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Mabros Jewellery
Apr 5, 2005 3:32 PM
By Nancy Pier Sindt
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Mabros Jewellery Company, Ltd., celebrating its 20th anniversary this year, is a phenomenon that could only happen in a place like Hong Kong. It is a two-store operation based in the middle of Hong Kong’s central business district. The original mezzanine operation is about 2,000 square feet and the newer store is a 600-square-foot on-street boutique. Both stores are simply, but elegantly, furnished with muted carpeting, comfortable client chairs and simple displays that highlight selected pieces of important diamond jewelry.
Lawrence Yung-Yi Ma’s business card reads like a mini-telephone directory. The impressive titles following his many listings include chairman of Mabros Jewellery Company, Ltd., one of Hong Kong’s major diamond jewelry retail outlets. Ma is also presently the chairman of the Diamond Federation of Hong Kong and executive director of Lee Heng Diamond Group, a family holding.
All in the Family
Ma’s family has a history in the diamond business, starting with his father in Thailand during the 1940s. The patriarch learned the gemstone trade, beginning with jade and expanding into diamond importing and wholesaling. He relocated his family to Hong Kong in the early 1960s. After his sudden death in 1966, his elder son Michael took over the business, traveling the world to import and wholesale diamonds — a time Lawrence terms the “golden years” for Chinese business.
In the late 1970s, when Lawrence joined the family business, the market in Southeast Asia was growing rapidly. The brothers concentrated on wholesaling, but received requests from friends and associates to supply jewelry as well. They decided to open a shop in Hong Kong’s central district.
“We wanted to sell a fine product,” explains Ma. “But even if we couldn’t sell it, at least we could appreciate it.” They did not have to worry. They soon learned that Hong Kong shoppers have an unparalleled taste, knowledge and thirst for diamond jewelry.
In the two shops average sales range from $5,000 to $20,000 and the typical customer buys from ten pieces to 15 pieces of jewelry per year. “The ownership of diamond jewelry is high,” explains Ma. “Hong Kong customers buy diamond jewelry for day-to-day use or to wear for a special function. They are highly knowledgeable about diamonds and competition is stiff.”
Mabros’ average customer is between 30 years old and 60 years old. Most are professional businessmen and their wives. About 60 percent to 70 percent are local Hong Kong customers and 30 percent are Mainland Chinese.
Meeting Customer Needs
The store sells an entire range of fashion and basic diamond and gemstone jewelry, but recently there has been more interest in fancy colors such as yellows, pinks and blues because Mabros’ typical customer already has a wardrobe of diamond jewelry. Another important niche is diamond watches, a category that has developed steadily over the past six or seven years. As diamond dealers, Ma’s family is in a good position to make these products that require precise color matching and calibrating.
While Mabros has no official sales, merchants have to understand the Chinese love for bargaining. “The one-price system is hard to enforce in Hong Kong,” says Ma, as most shoppers expect to negotiate price. Discounts range from a few percent up to 10 percent for top clients.
To satisfy its sophisticated buyers, the quality of Mabros diamonds is high with colors in the D to F range and clarity from clean to VSI. The jewelry selection includes pearls and colored gemstones, but Ma estimates that 85 percent of his sales come from diamond jewelry. Very few loose diamonds are sold. Certificates are growing in popularity, providing both an assurance of quality and making it easier to compare prices, particularly on items like solitaires.
Engagement and wedding rings — a pivotal category for most U.S. retailers — are part of the Chinese culture, but not a significant segment of overall business, explains Ma. They only represent about 10 percent to 15 percent of Mabros’ sales. “Asians like to own jewelry and the engagement is just another occasion to buy jewelry,” he says. Solitaires and three-stone styles are not that important in Hong Kong.
On branding and branded diamonds, Ma says they have less relevance in Southeast Asia because product knowledge is so easily available and most customers are savvy buyers. While brands in general have appeal, diamond buyers tend to make aggressive comparisons and will generally opt for larger total-weight pieces or bigger diamonds rather than pay the higher price for a brand.
“In some parts of the world, brands do better because they give the customer an assurance of quality,” says Ma. “They are more important for those who buy one or two pieces rather than those who own and buy many more pieces of jewelry.” Chinese tourists, for example, a rapidly growing consumer segment, are more likely to look for brands than the local buyers.
Mabros Jewellery Company’s services range from the basics such as setting, cleaning and repairing jewelry up to designing and manufacturing custom pieces. “We offer our clients all the services of a personal jeweler.” The stores have designers on the premises and special orders are produced a few blocks away at two manufacturing facilities.
In addition to the two factories in Hong Kong, the company owns two large jewelry-manufacturing facilities in Mainland China.
For pieces destined for Mabros, however, all the work is done locally to maintain better quality control and for a quicker turnaround. Although the quality of production is improving in China, the level of fine craftsmanship has not yet reached that of Hong Kong, says Ma.
Other retail holdings of the Ma family include the high-profile Falconer boutique in Hong Kong’s Peninsula Hotel and the youth-oriented and fashion-oriented Ma Belle jewelry outlets throughout Hong Kong and Southeast Asia. The outlets are advertised heavily in all media, with a spend of approximately $2.5 million a year.
Advertising for Mabros Jewellery, however, is limited to a handful of local magazines. According to its chairman, the store’s reputation has grown so much over the past two decades that it is recognized by name and style by many clients. “We know the taste of Asian customers and slowly we will become a brand name,” concludes Ma.
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Tags:
China, Hong Kong, Jewelry, Manufacturing, Production
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