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Pearls Fiji

Pearls Fiji

wa mj ar pearls wholesaleJustin Hunter had a big dream. Why not, he thought, grow pearls that looked nothing like the traditional black pearl. Why not produce pearls in beautifully distinctive hues that are also larger than what are traditionally grown. So he came back home to Fiji from the United States to establish J. Hunter Pearls Fiji in 1999 where he implemented his bold new pearl farming techniques.

Now, he is reaping the rewards of his innovative thinking… and his pearls are highly sought after for their uniqueness and their untraditional colors. Justin’s dream did not end with growing the world’s best pearls. His goal was to blend pearl farming with Fiji’s natural environment and its indigenous people to create a working partnership.
Justin is intensely committed to keeping the marine environment of Savusavu Bay in its pristine condition and to improving the lives of the people of the community.

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J. Hunter Pearls Fiji provides much needed jobs for local people, which give them the resources to improve their villages and their lifestyles. Justin’s commitment also includes providing school scholarships to deserving students and to be personally involved with the Savusavu community at large.

Before Kokichi Mikimoto discovered the technique of culturing pearls in the early 1900s, natural pearls were so rare and expensive that they were reserved for only the noble and very rich. But the technology of pearl culturing changed all that. These days, of course, most all pearls are cultured. That is to say, the hand of man enters into nature’s realm to begin the process of making a pearl, then nature takes her course while the farmer continues aiding the process with specific oyster management. Today, Justin Hunter and his team of farmers and technicians are
perfecting the pearl culturing process. Every step of the operation is carefully managed, with years spent refining the methods toward the ultimate goal of growing the perfect pearl. Everyone at J. Hunter Pearls Fiji is devoted to the creation of beautiful pearls, utilizing the uniquely colored oyster shells that grow naturally in Savusavu Bay, creating pearls that are exceptionally different from all others.

J. Hunter Pearls Fiji was established in 1999 when Justin Hunter returned home to Fiji after he earned his marine biology degree and gained his aquaculture experience with Taylor Shellfish Inc., of the US. Justin spent his childhood in the small township of Savusavu, and it was his goal to find a way to use his aquaculture expertise and live in his favorite place in the world: Fiji. Creating J. Hunter Pearls, along with his partners who are also his cousins from Taylor Shellfish Inc., has been a dream come true.

The company

J. Hunter Pearls Fiji is situated in Savusavu Town on the island of Vanua Levu in the north of Fiji, an area that’s still largely untouched. This unspoiled location provides a truly unique location for aquaculture. The pearls are cultured in a natural environment that’s largely free of impurities and pollution. The office and jewelry boutique is situated on Main Street in Savusavu Town, close to the wharf, while the pearl farm is just a short distance away on the bay. The
founder, Justin Hunter, is an active community citizen who strives to protect and maintain Savusavu Bay’s healthy marine environment. J. Hunter Pearls Fiji works closely with the traditional owners of the local fishing rights and provides much-needed jobs for the community, such as contracting work to women’s groups to help the villagers improve their standard of living. The company also sponsors village improvements and provides a school scholarship annually for deserving students.

Justin is using his expertise in aquaculture toward innovative and carefully-managed pearl farming. His goal is to make J. Hunter Pearls known as the world’s supplier of Fiji Pearls, beautiful pearls in colors not found anywhere else. In 2005, J. Hunter Pearls won the Unique Exporter of the Year award presented by the Fiji Trades and Investment Bureau, in the coveted Exporter of the Year category.

The pearls

J. Hunter Pearls are a tribute to their unique environment, and the singular expertise of those who graft and nurture them. As Justin himself told us: “I thought you might just like to look at what we are producing. We have some of the best multicolored pearls being produced anywhere. The size of our pearls is also very good, averaging around 10.5 mm for the first seed. We are producing around 120 kilograms this year.”

“As you can see, we are not trying to mass produce the same pearl over and over again in huge quantities (à la Tahiti). We are really trying to produce something different for which we will hopefully be able to eke out a small niche market. And we proudly guarantee these pearls to be totally natural — neither dyed, colored nor enhanced in any way. They are grown in the warm pristine waters of Savusavu Bay, on the island of Vanua Levu of northern Fiji, where the environment remains precisely as nature intended it.” These nutrient-rich waters feed the oysters so well that J. Hunter pearls have a nacre thickness averaging 1.6 mm, well above the established nacre thickness of other pearl growing countries. “Most of our crop (around 65%) now fits into the lighter shade of pearls. We believe that the oyster we cultivate (produced from our own hatchery) is a sub-species of the oyster that survives in the atoll,” says Justin. “Our oysters have distinctively colored shells and pearls,” continues Justin. “And, as you can see, the shells we have are striking and in return they produce pretty striking pearls that I am quite sure you have not seen the likes of, ever before”.

Operations

According to Ben Ponia, Aquaculture Adviser of the Secretariat of the Pacific Community: “The J. Hunter Pearls label is quickly becoming an exclusive high quality product line for Fijian pearls. The farm success is the result of attention to a number of critical factors such as good business acumen, attention to marketing and consultation with local communities. “Under the managerial direction of Justin Hunter, the farm has approximately 500,000 oysters under
cultivation and the pearl harvest grosses several million Fijian dollars per annum. “Upon arrival I viewed several crops that had just been harvested. The pearls display the usual spectacular array of color which Fiji pearls are becoming renowned for”.

Amongst this crop some dark “chocolate” colored pearls were pointed out. “The quality of pearls is probably in part due to the expertise of Japanese technicians employed by the farm. These technicians also provide seeding services for other pearl farmers in the surrounding area. The J. Hunter operation is also expanding to another location.

“The pearl farm operates its own hatchery and routine spawning operations were underway during my visit. The Fiji oysters appear to have a high fecundity and large sized eggs, which could be related to the nutrient rich water quality environment of Savusavu Bay. “The pearl oyster egg sizes and spawn quantities seem larger than what are normally obtained in the Pacific region, quite likely a result of the nutrient rich waters, causing the oysters to have an unusually healthy gonadal condition.

“Whilst the hatchery is not large by commercial standards, it still has scope for expansion and could accommodate other species. “The farm also employs a University of the South Pacific graduate as its biologist to carry out ecological baseline studies, particularly water quality monitoring and carrying out basic pearl grow out experiments. “The pearl farm provides direct benefits through avenues such as employment (of all genders and a range of ages) but also indirectly through the business that the high investment pearl farming enterprise generates. “The farm also pays a dividend from its profits to the local village. For example, it has provided funds for a community hall, which also serves as emergency shelter in case of hurricanes.

“In addition, the farm sponsors an education scholarship for young students from the village. Those interested to know more about the farm operations can visit their website. “Whilst at the farm we discussed the possibility of carrying out some mabe-pearl seeding trials. The Hunter Pearl Farm has thousands of reject oysters that could be used for the experiments. It would be particularly interesting if the geographical scope for this experiment could be standardized and extended throughout the Pacific and other countries.”

The product

Justin is also proud of the finished product in which his pearls ultimately appear: “When setting our pearls, we showcase the singular beauty and uniqueness of each pearl. “Our ring and pendant collections are inspired by the individual characteristics of our high quality pearls. “All diamonds in our pieces are supplied in the VS1 to SI clarity categories and are H-I in color. “Our pearl necklaces and earrings are all hand-matched, with each piece being uniquely beautiful.”

Fiji pastels

“When we first took our pearls to Japan in 2003, we could not, for the life of us, get anyone to purchase our Pastel  / Fiji light pearls. “Now we get a premium price for our pastel pearls. Early on, though, most buyers that looked at our pearls initially said they were interesting but did not want to take the risk of supplying something completely new to the market… but we believed in both our product and with the concept of developing a new and exciting product, says Justin.

The auction

J. Hunter’s Fiji Pearls Auction was held in Japan on June 15th, 2007. At this event were offered approximately 30,000 pearls in 89 lots with an average size of 11.5 mm. The biggest round pearl was 18 mm. Participants numbered 18 from countries such as Germany, Italy, Hong Kong, Japan, and several other locales. Seven were from Europe. Those in attendance delivered the following comments:

  • “The world pearl market has been longing for something new like Fiji pearls.”
  • “We were amazed at the various colors of Fiji pearls, colors which we have never seen before.”
  • “The strong luster impressed me a great deal.”
  • “These were rare and larger pearls, compared with Tahitian pearls.”
  • “I appreciate J. Hunter’s farmer’s concept.” Justin’s comments “Our unique marine environment and careful selection of oysters possessing rich color variation have produced these pearls that are in a class of their very own.”
  • “Our vision is to continue the work we have started. We look to be champions of a new direction of pearl farming. We will look to challenge the current corporate style of systematic mass production of pearls and focus instead on producing high quality pearls.
  • “We will continue to work to provide truly unique pearls that represent Fiji.” “I have been very fortunate to have great people behind this venture that believed in what we were doing, and made this work. “Our recent auction has given us the success we have been working so hard for”.

Editor’s note :  A follow-up article in the most recent issue of Pearl World (October–December 2008) describes the second auction of pearls from J. Hunter Pearls Fiji in Yokohama earlier this year. It reports that 90% of lots were sold. There was particularly keen bidding for a 18.9 mm round pearl and for baroques in “earthy” colors which are in demand. The article also reported on expansion of J. Hunter Pearls activities to a second 250 ha farm site at Kioa in the northern group of Fiji. This farm site will greatly increase production in coming years.

Article Source: Pearl World, The International Pearling Journal, volume 16, number 4 (December 2007)
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Pearl jewelry wholesale: South Sea pearls

Pearl jewelry wholesale : The challenges and opportunities of growing and marketing South Sea cultured pearls

wa mj ar pearls wholesaleOver the last 50 years, the cultured pearl industry has undergone a significant transformation. It has changed from a period when Japanese and (later) South Sea cultured pearls were effectively the only cultured pearls in the marketplace to the situation today, where there are a large variety of cultured pearls available from many different localities and of many different types. (Details info: pearl jewelry wholesale)

In the pre-culturing era, all oceanic (saltwater) pearls were classified as Oriental pearls and South Sea pearls fell into this generic category. With the advent of pearl culturing, however, pearls became more accurately known for the type of oyster that produced them and the region in which those oysters grew — hence the term South Sea pearls. Naturally occurring pearls from the Pinctada maxima oyster native to the South Seas have been traded for thousands of years. But in past centuries, many natural South Sea pearls were undoubtedly traded simply as Gulf pearls. Because of its spectacular nacre, the South Sea pearl oyster historically has produced some of the most significant natural pearls in the world. Therefore, it follows that this oyster has the ability to produce magnificent cultured pearls as well. (Details info: pearl jewelry wholesale)

However, the competition for market share between gem producers as well as between different pearl types is fierce. At the same time, there are significant gaps in the expertise required to grow pearl oysters and conduct pearl farming compared to many other fields of knowledge. There are very few experts today who have a broad knowledge on a comprehensive range of pearl and pearl farming issues. The challenge for the South Sea cultured pearl industry today is twofold: to produce pearls of a superior quality, on the basis of which they can be differentiated in the wider pearl market, and to improve the level of knowledge and understanding of pearls in the market place. (Details info: pearl jewelry wholesale)

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Chinese freshwater cultured pearl evolution

Seven years ago, we presented “Chinese Freshwater Cultured Pearl Revolution” at the last GIA symposium. In a very controversial session, we predicted the enormous impact China would have on the pearl markets. Nearly a decade later, the entire industry has changed. Huge quantities of affordable cultured pearls now are harvested annually — by conservative estimates, more than 1,200 tons of freshwater cultured pearls were harvested in 2005 — putting pressure on other pearl-producing countries. The pearl industry is now in a Darwinian “survival of the fittest” mode. Rounder and brighter cultured pearls from China (Fig. 2) have totally altered Japan’s previous dominance as the major pearl power. Large sizes are beginning to affect the South Sea markets. Even golden and Tahitian pearls are not immune to China’s fury, as improved color enhancements allow freshwater cultured pearls to mimic colors from all over the globe. (Details info: pearl jewelry wholesale)

What does the future look like for the next decade? With 11–14 mm bead-nucleated freshwater pearls beginning to show up in the marketplace, China appears to be taking even sharper aim at South Sea producers. And while the quantities harvested in China continue to rise, can anything be done to support pricing? Are more affordable cultured pearls a good thing for the market as a whole?

Interestingly, China’s exports are rising dramatically, but total revenues have not kept up. Falling prices have badly hurt many of the growers, creating a “sell it before it drops further” mentality. All this continues to put financial pressure on the country’s market. While China produces 95% of the world’s cultured pearls, pearl associations estimate it keeps only about 8% of the revenue they ultimately generate — an amazing statistic. (Details info: pearl jewelry wholesale)

To keep prices up, China needs to tackle the issues surrounding the low image of its cultured pearls. Better processing, improved marketing and elimination of low-end products are vital to support higher values for the market. (Details info: pearl jewelry wholesale)

The Tahitian cultured pearl

The Tahitian cultured pearl industry is the second largest industry in French Polynesia and the primary source of foreign currency from direct exports. It has a major socio-cultural and economic impact on the nation. With more than 7,000 Polynesians earning their livelihood within the pearl industry, it is an integral part of the fabric of Polynesian life. (Details info: pearl jewelry wholesale)

The meteoric popularity of the Tahitian cultured pearl in the 1980s triggered a veritable boom in the industry. For many years, this market demand made pearl farming a lucrative endeavour, but the industry reached its saturation point in the year 2000. Flagrant overproduction and slack quality control, combined with a slowdown of the world economy, dealt the Tahitian pearl industry a serious setback. Suddenly, pearl farming was no longer a viable activity. (Details info: pearl jewelry wholesale)

According to the official figures from the French Polynesian Pearl Culture Bureau, this glut caused many pearl farms to close and others to consolidate. In only seven years, the number of pearl farming operations decreased from 2,700 registered in 1998 to only 800 remaining in activity at the end of 2005 — half of them shell producers, the other half pearl producers. (Details info: pearl jewelry wholesale)

Drastic measures had to be taken to ensure a stable production and a quality standard for the Tahitian cultured pearl. Consequently, the French Polynesian Government established the Pearl Culture Bureau in 2001. This organization aimed to enforce strict quality controls and production regulations on the supply side of the spectrum. (Details info: pearl jewelry wholesale)

These included the following measures:

  • Limit the number of pearl farming concessions
  • Limit the number of production and export licenses
  • Shut down pearl culturing activity in certain lagoons
  • Establish a firm classification system aimed at ensuring that only high-quality product enters the world market
  • Strictly control a minimum required nacre thickness in all exported cultured pearls
  • Destroy all rejects to prevent their commercial use.

All these regulations combined with an effective marketing program, conducted by the non-profit GIE Perles de Tahiti, resulted in a marked increase in the total value of Tahitian cultured pearl exports of 14% in 2004 and 16% in 2005, accompanied by trading price increases of 30% from 2003 to 2004 and 20% from 2004 to 2005. Confidence has been restored to the market and production in 2006 has remained stable to date. (Details info: pearl jewelry wholesale)

Maintaining the viability of Tahitian pearl culturing activity is the principal objective of Perles de Tahiti. The specific objectives include:

  • Export cultured pearls and cultured pearl jewellery totalling $200 million in 2012
  • Limit the number of active producers on the island to 1,000
  • Perpetuate the pearl-bearing oyster resources
  • Improve the quality of production.

The future of the Tahitian pearl industry is critical to French Polynesia and its direction will dictate the future social, cultural and economic well being of the islands. Protection of the environment is a pivotal aspect of this. The life of a Polynesian and his family depend on his livelihood. The islands and their lagoons are our heritage and our future, worth every bit of our protection. Pearl culture is indeed a miracle of nature and of man. We must give back to nature what she has so graciously given us. (Details info: pearl jewelry wholesale)

Branding cultured pearls: From a retail perspective

Over the years, the retail landscape has undergone many changes. Consumers have become savvier and more demanding, retailers have created an “environment” or buying experience to attract these sophisticated consumers, and manufacturers and suppliers have developed appealing “brands” to set themselves apart from the competition. The most prominent examples can be found in the apparel industry where leading fashion designers have truly captured the hearts and wallets of the high-end consumer with strong brand identities and distinct product assortments. More recently, apparel retailers have created their own brand significance by setting themselves apart from the high-end fashion world with innovative store concepts and individually developed product lines. (Details info: pearl jewelry wholesale)

Critical factors

  • Companies must clearly define and market their brand essence, strive for differentiation and target their audience with precision.
  • Defining one’s brand essence can take many forms, but it must remain clear and consistent over time. There are many examples of established houses that have successfully reinvented themselves (Burberry) and well as newly created brands that are aggressively targeting Generations X and Y (Abercrombie and Fitch).
  • Creating differentiation is crucial in today’s retail environment. There are too many look-alike products or generic copies that offer no value added and consequently are not appealing to an affluent audience. In today’s highly competitive marketplace where product life cycles are getting shorter, it is imperative that successful brands strive to create a point of difference.
  • Finally, attracting a well-defined audience will ensure that companies achieve increasing sales and sustain a profitable business model. Generational marketing (including psychographic profiling) is one aspect of defining and attracting the most appropriate audience for your product. (Details info: pearl jewelry wholesale)
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Cultured pearls in the 21st Century: A free market and new looks

Cultured pearls in the 21st Century: A free market and new looks

wa mj ar pearls wholesaleThe cultured pearl industry has experienced a dramatic transformation during the past 15 years, from a single commodity dominated by one country to a multi-colored array of goods and an ever-expanding group of producers (Fig. 1).  Japanese dealers relinquish control For many decades after pioneering the cultured pearl in the early twentieth century, Japanese companies maintained tight control over its technology, production and distribution (Fig. 2).

In the 1960s, however, large, white South Sea cultured pearls from Australia and black cultured pearls from French Polynesia began entering the market alongside the traditional white Japanese akoya.

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The French Polynesians initially struggled to gain acceptance for their products, as many believed they were treated-color. A breakthrough came in the early 1970s when GIA researcher Robert Crowningshield determined their black color was indeed natural. Meanwhile, the South Sea cultured pearl was becoming a branded fashion item, though the Australians still marketed their output solely through Japanese wholesalers.

The real changes began in the 1990s, when the nearly century-long grip of the Japanese loosened due to a combination of factors: aggressive marketing efforts for South Sea and black French Polynesian pearls; the rise of lower-cost, fine-quality Chinese freshwater cultured pearls (Fig. 3); and the outbreak of a disease that devastated much of Japan’s pearling industry. The Australians and the French Polynesians (now selling under the “Tahitian” banner) began marketing their products as distinct from Japanese akoyas: the South Sea goods as luxury items that were not subjected to treatments, the Tahitians as exotic fashion pieces. Producers of both types of cultured pearls embarked on multi-million-dollar consumer campaigns to promote their goods and the images they wanted them to convey.

By the mid-1990s, Chinese farmers, who for years had produced small, irregularly shaped and very inexpensive goods (dubbed “rice krispie pearls”), were successfully growing round, akoya-like cultured pearls. The quantity of Chinese goods entering the market threatened to inundate Japanese distributors. The Japanese entered talks with the Chinese government in an effort to control production and exports of such goods, but they failed on both fronts.
Then, in 1996, reports began filtering in that Japanese pearl farms were suffering the massive mortality of their oyster crops. By year’s end, an estimated two-thirds of the akoya oysters under cultivation in Japanese waters had died from infectious disease — a blow from which that country’s cultured pearl industry has not yet fully recovered.

As a result, Japanese producers no longer had the financial resources to control supplies and distribution, thus creating a true free market within the industry. Market instability meets fashion revolution The first test of the new free market came at the end of the decade, when the large amounts of Chinese goods depressed prices for some categories and the production of Tahitian black cultured pearls skyrocketed with little control over quality. Prices
for lower-quality black cultured pearls in particular plummeted, a situation that took several years to reverse as the French Polynesian government imposed stricter controls on exports. The Japanese attempted to move akoyas more up-market by concentrating on larger sizes, while the South Sea producers increased their luxury marketing and advertising campaigns.

At the same time, cultured pearls in pastel shades of green, violet, pink and blue began showing up in designer pieces in the late 1990s, while a producer in the Philippines launched a marketing campaign for gold-colored goods. Within the past few years, “chocolate pearls” have become a fashion item. Once rejected by pearl producers and distributors who thought only in terms of black and white, such fancy-colored cultured pearls started a fashion revolution that still continues. As some of the world’s top designers began working with cultured pearls and the major producers increased their spending on branding and advertising (Fig. 4), large retailers took a much greater interest. Indeed, Tiffany & Co. created an entire chain of retail stores (Iridesse) based on pearl jewelry, because they could now offered a diverse array of products across a very broad price range.

In the future, the success of these many ventures will undoubtedly attract new enterprises in other nations, particularly around the Pacific Rim — but also in Mexico and the Middle East — while existing producers will continue to experiment with new products. Recently, one designer partnered with a Vietnamese farm to culture black pearls around gemstone bead nuclei. Identifying treatments will remain a challenge, and retailers and consumers alike must beware of the many techniques that can be used to enhance the appearance of cultured pearls, especially irradiation
and dyeing, and the methods that can be used to identify them.
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Corporate taxation in China

Corporate taxation in China

wa mj ar pearls wholesaleCurrently, domestic enterprises and foreign enterprises (FE) and foreign investment enterprises (FIE) are governed by two different sets of enterprise income tax legislation, thereby profoundly affecting the way enterprises consider investment decisions. However, with WTO accession, China is mandated to dismantle some of the preferential taxation policies adopted in relation to foreign enterprises to attract FDI.

FIEs include Chinese-foreign equity joint ventures, Chinese-foreign contractual joint ventures and wholly foreign-owned enterprises established in China. FEs include foreign companies, enterprises and other economic organizations which have establishments in China and are engaged in production or business operations or which, although without establishments in China, have income from sources within China. Establishments refer to management offices, business organizations, representative offices, factories, places where natural resources are exploited, places where contracted projects of construction, installation, assembly and exploration are carried out, places where labour services are provided and business agents. FIEs are subject to income tax on their worldwide income whereas the FEs are generally liable to income tax in respect of their China-sourced income.

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Income tax on resident enterprises
Generally the national income tax on FIEs and FEs with establishments is levied at 30 per cent while local income tax is 3 per cent on the net taxable profit. FIEs are eligible for various tax holidays and other tax reductions and exemptions under the tax law, depending on their locations and nature of operations.

The following are the preferential income tax rates for income derived from production and non-production operations carried on by FIEs and FEs located in various special tax regimes:

  • Income from production or non-production businesses obtained by FIEs and FEs with establishments located in Special Economic Zones (SEZ) in Shenzhen, Zhuhai, Shantou, Xiamen and Hainan is subject to tax at 1 5 per cent.
  • Income from production businesses obtained by FIEs located in the designated Economic and Technological Development Zones (ETDZ) is also subject to tax at 1 5 per cent.
  • Income obtained by FIEs located in Coastal Economic Open Zones (CEOZ) and in the old urban districts of cities where the SEZs or ETDZs are located, and are engaged in production operations, is subject to tax at 24 per cent.
  • Income obtained by FIEs located in Coastal Economic Open Zones and in the old urban districts of cities where the SEZs and ETDZs are located, and are engaged in the following projects, is subject to tax at 1 5 per cent:
    (a) technology- intensive or knowledge- intensive projects;
    (b) projects with a long investment return period with foreign investment of not less than
    US $30 million; and
    (c) energy, communications or port development projects.
  • Income obtained by FIEs located in Shanghai Pudong New Area and engaged in productive operations, energy and transportation construction projects is subject to tax at 1 5 per cent.
  • Enterprises located in certain free trade zones and export processing zones and in certain Western and Central areas may also be subject to a 1 5 per cent reduced income tax rate.
  • In order to induce reinvestment of profits by foreign investors, a 40 per cent tax refund is granted to the foreign investor that reinvests its share of distributed profits in the same or a new FIE for a period of more than five years. Profits reinvested by the foreign investor in the same or in a new export-orientated enterprise or technologically advanced enterprise for a period of more than five years may be granted a 1 00 per cent tax refund.
  • On repatriation of after-tax profits, no income tax is levied. In addition, dividend income received by FIEs in China is also tax exempt but any relevant loss or expenses incurred are non-deductible.
  • For FIEs engaged in encouraged projects that purchase China-made equipment within the total investment or FIEs purchasing China-made equipment beyond the total investment but for the purpose of technological upgrading or for producing hightechnology products, 40 per cent of the costs of the domestic equipment may be used as a credit to offset the increment in the enterprise income tax liability in the year of equipment purchase as compared with that of the previous year.
  • If the expenditure on technology development of an FIE increases by 1 0 per cent or more over that of the previous year, the taxable income of that FIE for the current year, with the approval from the tax authority, will be offset by 50 per cent of the actual amount of the spending on technology development.
  • Newly established software production enterprises will be eligible for two years of exemption and three years of 50 per cent reduction of Enterprise Income Tax (EIT) from the first year they make profits.

Tax holidays and incentives

In addition to the preferential tax rates mentioned above, FIEs are entitled to the following   and incentives:

  • Production FIEs scheduled to operate for a period of more than 10 years will be entitled to two years’ tax exemption and three years’ 50 per cent income tax rate reduction commencing from the first profit-making year.
  • After the expiry of the tax exemption and reduction period, a production FIE exporting 70 percent or more of the value of its production output in a year may pay income tax at a 50 per cent reduction rate for that year subject to a minimum rate of 10 per cent.
  • After the expiry of the tax exemption and reduction period, a ‘technologically advanced FIE’ may pay income tax at a 50 per cent reduction for a further three years subject, again, to a minimum rate of 10 per cent. The ‘technologically advanced’ status requires special certification from the local government.
  • Preferential tax exemption in a given year will have EIT levied at the reduced rate of 10 per cent. FIEs in the Central and Western areas and under the encouraged category of the Investment Guidelines will enjoy an extension of the normal tax holiday for three years. That is, on top of the normal tax holiday of two years’ exemption and three years 50 per cent reduction of EIT, the reduced EIT rate of 15 per cent will be applicable for another three years after this five-year normal tax holiday. An extended 15 per cent reduced EIT rate will be available provided that the projects fall within the key encouraged projects category and satisfy other conditions.

Other Taxes

Business tax is applicable to enterprises in the service, transport and other non-production industries as well as the transfer of intangible assets or immovable properties. Business tax rates range from 3 per cent to 20 per cent, depending on the category of the business concerned. Consumption tax is levied on the production, in China, of 11 categories of goods including cigarettes, alcohol, cosmetics, jewellery, gasoline and motor vehicles. Importation of taxable goods is also subject to consumption tax but export is exempt.

Turnover tax paid, except for value-added tax, is deductible for foreign enterprise income tax purposes, because both business tax and consumption tax are considered as costs to the business or enterprise concerned. Value-added tax, however, is a tax which is borne by the end-user of taxable products and services and would not be deductible for income tax purposes. Local income tax is levied at three per cent of net taxable profit. Exemption or reduction in local income tax may be granted to FIEs located in SEZs, ETDZs and the old urban districts of cities where an SEZ is located, at the discretion of the local tax authorities.

Effective 1 January 1994 a turnover tax system consisting of value-added tax, consumption tax and business tax was introduced by the Chinese authorities. Value-added tax, consumption tax and business tax are indirect taxes charged on the gross turnover of businesses and enterprises operating in China. Under the turnover tax system, FIEs will pay either value-added tax or business tax, depending on the nature of their businesses. Value-added tax is levied on the sales of tangible goods, provision of processing, repairs and replacement services and the importation of goods within PRC. The general value-added tax rate is 17 per cent on products and imports and a lower rate of 13 per cent is levied on certain specific products, mostly necessities. Export sales are exempted under VAT rules and an exporter who incurs input VAT on purchase or manufacture of goods should be able to claim a refund from the tax authorities.

Articles source: Gems & Jewellery Industry in China, Embassy of India, Beijing
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We send your purchasing parcel via FedEx, we inform you the tracking number as soon as possible

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We send your purchasing parcel via FedEx, we inform you the tracking number as soon as possible

This is my name, my phone number and my address, as a sender (written by FedEx)
This is my name, my phone number and my address, as a sender (written by FedEx)

We send your purchasing parcel via FedEx, we inform you the tracking number as soon as possible
We send your purchasing parcel via FedEx, we inform you the tracking number as soon as possible

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Post-Entry Marketing Strategy in Chinese Market

Post-Entry Marketing Strategy in Chinese Market

wa mj ar pearls wholesaleAfter a foreign enterprise enters the Chinese market following after a process of tough negotiations and approval tests, its success will depend, apart from sound business relations with its JV partner, on various marketing strategies. While the theories of marketing applicable elsewhere can be replicated by and large in the case of Chinese consumers, certain structural characteristics of the market and traditional and typical habits/customs of the average Chinese consumers need to be kept in mind for any successful business venture. This is especially true for luxury products like jewellery.

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Pricing practices
Most Chinese consumers are sensitive to price and will usually choose less expensive products. Price competition is the practice most frequently employed by enterprises to compete for market share. There have been ‘price wars’ on VCRs, microwave ovens, television sets and food products such as packaged milk. Jewellery industry is characterized by low-level price competition, thereby affecting at times the overall development of the industry and cutting into the profits. Many Chinese companies believe in the strategy of Bo Li Duo Xiao, which means low profit margin and volume sales.

This belief has lead to a diverse range of pricing practices, including Shi Dian Li (10 per cent profit), ex-factory price, zero wholesale mark-up, etc. All of these tactics are based on the assumption that lower price will increase the speed of turnover and eventually generate high profit. While low price strategy is widely adopted, some marketers use a high-price strategy, taking advantage of the conventional wisdom that Pian Yi Wu Hao Huo (cheap is no good) and Yi Fen Qian Yi Fen Huo (each additional cent paid is associated with additional value). This strategy is often associated with prestigious products or products that are intended to establish reputation. Foreign branded products or imported products are generally high-priced and perceived as superior products.

Other pricing strategies common to developed markets are also used by Chinese marketers including ‘price lining’, ‘skim-the-oil’ pricing, ‘odd-even’ pricing, ‘was-is’ pricing, ‘special event’ pricing and so on. Some Chinese people have a superstitious belief in lucky numbers. Marketers price their products in such a way that the numbers denote good luck. For example, a piece of jewellery may be priced at 1199 to indicate Chang Chang Jiujiu (long and lasting), or 4451 meaning Shi Shi Ru Yi (everything is as you wish). Other examples include: 518 (Wo Yao Fa, meaning I will have a fortune), 888 (Fa Fa Fa, meaning fortune, fortune and fortune), 1688 (Yi Lu Fa Fa – endless fortune down the road), etc.

Advertising practices

Advertising is an important means of marketing. Many Chinese enterprises in one way or another believe that advertising will automatically generate sales. Terms such as gross rating point (GRP) or cost per thousand (CPT) in advertising theory seem to be unknown to most advertising decision makers. Consequently, few have given thought to an integrated and holistic approach to communication. For many years, most advertising dollars have gone to television media, as they are seen as the mosteffective channels of communication to create product awareness among potential consumers in China.

Over 50 per cent of the media have agency agreements with advertising companies and nearly half their business is given to advertising agencies as a result of the agency agreements. Advertising agents normally receive 15 per cent commission on advertising sales. The majority of the media requires advance payment, while advertisers are left with little recourse if the advertisement is not aired or published at agreed times. The lack of reliable ratings data is another problem that makes it difficult for advertisers to make decisions and evaluate the effectiveness of their advertising efforts.

Comparison advertising is not permitted under the Advertising Law, nor is the use of superlatives. All advertising copy must be reviewed and approved by the regulatory authority, the State Industrial and Commercial Administration, before going into media. Claims such as ‘No 1’ or ‘Top selling’ need to be supported by documentation, such as certificates issued by the relevant government agencies or authoritative survey organizations. Higher prices used to be charged to foreign companies but this price discrimination has been removed and all companies, both foreign and local, now pay the same price. Advertising rates are reviewed and published on an annual basis.

Promotion practices

Both retailers and producers use consumer-oriented promotion techniques. These practices range from coupons, premiums and deals to prizes, lucky draws, contests and sweepstakes. When employing promotion techniques, it is important to develop appropriate consumer insights which are extremely critical in a market that is large in territory, diverse in consumer preferences across regions and rapid in its pace of change. Some research results have indicated that consumers are pragmatic in their attitudes toward promotion exercises. Buy one and get one free, price reduction or discount, discount coupons and premiums seem to be favored by consumers.

However, marketers need to be very careful when designing promotion strategies and extreme situations should to be taken into consideration. The practice of free product offers against advertisement slips from newspapers has caused chaos in some instances when unexpected numbers of people besieged the site to claim free products that could not be offered. The guarantee of 100 per cent refund for unsatisfied consumers needs to be carefully thought out to prevent exploitation of the guarantee.

Branding practices

The lack of well-known brands is considered to be one of the weaknesses of Chinese consumer products manufacturers, most visibly in jewellery, where products lack distinctiveness. A ‘famous brand strategy’ has been advocated by the government in a bid to improve the brand images and marketability of locally produced products. Painstaking efforts by local marketers have yielded some results, with some brands having established national recognition. The majority, however, has not yet made much progress in breaking away from the images of a local brand. Worse still, many brands are still unknown to their intended consumers.

Creating brand image and brand equity is an essential element of market entry in the jewellery segment. Even though China has emerged in a relatively short period of time as a major player in the gold jewellery market, her products often lack distinction. Brand marketing has only now started in China, and the Chinese consumers are more aware of foreign brands in China than their own domestic brands. Thus, brand promotion through advertising, information dissemination and innovation in design are essential to establish brand image in a market, where the concept has just started in practice and thus, the potential remains high.

Local marketers have a tendency, as they do with numbers, to favor brand names that convey goodness, luck, happiness, longevity and prosperity. In some cases, brand names are associated with historical events. Few have tested their brand names before affixing them to their products. Because of the reputation of foreign products as premium quality, many local marketers even go so far as to give brand names that read and sound foreign. Local brands are often unrelated to product content or attributes, and therefore brand communications tend to be weak. In fact until recently, little effort was invested in developing a name or product image using integrated and holistic approaches. Clever marketers skipped brand name testing by putting out advertisements inviting consumers to give names for their products, but whether the arbitrarily chosen ones are liked by consumers is still unknown. While some local marketers are trying to use brand names that have a foreign touch, foreign marketers are struggling to find a proper Chinese name for their brands. Indeed, it is often very difficult to translate a western brand name into Chinese. The usual approach is either to take on a new name and create new meaning, or give a similarly-sounding phonetic name.

Whichever way you go in adapting your brands to the local conditions, it is important that the Chinese brand names should be easy to read and to remember, and not too long. Brand names longer than four Chinese characters will be difficult both to read and remember. The name chosen should be commonly used words. Strange words will cause difficulties in brand recognition. For example, the last word of the two-Chinese-word brand for Del Monte is difficult to find in a regular dictionary. Another factor that should be taken into consideration when adopting a Chinese brand name is the diverse dialects. A brand name that reads well in Mandarin may be read very differently in different dialects meaning very different things. A normal exercise of brand name testing would cover at least three cities such Guangzhou, Shanghai and Beijing to make sure that the name does not carry undesired meanings.

However, a good brand name does sell itself on the merit that it has a good meaning. Effective branding means more than Chinese labelling. A brand image manifests itself in many ways: in a memorable brand name and well-designed logo, attractive packaging, in the quality and services associated with the brand, and, importantly, in integrated marketing communications.

Retailing Practices

Several changes have taken place in retailing since the start of reforms and opening-up in China, and jewellery retailing is no exception. Domestic jewellery sales, apart from in the materials trading centres based in Shanghai, are mainly conducted through two channels: large and medium-sized shopping malls, and franchise stores. Shopping malls are usually located in city centres and attract large number of customers; they are also better known. Promotional activities can also be better conducted in the malls, where the demand base can be expanded. However, the cost of entry into the market is prohibitively high, and includes various charges. Moreover, the practice of offering discounts in the shopping malls based on sales volume is increasing, thereby cutting into the profit margin of the producer or processor. Thus, only the biggest enterprises and large foreign jewellery firms have taken to the shopping malls option. Second, a certain time lag is involved between sales and settlement of accounts, thereby affecting the flow of funds. Third, once a product is committed to the shopping alls/departmental stores, no independent promotion is possible. The interests of the producer and the management of the shopping mall are not always identical, thereby giving rise to principal-agent problem. This also affects brand-building, and all products look the same. Therefore, sales through departmental stores and malls should be only an interim or additional measure.

In contrast, franchise stores retailing products are of great help in brand promotion. Management charges are also comparatively fixed, and enterprises can choose the location and scale of their franchise stores in the light of their financial strength. Those retailing through franchise chains are the most advanced forces. As brand consciousness increases and consumers become more and more mature, the prospects for marketing through franchise stores, by foreign enterprises either on its own, or through a reputed Chinese partner with existing network, becomes more promising and is worth giving a consideration to.
Articles source: Gems & Jewellery Industry in China, Embassy of India, Beijing
south sea pearls wholesaleFor Questions and answer you can contact & chat with us on:

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  • Twitter : @abdurrachim
  • WhatsApp : +6287865026222
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  • wechat id: chatwechat

We send your parcel via FedEx

abdurrachim miss joaquim pearl send via fedex 1
We send your purchasing parcel via FedEx, we inform you the tracking number as soon as possible

We send your purchasing parcel via FedEx, we inform you the tracking number as soon as possible

abdurrachim pearl fedex
We send your purchasing parcel via FedEx, we inform you the tracking number as soon as possible

This is my name, my phone number and my address, as a sender (written by FedEx)
This is my name, my phone number and my address, as a sender (written by FedEx)

We send your purchasing parcel via FedEx, we inform you the tracking number as soon as possible
We send your purchasing parcel via FedEx, we inform you the tracking number as soon as possible

one sample of inside the box of parcels abdurrachim missjoaquim pearl
one sample of inside the box of parcels

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