appetite for local brands in China has been very strong in all sectors, including the luxury market. We were looking at where Chinese brands stand on a global scale within the pearl industry. We also wanted to help people better understand which pearl brands are making their mark today.

Your team went through comprehensive quantitative and qualitative research methods. Were there any surprises in the results?

Hoogewerf: Clearly, this list targets the Chinese market. Firstly, we collected nearly 300 pearl companies from pearl associations and public information of major pearl industry cluster countries in the world.

After that, we screened 100 potential candidate companies to confirm their main business, company scale and brand influence, among others.

Finally, based on the pearl’s industrial cluster perspective, combined with the four dimensions of brand strategy, business operation, technical strength and sustainable development, a total of 11 indicators were quantified and comprehensively scored, and the list was finally selected. The number of freshwater pearl farmers in China was very high. That was a surprise to me.

Also, we realised that many Chinese brands are now including pearls from other regions in their collections: South Sea pearls from Australia, Akoya pearls from Japan and black pearls from Tahiti. Once you have a brand, you can start expanding the range of your products and not only sell Chinese freshwater pearls to your clients.

Based on your research, what is the most important factor to becoming an innovative brand?

Hoogewerf: In China, you find many great companies in all sectors but very few have the trust of a brand. Therefore, brand innovation is critical. Sustainability is another important topic for pearl brands. In Zhuji, many pearl farmers had to relocate their activity because of environmental issues.

One can assume that Chinese consumers will always be expecting more responsible commitments from the brands like the case in Western countries. Although there are still very large quantities of freshwater pearls produced in China, the focus is gradually shifting to quality. It is a challenge to persuade the consumers that pearls are an exclusive product and that top-quality pearls are of high value.

Design is another key element for a brand to stand out. In the fashion industry, famous designers are invited to collaborate. It is a very powerful trend. And finally, non-Chinese pearl brands should not underestimate the opportunities in the Chinese market. A very high percentage of the world’s luxury market consumers are living in China.