Where is the future of jadeite rough stone industry?

In the jade industry, many people miss the heyday of the industry between 2003 and 2012 - the auction prices of raw stones hit new highs, the retail prices changed with each passing day, a large amount of hot money poured into the jade industry, and merchants had no worries about selling their goods. Unfortunately, that century-long splendor, which was achieved thanks to economic development, policy guidance, cultural needs, social changes, and public opinion orientation, has become a history that is difficult to replicate.

From a macro perspective, the industry boom at that time benefited from the following influences:

1. Special historical background

It was a period of stable development of the national economy and the people were full of confidence in the future. Over-issued currency creates inflationary pressure, and the excess funds make investors eager to find channels for investment and consumption, resulting in rapid development of areas such as real estate and luxury consumption.

2. The industry is in the growth stage

After more than half a century of discontinuity in jewelry consumption, jadeite seems to be shrouded in a veil of mystery in the eyes of ordinary consumers, and the desire to own it has given rise to market heat.

3. Imbalance between supply and demand

The origin of jade is not in China, so its supply is subject to many constraints. After the limited raw materials enter China, it is difficult to meet the huge domestic market demand. Jade prices were at their peak, increasing by 30-40% per month. The increase once again affected national expectations, and greed caused its price to continue to rise irrationally.

4. Blind investment

The high profits attracted investors from all walks of life, among which the most representative gambling on stones once triggered an investment boom. Many consumers who blindly invest with the purpose of preserving or increasing value suffer from the lack of a sound secondary market in the industry, making it difficult for them to cash out and exit in a timely manner. To this day, many investors still have a large backlog of raw materials or finished products. It is reported that a large number of practitioners have withdrawn in the past five years, with a reduction of 50,000 to 100,000 people in Ruili alone.

5. Misleading public opinion

There are too many links in the jade industry, serious information asymmetry, and insufficiently in-depth and comprehensive media coverage that misleads investors into thinking this is a highly profitable industry. As a result, many people came here because of its reputation but left in disappointment.

It is obvious that the current jade market is shrinking overall. Whether it is raw materials, finished products, practitioners or sales. The data shown in the 2017 industry white paper was a 60% reduction. The reasons for this situation include not only the impact of the economic environment, but also factors within the industry itself:

6. Loss of industry integrity

The jade industry, which once relied on good credit, is no longer as good as it used to be. Many incidents of borrowing goods and running away have occurred in Guangzhou, Yunnan and Beijing, and some practitioners have run away due to broken capital chains. At the same time, the sluggish market has caused many practitioners to start selling old goods at a loss, and the price system in the industry is very chaotic. Abnormal competitive behaviors emerge in an endless stream, with some people poaching customers, some engaging in fraud, and some maliciously slandering their peers, causing a lot of internal friction. These acts of dishonesty have significantly reduced borrowing interactions within the industry, affected the credit system, and to some extent restricted the development of the industry.

7. Insufficient motivation for innovation

Jade products are limited by raw materials and are difficult to become standardized products. Therefore, few people apply for appearance patents, resulting in the original products not being protected and practitioners lacking motivation to innovate. Among them, the capabilities of new sales channels are weak: on the one hand, most practitioners have limited cultural quality, and their ability to adapt to new sales channels is weak and they cannot keep up with the development of the times; on the other hand, the market changes too fast, from e-commerce to WeChat business to live streaming, the window period is only a few months, and the cost of innovation is too high. In terms of model, most businesses in the market choose a cooperative model in which upstream and downstream companies work together to keep each other warm and share risks. Innovation requires participation from all parties, and the communication cost is too high.

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