Home-grown jeweller Soo Kee Group has stepped up its push overseas by taking its bespoke brand to China just months after announcing its foray into Thailand.
Its Love & Co International unit is setting up a joint venture with Global Crown, which owns a leading Chinese gold jewellery manufacturer and distributor that has more than 400 franchises and retail jewellery stores across the country.
The new venture, called Diamond Avenue, requires an initial paid-up investment of 50 million yuan (S$10.1 million). Love & Co International will hold 55 per cent and Global Crown 45 per cent of the issued and paid-up share capital, under a memorandum of understanding signed yesterday.
The joint venture firm will sell bridal jewellery in China and Hong Kong under Soo Kee's Love & Co brand, which was started in 2007 to focus on bespoke engagement rings and wedding bands.
The move comes after Soo Kee said in February that it was teaming up with leading Thai jeweller Aurora Design to sell gold and diamond products, also under the Love & Co brand.
After the signing ceremony at Soo Kee's Changi Business Park headquarters, group chief executive Daniel Lim said: "For the post-1990s and millennials in China, their parents are relatively young as they got married pretty early and had children in their early 20s...In some provinces, families can have five generations. Weddings become so important, for the family to get together and for 'face' (a sense of dignity). It's a huge market to tap, and is constantly transforming."
Big families contribute money to couples who get married, and jewellery is something they spend on as it can be showcased, noted Mr Lim.
China is the world's biggest wedding market, Soo Kee said, citing a 2015 BBC article which noted that the industry's annual revenues were about US$80 billion (S$109 billion), up from US$57 billion in 2011.
A China trade research site said last year that more than 10 million couples are expected to get married each year for the next few years.
Mr Lim said the aim is to set up 550 points of sale in China, and to achieve a turnover of 2 billion yuan in five years. This will be done through a hybrid business model, where 10 per cent of the stores will be directly owned and run, and the rest, franchise stores.
"After the business gains traction, these numbers will change. While running on a franchise model is faster (for the firm), operating direct stores leads to higher profit."
Global Crown director Chau Tsan Kwan said its extensive network will boost sales in China, where it deals with more than 5,000 clients.
"Each city and province is different and we understand the customers' tastes. Chinese consumers have the spending power... but not many great options. We have confidence in Love & Co, which has focused on diamonds. The brand will work well in China as people are looking for something unique."
Soo Kee said it is looking to open flagship stores in first-tier cities - such as Beijing and Shanghai - first, and work with partners - many of which are customers of Global Crown's units - at the province level.
Mr Lim said he expects contributions from the joint venture to come in next year, the same for Thailand.