1:30PM – 3:20PM ENTREPRENURSHIP IN CHINA PART 2
CASE: JADELINK AND THE LUXURY GOODS MARKET IN CHINA
Comentario en Internet de Harvard Business Review : “The experienced entrepreneurial chief executive officer (CEO) of Jadelink International Limited strives to create a modern jewelry brand representing a new perception in jade. The CEO has achieved early success of growing sales rapidly and bringing Jadelink products to Shanghai, the trendiest city in China. But the company wants to expand business to the Asian and international luxury goods markets. This requires intensive capital to continue to build up the company scale. This case examines the consideration of venturing a new business in the China market, managing business growth and acquiring venture capital. It also allows discussion of factors leading to a successful entrepreneurship and dealing with business highly associated with industry tradition, people connection and product design and innovation”.
Q1: How would you characterize Chung as an entrepreneur? What lessons did he learn in the past few years as an entrepreneur? See the comments on above Kent Chung us the CEO and founder of Jadelink International Limited, company based in HK. He is an accountant that worked for Deloitte Touche Tohmatsu (DTT) and then he started his own accounting Firm. He likes business and he likes to be an entrepreneur, he: * Sold cosmetics in HK. He learned that he invested a lot in expensive furniture there. * Sold Silk stocks (medias de seda) in Lo Wu
* Published Puntonghua (mandarin) Books.
* Opened a Cigar shop that currently still operates in a four stars hotel (with profits). * He lost HK $12 millions in an investment of an online education project. In this case, he learned that people want pleasure and looking good, not inspiration or education. The key point is to know the desires and trends of consumers.
He summarized the lessons as follows:
* Business startup: Team spirit, company infrastructure, work coordination, trust. * Entrepreneur: Hard work, multitasking, flexibility, pressure-resistance, independence * Drivers of a company: Clear business direction and product familiarization. Mastering financial foundation is important.
First Chung bought a tea garden in 2004. Rich Chinese started to buy expensive/premium tea. Problems faced: Farmers knew what leaves are better and they keep them for themselves. Picking tea in an intensive labor, the farmer did well but the motivation dropped quickly once they make enough money to live leisurely. Manage farmers was hard.
Jade was more suited for Mr. Chang. His wife studied gemology and his younger brother’s father in law (el suegro de su hermano menor) was a veteran of the industry that known everything of sourcing and stones cutting. Jewerly market in China was booming.
He founded the company Jadelink International Limited in 2005, with the investment of a Silent Investor, and his wife.
Q2: What was the value proposition of Jadelink?
Jadelink controlled all the operation flow Material Purchasing and processing. * Product design, manufacturing and retailing took place in different subsidiaries. * Team in HK: Design
* Plant in Foshan (Guandong province): Cutting, slicing and polishing. * Several Contractors and Artisans in HK were outsourced (for final phases of the process) in order to avoid dependence of one of them.
a) Jadelink conducted market research, ask for customers’ feedback, and design according customers taste. In addition, they have an exclusive technique in stone-cutting enabled Jadelink to use almost 2/3 of a jadeite rough to make the maximum number of jewelry items.
b) Chung use to ask to candidates to probe their abilities spontaneously (designers mainly). Chung selected excellent professionals to build up the company.
How did Chung succeed in starting up Jadelink?...