In Southeast Asia alone, the internet economy has grown by 65% during the pandemic and is expected to triple to more than $300 billion by 2025. More than 40 million Southeast Asians joined the internet (up from 360 million in 2019), with one in three e-shoppers filling their online baskets for the first time during the pandemic. 90% of them fully intend to continue their newfound habits post-pandemic.
Even in a traditionally bricks-and-mortar market like jewellery, China posted year-on-year growth of up to 20% from 2019, despite the unimaginable challenges of COVID-19. This double-digit growth owed much to new sales channels such as social media platforms like WeChat, TikTok and Weibo. In the absence of ‘try before you buy’, ever more consumers have been also using digital tools to research and choose jewellery before making a purchase.
Supply chain transparency has proved especially important for gaining the trust of newcomers, as it enables brands and retailers to foster a deeper digital engagement with the customer at point of purchase. Story-telling adds a richer dimension to the buying experience and results in a closer relationship and increased loyalty to the brand.
This need for transaction confidence inspired Everledger’s partnership with ALROSA, the world’s largest diamond producer. Together, we released a pilot WeChat Mini Program e-commerce solution to Chinese retailers – powered by blockchain technology – which allows their customers to purchase diamonds with full transparency of their origin and characteristics. This means secure and traceable diamond information (from mine to consumer) is at the fingertips of potentially a billion active WeChat users – WeChat being one of the world’s largest communication and social platforms.
By providing 100% certainty of a diamond’s origin and journey to the consumer, in an easy-to-experience online platform such as WeChat, we are confident that this innovation will set a new standard when it comes to traceability and responsible business practices. Incidentally, last year, Everledger sealed series A investment from Tencent, which develops and operates WeChat.
The race to carbon neutral
As carbon neutrality becomes a more common goal for governments and companies across Asia, understanding environmental impact has become ever more important. Companies and consumers are seeking help to understand the environmental impact of a product from across the whole supply chain rather than simply the brand who is selling it.
The pandemic has heightened attention to global health and safety concerns, and sustainability and social consumerism became more influential as a result. Pressure to share information is also growing from governments, professional groups and local communities, and communicating progress to society is no longer just labelled as CSR, but positioned as a core business strategy. The incentive of new customers – and the fear of reputational damage – has compelled companies to take action.
In particular, millennial consumers are starting to vote with their wallets, favouring brands that can demonstrate beyond doubt their ethical practices. In China, where younger consumers make up a larger segment of the jewellery market, environmental preservation, conflict-free supply chains, and carbon footprint are duly a larger part of the decision-making process.
Generation Z will be both a growth engine and a change agent for the industry, with its evolving preferences, purchasing behaviours and sustainability agenda.
At Everledger, we have recently upgraded our transparency platform to help businesses evidence their sustainability credentials in line with growing customer demand. Using a new range of features, including sustainability badges, our partners can now demonstrate the capture of data on energy use and greenhouse gas emissions across the extraction, processing and transportation of materials in the supply chain.
Authenticity at the moment of truth: the sale
Authenticity is high on the agenda across Asia. It matters from the retailer perspective, driven by the concern that companies don’t unwittingly buy and sell counterfeit products. It matters too from the perspective of consumers, who need confidence that the item is not only genuine but also well documented to re-sell on the secondary market, if they so wish.
The majority of the world’s counterfeit goods market – believed to cost the ‘real’ economy more than a trillion dollars every year – originate in Asia, as do many of the consumers. Given the growth in e-commerce, fraud is also a very real risk in the diamond market.
Identifying fake products is made all the more difficult, and so retail sites have become awash with counterfeit goods, even unknowingly. Brands are fighting back by providing consumers with access to secure and trustworthy information.
Last year, Everledger entered a partnership with JD.com, China’s largest retail platform with more than 380 million active users, and the Gemological Institute of America (GIA), the world’s foremost authority on certification of diamonds. Through blockchain interoperability technology, the Everledger Platform provides GIA diamond grading information to the JD.com Blockchain Anti-counterfeiting and Tracing Platform. Customers gain independently verified diamond certificates and origin information through the JD.com online platform, as well as on physical retail stores.
In response to customer demand for transparency, Chow Tai Fook Jewellery Group also approached Everledger to design a solution that would deliver secure, digital diamond grading reports on the blockchain. Customers of Chow Tai Fook’s T Mark luxury brand receive a permanent and immutable blockchain record of their diamond’s GIA grading information.
Effectively, T Mark diamonds are certified twice: first by Chow Tai Fook, ensuring traceability, truthfulness, thoughtfulness and transparency (4Ts), and then by GIA’s digital grading report identifying each stone’s colour, clarity, cut and carat weight (4Cs). Consumers can access this information, secured by Everledger blockchain technology, by a mere tap on a mobile app.
These industry breakthroughs add a new dimension to customers’ experience of owning a diamond. Transparency leads to confidence, which stimulates loyalty in return. It sounds like a virtuous circle worth cultivating.
ARTICLE WRITTEN BY: CHRIS TAYLOR
Chris Taylor is the COO for Everledger.