In China, jade sales enter the era of livestreaming

Wang Qing was clearly unhappy with the amount being offered for a rock that might contain high-quality jade.

Speaking into his phone during a livestream auction in Ruili, a city in Yunnan province on China’s border with Myanmar, he said: “7,000 yuan (RM4,228)? For this? Before you offer a second price, friend, please take a closer look at the clarity and colour.”

Wang then moved both the flashlight and camera lens on his phone nearer to a grey, irregular-shaped rock that appeared no different from countless others to be found in China and elsewhere.

Before the phone bidder made a new offer, Wang struck up a conversation with a vendor from Myanmar standing next to him. He used simple Chinese phrases, instead of complete sentences, to make himself understood more easily. The vendor was seeking a price of 120,000 yuan (RM72,482).

Wang told the vendor: “Tell me your lowest price: 120,000 yuan is impossible. If you lower the price for the bidder, you stand a better chance of making a sale. Make some money and buy some nice shoes.”

The vendor, an adolescent casually dressed in flip-flops, used hand signals to suggest he would accept an offer of 110,000 yuan (RM66,443). The top offers from buyers in the livestream had peaked at about 10,000 yuan (RM6,040).

Wang quickly said there would not be a sale before moving on to the next piece of rock.

“The price gap between 10,000 yuan and 110,000 yuan is manageable, but the character of the stone from the Myanmar vendor is not what people in my chatroom are looking for,” he said, implying they wanted better quality.

Some 90% of the jade sold in China comes from Myanmar.

Wang, 23, is one of 415 government-authorised livestream broadcasters at the Yangyanghao Taobao Raw Jade Trade Market in Ruili.

Livestreaming at the market, which operates in an area formerly occupied by a jade museum, began in December. The market is the first and to date the only one in the country that allows online auctions and trading in raw jade through livestreams.

As China sets the global pace in e-commerce, it is doing the same in livestreaming.

Taobao, the country’s largest e-commerce platform, said its sales generated through livestreaming reached 100bil yuan (RM60bil) last year, a fourfold increase from 2017. Such sales typically involve a celebrity demonstrating a product and answering real-time questions from a digital audience using smartphones.

The trend emerged in the beauty industry in late 2015, with a number of young women showcasing the effects of a new lipstick or mascara. It has since gradually expanded to a variety of consumer products, ranging from snacks to high fashion.

But when it comes to raw jade, the price of which can range from hundreds to hundreds of millions of yuan, doubts and controversy can arise.

For the love of jade
Raw jade, which is mined in mountainous areas, is typically found in boulders that look like any other rocks. Instead of the raw jade being processed into accessories, some are put aside and sold directly to collectors as investment pieces.

The sales process for raw jade is also different to that for other jewellery. By giving the surface a little scrape-known in the trade as “opening the window”-both sellers and buyers assess the value of the stone before agreeing on a price.

Xiong Jianghong, deputy director of the Jade Association of Ruili, one of China’s largest distribution centres for the ornamental mineral, said, “It’s like wrapping a piece of black fabric over a painting and then offering you a peek of it through a hole in the cloth.

“The problem is that when most people see a patch of bright yellow, they fantasise that it is Vincent Van Gogh’s Sunflowers. But in reality, in nine out of 10 cases it is not Sunflowers but just a drawing by a kindergarten kid featuring a large sun.”

Known as dushi, which in Chinese means “gambling on rocks”, it is considered the most risky but lucrative business among all jewellery deals.

There is a variety of local slang to describe the uncertainty and difficulty of dushi. According to one saying, “With one scrape you are a billionaire, and with another you are a beggar.”

When asked about the origins of the practice, many in the business cite the story of a man called Bian He. He lost both his legs before finally proving that the stone he presented to two emperors was a piece of rare jade. Unwilling to cut open the stone completely as it would damage the jade inside, Bian, who lived during the Spring and Autumn period (770 BC to 476 BC), irritated the emperors, who thought he was lying. They ordered his legs to be cut off as punishment.

There is still no technology capable of penetrating the stone, known as “the skin”, to locate the jade and to judge its quality without breaking the stone apart.

Raw jade, the finest of which can cost as much as an apartment in downtown Beijing or Shanghai, has a unique value for investors. In addition to jewellery, it can be used to make vases, seals and even pillows.

One of the best-known pieces of jade in China is a half-green, half-white sculpture in the shape of a Chinese cabbage. The piece, which is in the Palace Museum in Taipei, is considered a national treasure signifying the craftsmanship involved in jade carving.

Xiong, who has been in the industry for more than 20 years, said: “The love for jade is in the blood of every Chinese. If you are Chinese, you will find your love for it and be ready to pay for it eventually.”

Size, weight or colour factor little when it comes to the price paid for jade.

Unlike diamonds or gold, there are no strict standards to calculate the price. Buyers’ expectations, the political situation in Myanmar, and the Chinese stock market can all affect the price. As a result, raw jade collectors have long remained a rather exclusive community-mainly the preserve of experienced, older men.

In 2014, however, the industry was affected by the anti-corruption campaign introduced by the central government, forbidding any form of gift-giving or spending with public money.

A report on the jewellery industry that year said jade sales totalled about 15bil yuan (RM9bil), a fall of 25% from 2013.

Since then, the price of jade has fallen at a double-digit rate annually, according to the Jade Association of Ruili.

Livestreaming brought jade industry into the 21st century

Due to the fall in price and a rise in domestic tourism, in recent years a growing number of amateur collectors, lured by the prospect of instant riches, have been drawn to the jade business in Ruili to try their luck.

But only a handful have struck it rich. Some have squandered their life savings, while others have spotted a new business opportunity – profiting from connecting more potential buyers nationwide with local vendors through livestreaming.

The Ruili government estimates that by the end of 2017, there were more than 20,000 livestream broadcasters from across the country in the city, which has a resident population of about 140,000.
One broadcaster even toured the city every day to display jade he considered valuable, special or even weird. For every piece sold, he took a commission of 10% of the price agreed between the vendor and buyer.

To cater to rising demand, the Ruili jade trade, which has operated since the 1980s after the reform and opening-up policy was adopted, has extended its business hours to midnight. The peak time for livestreaming is from about 8pm, when people have finished dinner and have some spare time after work.

Cai Xin, a longtime e-commerce business owner, said, “It was impossible for jade to be sold online before the advent of livestreaming.

“For years, jade has been dubbed the ‘dinosaur’ of the retail trade, available only in brick-and-mortar shops. A lack of standards has made it extremely difficult to price jade. Livestreaming has brought the industry into the 21st century,” said Cai, a native of Zhejiang province who relocated to Ruili three years ago as a consultant for the digitalisation of his family’s jade business.

Licensed livestream broadcasters only

However, problems have emerged as a result of shopping for jade online.

There have been a series of fraud scandals in which livestream broadcasters, sometimes acting in collaboration with vendors, replaced priceless jade with worthless stones and sent them to buyers after a deal had been agreed.

Yue Sanwang, a government official in Ruili responsible for market regulation, said, “It took decades for the city to build a reputation as the go-to place for authentic jade, but just months to have the reputation ruined.”

In June, thousands of jade vendors involved with livestreaming sales were ordered by the Ruili government to suspend their business and “rectify” their operations. Some of those exempted from the order put up signs in their shops saying they don’t want livestream broadcasters on their premises.

In December, an agreement was reached by the local government, the jade association and Taobao to open the Yangyanghao Taobao Raw Jade Trade Market in Ruili.

To ensure quality, an initial 415 livestream broadcasters, accounting for 10% of those in the industry, were picked, trained and licensed before being allowed into the market.

The local government is responsible for checking broadcasters’ identities and qualifications. The association authenticates every piece of jade entering the market for sale by placing one of its experts at the entrance every working day, and Taobao has provided a team to monitor the entire sales process.

In March, monthly sales at the market exceeded 400mil yuan (RM240mil), with the most expensive piece costing 660,000 yuan (RM398,663).

Cai Lingyan, the market’s manager, said, “I have been asked repeatedly why someone willing to pay such a large sum for jade did not fly here first class to make the purchase in person.

“I am puzzled. But I think it means we have managed to make online jade shopping as credible as, say, cabbage shopping,” she joked. — ANN/China Daily

Source: China Daily

To see the original article click link here

NB: The best way to find information on this website is to key in your search terms into the Search Box in the top right corner of this web page. E.g. of search terms would be “property research report”, ”condominium law”, "Puma Energy", “MOGE”, “yangon new town”,"MECTEL", "hydropower", etc.