The Evolution of Corporate Innovation in the O2O Model—Case Studies in the Chinese Jewelry Retail Sector

Abstract

The latest craze of new retailing has required the traditional jewelry industry to cope with it head-on. The aims of this article are to discover how the jewelry retail companies can innovate and evolve in the current wave of new retailing and understand how they use relevant technologies in their omni-channel operations. The selected methodology is a qualitative explanatory multi-case study. Four types of enterprises of the jewelry retail sector were selected. We find that there are four corporate innovation types in the jewelry retail sector, including: price-driven, service-driven, technology-driven, and demand-driven models. Case enterprises have established their own innovation approaches with regard to the adoption of omni-channel technology. This study advocated that different types of enterprise have different channel resources and assets, so they should set up customized omni-channel strategies in accordance with the advantages of their resources and the needs of target customers.

1. Introduction

Jewelry has been developed for over 7000 years, and the jewelry industry is very traditional. With the development of Chinese society, Chinese jewelry has undergone several special periods of transformation, and this new shift in retailing is destined to be a very important leap in its development. The modern Chinese jewelry industry began with the rise of “Yinlou”, whose marketing model has always adhered to that of traditional physical stores [1]. With the rapid development of e-commerce in China, the Chinese people have become increasingly familiar and comfortable with buying jewelry of high value over the Internet [2]. The pioneer of online diamond sales in China, ZBird, has spent more than a decade building consumer trust in buying jewelry online [3]. Now that China has become the second largest jewelry-consuming country in the world, as traditional and old-fashioned jewelry industries meet advanced and cutting-edge internet technologies, they are destined to undergo a disruptive industrial change in modern times due to these new technologies.

Online-to-offline (O2O) commerce is a popular business model which links offline business activities with online channels. O2O originally involved only online and offline interactive marketing. Enterprises apply online research to lead consumers to offline purchasing, or they could use the online platform to provide coupons to consumers and allow consumers to use the coupons for use at physical stores, or with the introduction of a service for consumer to place orders online, while receiving the products of transaction at physical channel locations, guiding consumers to physical channels with the opportunity of purchasing additional products [4,5].

For the jewelry industry, new retailing is a new opportunity after the O2O operation [6]. In the last few years, some jewelry companies have been struggling with the business crisis affecting ‘brick-and-mortar’ stores, whereas other new jewelry companies have taken off with the power of the Internet. However, both the former and the latter companies have struggled in the retail environment over the last few years; on one hand, physical jewelry stores are experiencing a global physical decline, but on the other hand, jewelry e-commerce stores are struggling with the reality that consumer attention is becoming increasingly difficult to obtain. Therefore, a new retailing model that combines online, offline, and logistical attributes is becoming a new hope for the jewelry industry [7]. In recent years, with the widespread use of big data, artificial intelligence, and other technologies, the digital transformation of enterprises has become the core strategic direction of China’s technological transformation [8]. In line with the development trend, with the tailwind generated by “New Retailing”, the transformation from tradition to digitalization is a requirement of the times for the long-standing traditional jewelry industry. However, the question of how to survive in this large market and of how to obtain more dividends is worth exploring. At present, for jewelry companies, a single online or offline sales model cannot support long-term development, but combining online and offline sales models, making reasonable use of new technologies, and integrating efficient supply chains and logistics are a must.

The existing literature has explored the implementation of digital technologies in large companies [9] or innovative enterprises, digital start-ups, and high-tech giants [10], but studies that have focused on small and medium-sized enterprises (SMEs) in traditional industries and, particularly, in the jewelry industry are relatively scarce [10]. Nevertheless, this sector is one that wishes to innovate, and it is also recognized as being innovative and a contributor to the economic growth of many countries through high profits and revenues, due to the sale of precious metals [11].

The late 19th and early 20th centuries witnessed dramatic changes at the forefront of the technological landscape. Much of the development of technology did not originate in retailing, nor was it primarily developed to transform retailing, but the early adopters of new technologies were often retailers [12]. Historically, technological innovation has played an important role in shaping the retailing landscape of the time. Nowadays, a wave of interactive technologies, many of which began with the Internet, has enabled retailers to relaunch the way that they do business [13]. New digital technologies, such as big data, artificial intelligence, and 4.0 machines, are revolutionizing the way that companies conduct business [14]. These digital technologies optimize business management processes, increase operational efficiency, enhance market orientation [15], and improve the way that businesses communicate with customers; this results in better targeting processes and the ability to tailor to specific customer needs [16]. For example, Amazon and Netflix enable retailers to adopt new business models based on web-based interactive technologies. Google’s AdWords engages customers in new ways. Customer relationship management (CRM) systems revolutionize the ways in which products are supplied, handled, and delivered. Blogs, feedback forums, online product reviews, and Web 2.0 allow customers to interact with each other, and they provide tools for communication and negotiations between buyers and sellers. Virtual try-ons and online communities have significantly improved the customer experience online.

Technology is changing the pace of retailing; many studies have examined how technologies such as point-of-sale, automated teller machines (ATMs), and the Internet are changing retailing [17]. However, less is known about the impact of emerging technologies, such as micro-cloud computing, new robotics, fifth-generation (5G) telecommunications, the Internet of Things (IoT), virtual reality (VR), augmented reality (AR), and mixed reality (MR); therefore, there is a lack of understanding concerning these technologies [18]. On the other hand, the types and number of resources are the mainstay of a company’s long-term growth strategy, and they provide the company with future directions and strategies that will lead to future profit growth. For companies, the way in which they use their resources is a key factor in terms of their competitive advantage [19]. Therefore, when facing the impact of technology on the environment, companies should also grasp resources and decide on the direction of their development based on different resource attributes and the quantities of those resources [20]. As a result, when involved in omni-channel operations, business models of enterprises are different based on individual business objectives; therefore, enterprises must seek the resources they lack through the implementation of functional approaches, and they should create new omni-channel business models and competitive advantages by using complementary resources.

As a traditional retailing industry, the jewelry industry has to digitally transform in order to sustain its development in the context of new retailing. However, it also faces many difficulties and challenges. The general direction of development for jewelry enterprises at this stage is clear, and different types of jewelry enterprises should have their own methods and resources to cope with the shift to new retailing by using different resources and technologies. They should also take advantage of their respective strengths in different paths [21]. Therefore, based on the research background and the above research objectives, the research questions for this study are collated as follows: (1) to discover how the jewelry industry can innovate and evolve in the current wave of new retailing; (2) to understand how jewelry companies use relevant technologies in their omni-channel operations through their adoption of omni-tech, in addition to resource-based theories and the introduction of technological applications; and (3) to locate the developmental direction of different types of jewelry companies and the appropriate technology for each in conjunction with the wheel of retailing theory.

2. Theoretical Framework

2.1. Diverse Perspectives on New Retailing Business Models

The new retailing model proposed by Jack Ma in China in 2016 is a business model with omni-channel function and O2O as its core. The concept of O2O originally originated from group purchasing, wherein online transactions are completed offline, forming a complete ‘closed-loop’ transaction. When pure e-merchants found that they could not effectively facilitate the purchase of certain products online, they used offline physical shops to compensate for their disadvantages, making them a ‘showroom’ for e-merchants. In this sense, e-commerce has created a closed loop of transactions, but this has had a significant impact on the operations of brick-and-mortar shops. Gradually moving from the early independent O2O model of online and offline to the integrated O+O upgrade model of online and offline integration [22]. Since October 2013, Chinese brick-and-mortar retailers have been moving almost simultaneously from offline to online, either competing directly with e-merchants or trying to cooperate with O2O while moving towards O+O. Chinese retailers have reached an initial consensus with regard to the following: (1) the era of new retailing, driven by technology and customer demand, has arrived, and, thus, retailers must leverage the web, especially mobile web platforms, to carry out omni-channel retailing; and (2) physical retailers must transform their business models [23].

The “new retailing” model integrates traditional resources and optimizes the allocation of commodity resources, service resources, customer resources, storage resources, and logistical resources. Moreover, it opens up the gap between each step in the process of transforming and upgrading production, circulation, transportation, distribution, and sales, so as to realize the deep integration of online, offline, and supply chain features [24]. The development of technology is an important driving force, and the analysis of internet platforms and big data ensures important support for new retailing enterprises’ decision making, from the information mining of customers to the information processing of storage inventory behind the scenes [25]. Breakthroughs in technologies such as cloud computing, artificial intelligence, and the Internet of Things have created new retailing species, disrupted the entire process of consumer shopping, and enhanced the customer experience to a new level [26].

Alibaba, which is based in China, believes that the new retailing model helps to construct a virtuous retailing ecosystem and that it is an important business model in the post-e-commerce era—one that can eliminate the fierce standoff in the stalemate between online and offline. The e-commerce model has accumulated significant quantities of customer data and a deep knowledge of consumers, which can provide strong support for offline retailing in terms of site selection, merchandising, payment, and logistics routes. A healthy interplay between online and offline retailing can help bring more potential customers or traffic dividends to both sides, thus achieving a harmonious ‘win–win’ situation [27].

The above section analyzed the performance model of ‘new retailing’, and, in accordance with the literature, this study concludes that new retailing has the potential for technological innovations, service innovations, and omni-channel integration innovations in the supply chain, which can be used to construct a ‘new retailing’ omni-ecosphere innovation model.

2.2. Theory of Disruptive Innovation

Christensen’s book, The Innovator’s Dilemma, which was published in 1997, introduced the theory of disruptive innovation, which has had a wide impact [28]. “Disruptive innovation” was previously known as “subversion innovation”, and disruptive innovation capabilities can be defined as the ability of a company to use external and internal resources, as well as capabilities, to seek opportunities in new, underserved, or neglected market areas. By applying a focus on low-cost business models and new unserved markets, disruptive innovations are increasingly seen as a strategy for achieving continuous innovation-driven growth in low-income environments [29], which could plausibly explain why industry stalwarts fail when competing with new entrants.

Christensen’s book that continues his research, The Paradox of Prosperity, which was published in 2019, states that innovation is the process by which an organization transforms labour, capital, materials, and information into products and services. Three types of innovation were introduced: disruptive innovations, sustainable innovations, and efficient innovations [30]. Disruptive technologies are unlike those used in the mainstream industry. As a type of innovation and innovation strategy, disruptive innovation is often suggested as a strategic approach for most small businesses and start-ups facing difficulties in their formative years [31]. There are two main phenomena: low-end disruptions that occur in stable markets and that cater to price-sensitive customers, and new market disruptions that cater to customers who did not previously exist in the market [32]. In addition to disruptive ‘corner-overtaking’ technologies, there are also technologies that are designed to meet the needs of existing markets in order to maintain a competitive advantage.

Despite Christensen’s and other scholars’ emphasis on the important role that disruptive innovation can play in management, most established firms do not currently prioritize disruptive innovations because they do not seem to align with mainstream economic logic. Thus, in actual business practice, disruptive innovation does not seem to be the best option for large firms when other alternatives are available. Established firms usually do not choose disruptive innovation; instead, they prioritize their existing customers and place more emphasis on sustainable innovation; this is because it is much easier and safer to keep the firm competitive in this way [33,34]. Most ‘efficient innovations’ are process-based innovations that reduce the cost of valued activities in order to achieve better returns. Efficient innovations do not usually lead to a robust economy, but they can contribute tax revenue to the local economy and make organizations more efficient in their operations without creating a large market. They can create jobs in the short term, but these jobs can easily be transferred elsewhere.

Christensen’s earliest research described the first stage of disruptive innovation, which places more emphasis on the development of a business model to meet a gap in the existing consumer market. This is achieved through low-grade and relatively inexpensive technologies, thereby disrupting the equilibrium of the original market and gradually replacing the dominant player in the mainstream market by increasing the value of the product. However, as the innovation begins to dominate the market, it is easy to become overly focused on existing customer needs, and it is possible to lose the original drive to innovate by identifying future gaps in the consumer market; this leads to failure [28]. In The Paradox of Prosperity [30], there are four stages: (1) creating market innovations by finding new consumers at the margins of the market and creating a ‘zero-consumption’ business model; (2) holding the ladder of growth by focusing on local markets and creating value networks; (3) responding effectively to environmental barriers by creating a thriving market on the premise of creating market innovations that impact the culture and norms of a society, which, in turn, leads to the creation of new systems that meet the needs of society; and (4) moving towards real prosperity by developing the processes necessary to transform complex, expensive services into simple, affordable services that are accessible to more people.

This study references three types of innovation theories: (1) disruptive innovations, (2) sustainable innovations, and (3) efficient innovations. These types of innovation theories are used to position the methodological approach in the context of corporate innovation and the four growth stages of prosperity as an evolutionary process.

2.3. Resource-Based Theory

The resource-based theory was first proposed by Penrose, who divided companies into different resource portfolios. They stated that, in order to make profits, companies need to have abundant “resources” to effectively use the “unique capabilities” of these resources, and companies should use the internal resources of their organizations to grow [35]. Barney (1986) argued that the value of strategic resources varies; therefore, firms should first analyze their unique resources and capabilities when formulating their strategies [36]. Grant argued that the internal resources of an organization are considered to comprise the dominant ‘resource-based theory’ (RBT), which is important for strategic planning and is the basis for exploring the critical success factors of an organization [37].

The resource-based perspective is widely used to explain a firm’s strategic choices [38]. A firm’s resources determine its development path and enhance its strengths to improve its weaknesses [36]. Valuable resources also comprise a source of a firm’s competitive advantage or continuous competitive advantage [39]. Therefore, to gain a sustainable competitive advantage, companies must adopt appropriate strategies and accumulate valuable resources.

Collaboration refers to a relationship among individuals, groups, and organizations who share the same interests [40]. Collaboration is the process by which companies bet on each other’s resources and capabilities and work together to achieve certain goals. Collaborating members provide each other with a combination of resources to achieve strategic goals and unique values [41]. Thus, firms collaborate with each other during research, development, manufacturing, and sales- or service-based processes to achieve a synergy between complementary resources. This study adopts Grant’s approach of considering internal resources as the dominant resource base, but companies seek external resources that they do not have through collaboration, and they create synergies by seeking external complementary companies. In order to identify and clarify which resources have an impact on omni-channel operations, it is important to explore the characteristics and types of resources.

The resource-based theory states that a firm’s resources must possess four characteristics: value, rareness, imperfect limitability, and non-substitutability (which are called VRIN). These resources can create a competitive advantage and can be used to build superior resources. Barney (1991) argued that resources are assets that enhance the efficiency and effectiveness of a company and that resources and capabilities are the main sources of profitability for a company. The internal resources are the primary driver of sustained competitive advantages; this is in contrast to the RBV view, which states that primary external resources are the primary driver of sustained competitive advantages [42].

Reuber and Fischer developed a conceptual model through a comprehensive review of the literature in different fields. They proposed three resources that are relevant for firms that want to successfully enter the internet marketplace: online reputation, internet technological capabilities, and online brand communities [43]. In addition, trust has long been recognized as a key factor in the success of online stores [44]. E-commerce is a more uncontrollable environment; therefore, trust plays a key role in determining consumers’ purchasing decisions [45]. In addition, research by Taiwanese scholars Kuo Hsin-Chih et al. suggested that firms also implement different cooperation models of O2O depending on the resources that they need or the advantages that they gained by sharing resources [46,47].

In addition, the resource-based theory (RBT) forms an important theoretical basis for the current use of big data in new retailing; this is because it provides an important explanation for the impact of big data on marketing [48,49,50]. Companies need to change their organizational and business processes in order to act on the insights of big data [51]. The three types of resources (physical, human, and organizational capital) can regulate the processes by which evidence of consumer activity is collected and stored as big data, the processes by which consumer insights can be extracted from big data, and the processes by which consumer insights can be used to enhance dynamic capabilities and self-adjustment.

2.4. Development of the Wheel of Retailing Theory—Four Key Stages

The wheel of retailing theory, which was developed by Mcnair of the Harvard Business School in 1958, is considered to be the most authoritative explanation of organizational transformation in retailing. The theory suggests that retailing change has a cyclical, spinning-wheel-like pattern of development. There are generally three stages: entry, trading-up, and vulnerable. New retailing organizations initially adopt a low-cost, low-price, and low-margin business model, using low prices to attract consumers to form their own competitive advantage [52].

The initial ‘wheel of retailing’ explains the development of retailing formats that use low prices as a competitive strategy, such as department stores, supermarkets, and thrift shops, which have gradually developed into large-scale sales outlets with low prices and low-quality service. However, it does not explain the development of modern retailing with high prices. For example, convenience stores in Japan did not use low prices as a strategy when entering the retailing market, and shopping centres, which originated in middle-class neighbourhoods in the US, also entered the retailing arena with high prices and high-quality services. New retailing formats can cut into the market simultaneously by implementing both low prices and a low quality of service or high prices and a high quality of service. As a result, there are gaps, or a ‘vacuum zone’, in the retailing market, wherein some companies rely on the provision of services to gain new opportunities; this also leads to the creation of new formats [53].

In 1996, Japanese scholar Maso Nakanisi proposed the wheel of new retailing theory in his article entitled “Is the circle of retailing really turning?”. The theory argues that a combination of low prices and low quality of service is not a characteristic of new businesses and that retailing can be freed from price competition through technological innovation. He argued that technological innovation is the fundamental driving force behind the creation of new businesses and, thus, he introduced the concept of the ‘technological borderline’ [54]. Chinese scholar Liu Yu proposed the wheel of hyper-retailing theory by using the wheel of retailing theory as a basis in order to enrich and improve the theory. He argued that the context of each era is different and that the current context is a combination of policy-based, economic, social, and technological factors, in addition to logistics information technology and management techniques—especially technological innovations that have enabled infrastructural upgrades. This is also because of the infrastructural upgrades caused by these technologies, which have contributed to the contradiction between the continued escalation of consumer demand and the imbalance in retailing supply. As competition intensifies, traditional retailers are using new technologies to improve their ability to meet consumer demand, thereby narrowing the gap between the old and new retailing models. This has caused the competition between the old and new retailing formats to evolve into a competition between different new retailing supply chain ecosystems. The increased competition causes the blue ocean ecological niche to become a red ocean ecological niche, and a new consumer demand has emerged; therefore, this has entered the next cycle, and new developments in retailing formats have emerged [55]. In summary, this study collates the changes in retailing as it has developed. Figure 1 shows these changes.

This study synthesizes the theoretical development of the wheel of retailing theory and argues that each of the four stages comprises retailing transformation factors, temporal and spatial conditions, and environmental factors. Each of the four asserted triggers has its own rationale. Based on the theoretical development of the wheel of retailing theory, this study asserts that the conditions of the retailing evolution can be classified into the following categories: price-driven, service-driven, technology-driven, and demand-driven conditions.

3. Research Methodology

3.1. Case Study Method

A case study refers to a collection of complete data on specific individuals or groups. It comprises an in-depth analysis and an explanation of the causes and consequences of a problem; hence, a case study is a type of qualitative research method. A case is a description of the relevant facts of individual cases. It focuses on understanding the objective facts and subjective interpretations of the research object to provide a feasible solution to a problem [56].

Case studies are generally suitable for studying research issues that are relatively new in a currently relevant field—in other words, issues that have not been studied by many people or have no relatively clear theory. Their research topics are problems derived from the real environment and, thus, case studies are suitable for use in this study. In addition, explanatory case studies clarify the causes and processes of phenomena through individual cases, and they examine the explanatory power of theories that guide data collection and analysis [57]. Interpretive analyses are mainly used to understand the meaning of qualitative data—especially textual data. In other words, the purpose of interpretive analysis is to understand what the research subject said, what they did, and why, so as to clarify the behaviour of the research subject. One researcher argued that interpretive methods of research start from the position that our knowledge of reality, including the domain of human action, is a social construction by human actors [58]. This form of feedback can involve a single presentation to a group of participants from the field site to a more intensive workshop involving a wider range of participants over a longer time period [59]. Therefore, the researcher needs to sort, interpret, and explain the various primary and secondary data collected and give them reasonable interpretations, which vary depending on the theoretical perspective chosen [60]. Accordingly, the method employed in this study tends to focus on explanatory case studies.

This method was adopted for this study to illustrate the omni-channel evolution of China’s jewelry industry. In accordance with the types of O2O, namely, the online, offline, and sub-categories of China’s jewelry industry [61], four representative types of Chinese enterprises were selected as research objects. The number of cases used is essentially in line with the recommendations of Perry (1998) and Eisenhardt (1989) [62,63], and homogeneous or heterogeneous comparisons can be performed [64]. This study mainly analyzed the cases from the following four perspectives: traditional offline brick-and-mortar-based jewelry companies, digital-based e-commerce jewelry companies, emerging original Chinese designer jewelry brands, and fast-fashion jewelry companies.

3.2. Case Selection

This study adopts the theoretical sampling method, which was proposed by Glaser and Strauss in 1967. In order to avoid sociological research focusing too much on quantification, a qualitative method was established to systematically obtain data in the social sciences and focus on the establishment of theories rather than theoretical testing. In the methodology for developing theories through systematic collection and analysis of data, where the theory itself evolves over time during the research process, there is a continuous interplay between data analysis and data collection [65,66]. It is commonly used in fields where there are few theories to generate, and researchers must work in the environment where actions actually occur, analysing the relationship between informants’ perspectives and the environment through the occurrence of events [67].

Therefore, the reasons for choosing this method in this study are: (1) the author of the study is a senior practitioner in the jewelry industry, has close ties with the industry and the industry environment is always in a state of interaction; (2) the relevant theories and research of the industry are relatively few, so it is necessary to establish theoretical guidance through continuous data collection, analysis and induction, and provide data for the continuous development of the industry, so as to establish sustainable development advantages; and (3) the goal of this research is theory establishment rather than theory testing, and it is more appropriate to use the inductive method to make theories emerge from industrial cases.

Since qualitative research focuses on gaining a more in-depth and detailed explanatory understanding of the research objects (especially their inner experience), while theoretical sampling methods particularly emphasize the promotion of theory from data, the two methods are combined in order to achieve the aims of this study.

In order to achieve the aims of this study, first, four types of enterprises that aligned with the industry’s ecosystem were selected. These enterprises were either synergistic online or synergistic offline companies—they included a traditional company, an emerging designer company, an internet e-commerce enterprise, and other manufacturers. These four categories of merchants were selected for in-depth interviews based on the following criteria: (1) the business purpose or concept of the company covered omni-channel operations and technological applications; (2) enterprises that had been operating for more than three years and had good business performance; and (3) manufacturers who had won awards from the government. The samples that were ultimately selected were the following: Chow Tai Fook, which was representative of a traditional enterprise; Yvmin, which was representative of an emerging designer brand; ZBird, which was representative of an originator of internet e-commerce jewelry; Caromay, which was representative of a fast fashion jewelry company.

3.3. Data Collection and Analysis

In this study, multiple case studies were conducted with in-depth observation interviews that were designed to establish case data as part of the data collection and data analysis; then, a set of innovative evolutionary paths for the jewelry industry was established [63]. From April 2021 to December 2022, interview data were collected from the four enterprises. The contents of semi-structured interviews (in Appendix A) with business operators were used as the main sources of information [68], and the relevant literature, reports, network news, and other market research data were used as secondary sources [69].

The interview subjects are listed in

Table 1. Interview-related information table.

Interviewed Company	Type of Company	Interviewed Executives	Interview Duration	Number of Interviews
ZBird	Medium-sized enterprise	General Manager of Innovation (A1), Director of Branding (A2)	2 h	Five
Yvmin	Micro-enterprise	CEO (C1), Director of Marketing Operations (C2)	2 h	Four
Caromay	Small/Medium enterprise	CEO (D1), Director of Marketing Operations (D2)	2 h	Four
Chow Tai Fook	Large enterprise	Network video, News, and Other Materials (B1, B2)	2 h	Five

. The two core executives of ZBird Jewelry, an originator of China’s jewelry e-commerce industry, the founder and operations director of the designer brand representative, Yvmin, and the CEO and marketing director of the fast fashion industry representative, Caromay, took part in on-site interviews lasting nearly two hours each. Moreover, the longitudinal data of Chow Tai Fook, which was representative of a traditional jewelry company, were obtained and analyzed with several methods, including online video interviews, documentaries, related annual reports, company files, and business media. All answers to questions were recorded, transcribed, and translated from phonetic text into Chinese before detailed planning and arrangements took place. Interviews were analyzed independently by each interviewer, and they were discussed together to reduce the subjectivity of the material. Follow-up communications were also conducted with the respondents via email and telephone to clarify some issues. The interviewees’ codes are as follows: A1, A2, B1, B2, C1, C2, D1, and D2 (in order of the case description, as detailed in Section 4).

There were three evaluation criteria for this case study: (1) multiple sources of evidence; (2) a database of case studies; and (3) a chain of evidence. Case study surveys should adhere to the principles above to ensure that the quality of information is sufficient. The data collected in this study were mainly primary data that were supplemented by secondary information through in-depth interviews of individual cases. They were also supplemented with participatory observations by the authors, and the research findings are provided in the following sections.

4. Case Description and Introduction

4.1. ZBird

ZBird is currently one of the largest e-commerce jewelry brands in China, and it is mainly engaged in the sale of diamonds. It is a typical e-commerce jewelry brand in the industry, and it is the earliest instance of an enterprise operating as a pure e-commerce company in China’s jewelry industry.

Regarding the disruptive opening of new gaps in the market, ZBird has adopted a super-value strategy to create an online sales model, and its tailwind is generated by using the Internet Plus strategy. Given its online operations in the early stages of its development, it provides competitive prices that are far lower than those found offline. Moreover, it has its own market that can expand into the business space in the traditional luxury industry with the introduction of the International Diamond Identification Certificate System. Providing high-quality products at attractive prices has become their main way of winning over the market, which has also prompted a revolution in the profitable diamond industry.

Concerning periods of sustainable growth, after receiving an external capital boost, ZBird examined the layouts of first-tier cities, opening its first official offline shop with the support and opportunities received from the aforementioned capital. ZBird experimented with the O2O business model by combining online and offline sales models; this resulted in heightened traffic due to the online sales model, which brought customers into the offline brick-and-mortar shops for a physical experience.

In terms of facing environmental barriers, as online competition becomes increasingly intense, the dividends that can be obtained become less lucrative. It may be a struggle for the online model to give customers a good experience and, thus, there is a low level of trust in terms of the expensive materials used. This is why ZBird has embarked on a strategy wherein they collaborate with offline brands in order to attract more offline customers. This is intended to give existing customers a better experience and increase the spread of the brand’s effect. The company has also exhibited its innovative nature through the use of various technologies and models under Industry 4.0, by placing the overall operation of the company under the O2O framework and opening up an omni-channel model to monitor customer acquisition, experience, and transactions, in addition to the combination of online and offline models. Compared with the previous pure e-commerce model, the introduction of offline physical shops and an online store has provided customers with a rich experience, allowing customer trust, stimulated customer demand, and greatly enhanced customer loyalty to be gained.

With regard to periods of initial prosperity, ZBird has responded positively to the continued expansion of new retailing. Eighty percent of the brand’s revenue is generated through traffic introduced via its online marketplace. Since 2012, when additional physical shops were established, its share of revenue has continued to expand; the revenue earned in 2012 was 1.5 times greater (relatively speaking) than that in the previous year, reaching USD 125 million in sales. The company has now developed its own database, which is one of the most important features of the company, and customers can participate in their own customization platform, “Diamond Ring Master”, which is currently their main innovation in terms of marketing. Their share of offline transactions has expanded, and the bulk of their transactions are now completed offline. They have also increased their number of online transactions over the years, with online transactions exceeding 20% of all sales and reaching 35–45%.

The development process of Zbird is shown in Figure 2.

4.2. Chow Tai Fook

Chow Tai Fook is one of the earliest traditional jewelry brands in China. At the same time, it is also an internationally renowned brand. In 1929, their first jewelry and gold store was opened on Hongde Road, Guangzhou. When Chow Tai Fook was first established, there was no internet sales model. Therefore, Chow Tai Fook focused on its offline development. As a result, Chow Tai Fook gradually moved their “gold shop” business model in Guangzhou to Hong Kong, where they opened their first jewelry company, Chow Tai Fook Limited. They were fortunate to be among the first private companies to lead the jewelry market in an era when only shops were available for shopping.

Concerning periods of sustainable growth, with reforms and the ‘opening up’ of the mainland, Chow Tai Fook seized the opportunity to enter the market of mainland China, and it grew rapidly. In 1998, the company returned to the jewelry market of mainland China with the opening of its first retail outlet in Beijing. After 2000, with the continued development of urbanization in mainland China, the company began to expand from Beijing to the rest of the country. In 2014, the company opened its 2000th retail outlet. The company acquired the high-end diamond brand HEARTS ON FIRE and launched its own diamond brand, T MARK, as well as the trendy jewelry brand, MONOLOGUE, and the luxury honeymoon jewelry brand, SOINLOVE. Therefore, Chow Tai Fook has created a multi-brand matrix and provided a targeted retail experience for different consumer segments with a diversified brand strategy, thus enabling further steady development.

In terms of environmental barriers, the Chinese market has been squeezed and occupied by foreign jewelry brands, which have brought new competitive pressure to the development of Chow Tai Fook. Moreover, with the continuous development of internet technology, e-commerce platforms were launched, and they have prospered. At that time, Chow Tai Fook already had more than 2500 offline stores. Furthermore, Chow Tai Fook charged people high prices, with gold as the main product, which is suitable for middle-aged people; this brought difficulties to the development of Chow Tai Fook’s jewelry. In December 2010, Chow Tai Fook entered the e-commerce industry by partnering with the Jingdong platform, and with the cooperation of the JD e-commerce platform, Chow Tai Fook began to transform its brand style, sales channels, and logistical services, while achieving better returns.

Concerning periods of prosperity, Chow Tai Fook continued to adjust its development model as the market changed, and in 2016, it proposed its own smart manufacturing model. With the help of offline shops, it created the online order–offline delivery sales model. Offline shops also provided customers with a real sense of experience, thus enhancing customer trust and allowing the return rate of jewelry to be reduced. It also provided customers with a seamless online and offline shopping experience, bestowing Chow Tai Fook Jewelry with a new user base, brand vitality, and growing revenue.

Figure 3 shows the development history of the Chow Tai Fook Enterprise.

4.3. Yvmin

Li Min and Zhang Xiaoyu are the founders of Yvmin, and they are from an outstanding new generation of Chinese designers from the 1990s. They graduated from the Central Academy of Fine Arts, and they received professional training in jewelry design. In 2012, the two co-founded the Yvmin brand, which they started with their own jewelry studio. Designing jewelry was originally a hobby for the founders that served as an outlet for expressing their unconstrained ideas through accessories. They began to collaborate with art galleries, developing some high-quality personalized products and, thus, establishing themselves within a niche market concerned with personalized goods.

Regarding periods of sustainable growth, as China enters a phase of “independent design”, the Chinese government is developing and supporting the creative industries in areas of clothing, leather-based goods, and accessories. Fashion events (fashion shows, fashion fairs, design competitions, etc.) are becoming increasingly popular, and Chinese design schools are placing more emphasis on the development of fashion design courses and training new talented designers. Fashion media magazines play an important role, acting as a bridge between designers and the public. They spread fashion-related messages in the public sphere, and they promote emerging designers [70]. Yvmin is frequently seen at fashion shows and well-known fashion events, and its products are often shown and disseminated by celebrities and opinion leaders. Given the convenience of ‘online shopping’, they have opened their own Taobao shops with individual designs.

In terms of environmental barriers, with the obvious rise in sales following a high degree of exposure due to magazine appearances, the founders started to commission production and build their own supply chain from an initial small production batch themselves. The professional designers came from a background of designing wherein they were fully involved in the design and production of goods; then, they divided their energy among marketing, shop management, communication, and sales. This was a big challenge for designers who had not been involved in commercial operations. They also grew as they continued to learn.

Concerning periods of initial prosperity, sales rose significantly, and they started to cooperate more frequently with offline shops. At first, Yvmin was only selling in shops in Beijing, but after 2016, the brand also entered several shops in first-tier cities such as Shanghai. Founded ten years ago, the main focus of this brand is on the online sales model and cooperation with offline boutiques. In 2019, the sales of Yvmin reached USD 1.4 million, which has enabled a level of systematic brand commercialization to be established. At present, the company’s internet sales have stabilized, and the next step for Yvmin is to deepen cooperation with offline physical stores to provide customers with a better consumer experience.

Figure 4 shows the development process of Yvmin.

4.4. Caromay

With regard to finding new market entry points, Caromay, the main force behind fast fashion jewelry brands, was established in 2007, and it is mainly engaged in the retailing and trade of fashion jewelry. At that time, the founders mainly wanted to make a living through a small business; the Chinese internet market had just opened up and was particularly lucrative, especially in Guangzhou. Guangzhou had a better environment for conducting trade transactions and, thus, they took advantage of the initial internet boom to open their own Taobao shop and self-run a wholesale distribution website.

Regarding periods of sustainable growth, the Caromay jewelry brand was launched in 2011 after the trade business had grown. At the beginning of the 21st century, the US model, which focused on the latest trends at low prices, emerged as a way to target mainstream consumers [71]. Moreover, the free and open economic environment in China attracted many international fast fashion companies to the Chinese market. These companies (e.g., Zara) had a significant impact on the way that Chinese people consumed and gave their attention to the emerging retail industry of fast fashion. Caromay utilized the fast fashion model and entered Taobao in 2012. Given its keen sense of fashion, Caromay quickly captured the trendy elements of Japanese-, Korean-, European-, and American-style jewelry; this impressed consumers who pursued high-quality jewelry at low prices with advanced technology, superior materials, and popular designs.

In terms of facing barriers, with the expansion of similar brands in Tmall and Taobao, online competition has become increasingly stimulating, and the dividends of the network have become increasingly diluted. Faced with problems concerning the development of the general environment, Caromay began to cooperate with major well-known e-commerce platforms in 2013 (e.g., Pinduoduo, JD, Jumei Youpin, etc.), which opened up more channels for sales; essentially, Caromay cooperated with any platform that was suitable for them. Given their entire product line, ability to grasp trends, the quality of their goods and services, and their good value-for-money, they quickly gained popularity among consumers on these platforms. On many of the platforms with which they cooperated, they soon became an influential brand, ranking in the top five and top ten brands of this type.

Concerning periods of initial prosperity, given its more mature business model, its rich product line of fast and repeated calculations, and its efficient supply chain, Caromay gained a great deal of traffic from online channels. Moreover, it provided users with a high-quality shopping experience, with excellent product quality, and with meticulous and thoughtful service. It has gained favour and a good reputation with millions of young and fashionable consumers in the industry. Currently, Caromay ranks among the top ten brands on Tmall and among the top three in China when compared with similar brands. In terms of the growth rate of e-commerce platforms, it tends to gradually slow down until it reaches a normalized state. Regarding the current environment, which comprises live new media e-commerce, the company is focusing on actively developing its own live videos with a goods segment, in order to obtain new revenue growth and development-based prosperity.

Figure 5 shows the development history of Caromay.

In sum, the characteristics of the four companies in the case studies are summarized in

Table 2. Comparison of the characteristics of the enterprises in the case studies.

Chinese Jewelry Enterprise Classification *
Business Type	Representative Brand	Establishment Year	Number of Stores	Average Customer Unit Price	Channel and Model	Advantages	Challenges
Traditional (Large Enterprise)	Chow Tai Fook	1929	5000+	1162 USD	Traditional chain stores and e-commerce	Strong business system. support with a complete offline network of physical stores.	Requires a strong management and operation team as support. Enterprise operation is asset-heavy.
E-commerce (Medium-sized Enterprise)	ZBird	2002	80+	3633 USD	E-commerce and experience store	Solves the problem of customer trust encountered on e-commerce platforms. It increases the probability of sales and improves customer recognition of the brand.	The target group range is relatively small, which virtually reduces the efficiency of the enterprise and increases the operating costs.
Designer (Micro-Enterprise)	Yvmin	2012	50+ (Agency store)	116 USD	E-commerce and boutique distribution	Consumer brand loyalty is high, and it attracts repeat customers. Relatively asset-light.	The audience is small, and the customer experience is weak. The design cost is high, and the agents sometimes do not comply with the brand rules.
Fast fashion (Small and medium-sized enterprises)	Caromay	2011	0	12 USD	E-commerce	Online channel sales, light assets, and high traffic. Small profits but quick turnover and low return rate.	Consumer brand loyalty is low, there are few repeat customers, and the prestige of the company is weak.

* Data source: Collated from this study.

.

5. Research Results and Discussion

5.1. The Evolution of Omni-Channel Operation in the Jewelry Industry

In accordance with a summary of the development of research concerning the wheel of retailing theory, several important theories regarding retailing have proposed factors that stimulate retailing transformations. The results of studies that have used the wheel of retailing theory explain the differences among the orientations of retailing content caused by price, service, technology, and demand. This study found that these factors are in line with the current segmentation of the Chinese jewelry industry, with four types of jewelry companies moving in accordance with the four different factors.

Based on the four variables of retailing, in accordance with the four periods of the wheel of retailing theory (Figure 6), it can be argued that there is variability in the orientation of the four main types of businesses.

“For over 90 years we have focused on two things, the best products and service, this is Chow Tai Fook’s core competence. The brick-and-mortar shop provides services with warmth, so I think the offline shop is still very important.”—Chow Tai Fook

“We gave a questionnaire to all our users. When they used our technology (the mini program)—no one said it doesn’t work—it really solved a customization problem. In the past, regarding customization, the customer discussed a custom design with the designer, and due to the design process and communication, it took a long time. Based on the above, I think that custom jewelry will be popular in the future, and the most expensive thing about customization, in the traditional sense of designing, is the labour cost. Our program is a real solution in terms of customization for the masses, I just need enough model libraries, and the models inside our program will be able to solve this problem.”—ZBird

“Our consumer base is 18–30 years old, mainly from first- and second-tier cities, including some students, white-collar workers, and some sophisticated mothers. There are quite a lot of mothers with children, but the cities are basically in the first and second tiers. Mothers have strong spending power, and they spend more time shopping, whereas students may shop but have less spending power. Students generally buy entry-level models, and we have a low-price range of USD 40–100, with the cheapest being USD 40, which is from a low-price product line. The USD 100 to 320 range is a little more high-end, and it comprises our main range of products. Our next main direction in terms of development will probably concern the range of products from USD 140 upwards. Now, the lower-priced products can play a good role in attracting traffic, and younger people’s first purchases will probably be dominated by these kinds of products.”—Yvmin

“We control products priced at USD 14, which account for the bulk of sales, like necklaces and other configurations in the product line. Our product prices range between USD 14 and USD 28, but overall, through trading and customer analysis, basically, our current overall average customer unit price is about USD 12.50.”

Proposition 1.

This study categorizes four types of jewelry businesses, and it presents a panoramic view of the current development of the jewelry industry in China.

Based on the development of the wheel of retailing theory, the conditions for the evolution of retailing advocated in this study are as follows: price-driven, service-driven, technology-driven, and demand-driven conditions. The definition of Chinese jewelry enterprises can be summarized as follows:

• Price-oriented: Fast-fashion enterprises are enterprises that mainly use price to influence consumer action. They are characterized by low prices, good quality, and a high level of consumption.
• Service-oriented: Traditional jewelry companies are companies with a certain history. They are mainly offline brick-and-mortar shops, but they have online channels. They provide quality assurance, a quality service guarantee, and customer trust. They are characterized by high-quality service, high-quality goods, high-value goods, and a good reputation.
• Technology-oriented: E-commerce jewelry businesses comprise a category of jewelry business that mainly relies on online sales. They are characterized by technology, youthfulness, high value, and fun.
• Demand-oriented: Designer jewelry companies occupy a niche market. They are jewelry companies with unique stylistic features and a group of loyal customers. They are characterized by a strong sense of design, a fashionable personality, and a high level of customer loyalty.

As is evident from the stepwise progressive graph shown in Figure 6, in terms of the development of retailing from a price-oriented to a demand-oriented model, demand-oriented businesses have the most room for development. Price-oriented businesses have the least room for development, followed by service-oriented and technology-oriented models. Moreover, designer-based businesses gain customer recognition, and they align well with consumer preferences by satisfying customer demands and providing original designs. They provide consumers with a sense of demand that is difficult for other businesses to satisfy.

5.2. Technological Applications Regarding Innovation Evolutions in Jewelry Companies

We analyzed and categorized the new technologies that are currently used by the main types of jewelry companies in this study, as shown in

Table 3. Technology and technological applications in the evolution of the innovations of the four companies in the case studies.

Company	Technology	Technological Applications *
Chow Tai Fook (Traditional Jewelry Enterprise)	AR technology, virtual fitting, Cloud Kiosk, RFID Smart Tray, D-ONE jewelry online customization, CloudSales 365, e-Auction, Biztalk, Digital management tools (BI Easy, iTongbao, etc.).	(1) Clicking on the AR device’s screen enables customers to select their favourite jewelry for a virtual fitting. (2) An RFID smart tray with radio frequency technology, obtained through big data analysis and processing, enables the company to record the information of customers, more accurately connect with diversified customer groups, and improve transaction efficiency. (3) The Cloud Kiosk enables customers to use self-service when shopping, which enhances their consumer experience. Online orders from brick-and-mortar shops are connected to e-commerce platforms, thus shortening transaction times and allowing consumers to choose from more than just “in-store” options. (4) The D-ONE WeChat app allows consumers to select diamonds and styles in accordance with their personal preferences, enabling them to enjoy the unique experience of customizing their jewelry. Delivery is completed within 24 h of placing an order, thus solving traditional retail stock problems and achieving a “zero inventory” sales model. This improves the efficiency of customization and the consumer experience. (5) CloudSales 365 enables brands to enhance customer interactions through social networks. On the one hand, this leads customers to the online flagship shop, and on the other hand, it provides staff with easy and comprehensive tools for serving customers, allowing them to communicate with and help customers anytime and anywhere. It provides a 24/7 humanized shopping experience for customers. (6) An online auction platform for jewelry to increase online sales while bringing a different consumer experience to customers who seek excitement and entertainment. (7) An internal chat tool that helps staff engage in conversations with different customers on a single platform, and through social media platforms, it helps drive traffic to Biztalk. This enables the company to reach more new customers and provide them with personalized service and product recommendations. (8) External collaborative tools are used to monitor businesses in real time; they make reasonable decisions for territory-wide marketing, and they support the operations of shops in different markets in a targeted manner. They enhance the company’s underlying linkage capabilities, realize the synergy and symbiosis within and outside the organization, and drive the growth of corporate value.
ZBird (E-Commerce Jewelry Enterprise)	Autonomous programs, AR, 3D rendering.	(1) The development of autonomous mini-programs solves the problem of customized online purchases. (2) AR clicks enable customers to independently try on items, thus enhancing the consumer experience. (3) The jewelry products are displayed on mobile phones in a pure 3D form with high definition and a high degree of realism, presenting customers with a 360-degree sense of stereo and space and providing them with an immersive viewing experience. This system can present a realistic display of a real diamond ring that is 98% accurate.
Caromay (Fast Fashion Jewelry Enterprise)	ERP, CRM, PDA intelligent terminals.	(1) ERP can help rationalize the deployment and accurate use of existing enterprise resources, and it can provide a decision support system that enables the real-time analysis and judgment of key issues, such as product quality, market changes, and customer satisfaction, to ensure that the enterprise can achieve the maximum economic benefits. (2) The CRM customer management system can effectively organize and deploy enterprise resources to manage customer-centric and maintenance operations in order to improve profits and customer satisfaction. It can enable the accurate maintenance of effective customers. (3) The accuracy and efficiency of warehousing and order distribution can be improved, in addition to the intelligent inventory of goods and associated distribution systems.
Yvmin (Designer Type Jewelry Enterprise)	Three-dimensional printing, virtual products (digital jewelry).	(1) To make up for traditional manual craftsmanship, it is possible to break through the limitations of shapes and materials and provide more freedom in terms of design. The direct input of data into software greatly improves the accuracy of the data and ensures that a design achieves the desired effect. It also facilitates the development of customization services, allowing designers to set data in accordance with a customer’s size so that the final product fits the customer’s body better. (2) Using digital technology can bring ideas that are not possible in reality to life. Designs can be given a richer colour palette, richer materials, more exaggerated proportions, and unconventional styles. Creating virtual products that provide new fashion experiences and that redefine the future of fashion and lifestyle can be achieved through interactions between the virtual and real world.

* Data source: Collated from this study.

.

In accordance with the literature, the fashion accessory and jewelry industry has been ‘late’ in terms of the development of new technologies, and it is less likely to adopt them. Some retailers rarely adopt technologies, adopting three or fewer [72]. Academic research concerning the use of omni-tech in omni-channel operations is scarce, despite the fact that it is an important component of omni-channel operations and digital services. Upgrading traditional product service systems will undoubtedly require technology. This study, therefore, adds relevant information to the literature concerning the adoption of support technologies in omni-channel operations. In particular, this study notes the integration of technologies and additions to technologies when used in traditional industries, such as the jewelry industry.

The study shows that the industry leader, Chow Tai Fook, the largest jewelry company in China, has established its own system with regard to the adoption of omni-channel technology, and it has become a leading company in terms of its response to new retailing. This is because it has focused on digitally upgrading its traditional shops. The company has installed O2O centres, called “Cloud Kiosks”, in first- and second-tier cities in China. These are designed to connect shops with online orders through its e-commerce platform. They have already installed “Cloud Kiosks” in 45% of their shops, thus helping customers to have an enjoyable shopping experience and transforming limited shop storage spaces. The kiosks have allowed a 100 sqm shop to sell hundreds of millions of products that are in stock, thus significantly increasing shop floor space efficiency. The ‘Smart Tray’ improved shop management efficiency, and ‘CloudSales 365’ has improved the efficiency of customer management, reaching over 5 million customers, with a sales conversion rate that is 10 times higher than that of a traditional full e-commerce pipeline. The ‘D-ONE’ digital jewelry customization platform allows for 24 h speedy customization and delivery (using the C2M model), thus surpassing the typical 15–30 day customization time. Reduced inventory costs, with a turnaround time of 1 month, enabled the previous 12-month turnaround time for diamonds to be surpassed. The jewelry auction platform enhances the level of customer entertainment and experience. Adopting an external collaborative digital management tool to monitor operations in real time helps with business growth [73].

“Digitalization will be one of our important differentiating capabilities. We’re not just doing retailing, we’re doing it as a platform operator across a variety of channels. We’re going to be an ‘always-on’ jewelry stylist, and to be able to do that, technology and data are essential.” (B2)

As a company with its own internet gene, ZBird started with more innovative abilities in terms of e-commerce. Currently, it takes advantage of the wave of internet developments, and it focuses on building a retail platform wherein business interactions and information interactions between customers and the company can take place. Given the new technologies involved with internet development, as well as independent research and the development of applications, the use of current high technologies, such as augmented reality (AR), 3D printing technologies, and so on, to provide the customer with online experiences, has enhanced communication between the brand and the customer, resulting in higher revenues [3]. In addition to online technological innovations, recent offline experiences in shops have continued to provide offline interactions and games for consumers to maintain customer attention, nurture customers, and build customer trust. They also leverage the platform and the network advantages of new retailing to support DIY customer customizations and other personalized services that are different from those of traditional offline models. This enables the company to meet more customer needs and maintain a high level of customer loyalty.

“On the technology side, we spent three years developing our own mini-program, and the response has been very good. This really changes the consumption pattern. ZBird is becoming more offline, and if it goes back online, it must use this model. It really doesn’t require a shop at all for customers to buy and design a ring because the 3D and AR technology used produces a reproduction with almost 95% accuracy. We have done research, and the customer feels that the ring they get and the one they see are basically more than 95% accurate. Our small program will probably be one of our most important products over the next five years.” (A2)

Fast fashion jewelry companies that rely on the online volume of sales make use of the power of technology to efficiently control and manage the supply chain. They use intelligent tools to take stock of deliveries and improve distribution accuracy and efficiency, thus allowing customers to achieve the best shopping experience. The company uses ERP to deploy corporate resources and analyze customer satisfaction after their purchase, to ensure good business operations and to maximize economic profitability. The CRM customer management system accurately maintains customer demand and effectively maintains customers. At its core, the system values customers and achieves effective service.

“We welcome the introduction of some technologies into the presentation of our products or services for our customers.” (D1)

“We currently focus on product presentation, order transactions, data, and operational analysis for our B2C platform, and we use a series of management systems, such as ERP and CRM, to meet product management, order delivery, after-sales service demands, etc. The system functions and service support are leading the industry. For example, our warehousing and order distributions are all operated online using intelligent terminals such as PDAs to ensure accuracy and efficiency. We will also develop and utilize technologies for scenario-based immersive experiences to better showcase our brand and enhance the shopping experience for consumers.” (D2)

Some designer brands that are on the rise use more technologies, which are mainly for enhancing the customer experience and enriching materials. For example, virtual jewelry for entertainment purposes has been developed for consumers to have fun experiences. This closely aligns with the current popular concept of a ‘meta-universe’ as part of a more experimental approach, but it is clear that emerging groups in the jewelry industry are trying to incorporate future trends by using technology. For example, Tiffany, a major international brand, has also developed its own NFT jewelry, envisaging the need for more branded virtual jewelry for people who spend time online. These technologies can further drive consumer spending, and consumers enjoy such entertaining experiences. Such companies use 3D modeling combined with printing technologies to develop more distinctive materials that are not limited to precious metals. This resolves the limitations involved with traditional processes, and this technology allows companies to develop more styles with distinctive characteristics in their designs.

“We’ve done virtual filters, virtual jewelry. I think we use technology mainly to make people think the brand is creative or interesting, but there doesn’t seem to be much in terms of conversion. Technology, for us, is more about enhancing some of the novelties of the brand or it is for interaction purposes, when your own customer base likes the technologies that you offer and they don’t have to pay to play with them, it’s kind of an added interactive thing.” (C1)

“We often use 3D printing technology now, it’s very precise, it cuts out some of the process and helps us save a lot of time. Printing lowers the probability of making mistakes. If it was handed over to a traditional jewelry factory, there would probably be quite a long time period involved, so it’s a good time for 3D printing at the moment.” (C2)

Some international jewelry brands, such as Bvlgari and Cartier, have followed their lead in quickly moving to digital spaces such as Tmall and other online Chinese platforms.

Proposition 2.

Applications of technology for omni-channel operations that are implemented by players in the jewelry industry can be divided into the following four categories: vertical self-built technology, which enables retail transactions; internal self-made technology, which changes the retail environment; externally adopted technology, which facilitates retail effectiveness; entertainment-providing technology, which enhances retail interactions, etc.

A study found that leading Chinese jewelry companies have actively engaged in the new retailing transformation by relying on the adoption of omni-channel technology to achieve digital service transformation and create a new, upgraded space. The larger the company, the more internalized and vertically integrated it is, the more it needs and has the ability to produce its own omni-channel technology, and the more technology it adopts. Conversely, smaller companies with low internalization can develop their technology through strategic alliances or can outsource technologies [74]. Accordingly, this study classifies jewelry manufacturers’ omni-channel technology applications into the following categories based on the four aspects of technological changes in retailing noted by Hagberg (2016) and others [75]: vertically self-built technology, which empowers retail transactions (e.g., Chow Tai Fook); internally self-produced technology, which transforms the retailing environment (e.g., ZBird); externally adopted technology, which facilitates retailing effectiveness (e.g., Caromay); and entertainment-providing technology, which enhances retail interactions (e.g., Yvmin).

This aligns with today’s academic findings concerning the idea that manufacturing companies are increasingly combining traditional products and services with digital content [76] and that digital content is almost completely differentiated across different sizes and types of companies. The “digital servitization” initiative leads to strategic differentiation [77], which also creates the premise for a differentiated and more disruptive transformation of companies [78].

It is clear that, in China, traditional luxury companies are already heavily embracing technology to support omni-channel operations, and new retailing is inevitably the new route for jewelry companies.

5.3. Stages of Jewelry Business Development

Based on the paradox of prosperity in the literature concerning the four stages of business development [30], the stages of jewelry business development are as follows:

• Innovative opening of a new market;
• Sustainable growth;
• Effectively facing environmental barriers;
• Moving towards true prosperity.

By combining our findings with the resource-based theory, we categorized resources as primary internal resources and complementary external resources (Figure 7). The growth of an enterprise cannot be achieved without the integration of resources, and the effective use of resources is the greatest asset for enterprise development. This study summarizes and analyzes the various resources used in the evolutionary development process of each of the four types of enterprises.

In terms of the development stages and resources used by the four jewelry companies (

Table 4. Internal and external resources for the four stages of four business growth.

Company *	Stages	Internal Resources	External Resources
Chow Tai Fook (Traditional Jewelry Enterprise)	Period of Start-up	Core competencies: gold processing and manufacturing. Core obstacles: pressure of capital. Value: the high-value economic attributes of the product material used—gold itself. Rareness: the scarcity and value retention of the gold material. Imperfect imitability: the high threshold and high standard of gold raw materials. Non-substitutability: research and development capabilities for gold materials.	Support from local authorities and industrial associations. Global diamond head company (De Beers) allotment of patent rights and sales rights.
	Period of Sustainable Growth	Core competencies: ability to expand product lines and open physical shops. Core obstacles: liquidity pressure, heavy assets. Value: the high-value economic attributes of precious metals and diamonds themselves. Rareness: the scarcity and value retention of precious metals and diamond materials. Imperfect imitability: the high threshold and high standard of being able to acquire gold and diamond raw materials and the ability to communicate and collaborate with the government and those in the same industry. Non-substitutability: strong economic turnover and pressure capacity, self-built factories, and systematic operational management.	Support from local authorities and industrial associations. Matching outsourced manufacturing facilities for products. Cooperation and support from major global diamond suppliers.
	Period of Facing Environmental Barriers	Core competencies: process innovation and product development capabilities. Core barriers: solidified and established brand image. Value: the high-value economic attributes of precious metals and precious stones themselves and the brand culture and values. Rareness: the scarcity and value retention of precious metals and stones themselves. Imperfect imitability: strong economic turnover and pressure capacity, self-built factories, systematic operation and management, and strong sales service management. Non-substitutability: innovative power of product process research and development, leadership in the precious metal jewelry industry, and foreseeable insight into and action in the industry’s development.	Local government and industrial association support. Cooperating with outsourced manufacturing facilities for product design and processing. Cooperation and support from large global diamond suppliers. Cooperation and support from e-commerce network platforms. Cooperation and support from design institutes. Support from financial institutions.
	Period of Prosperity	Core competencies: expansion to open shops and continued sinking to occupy the offline market. Core obstacles: fashion innovation demanded by new consumer needs for lightweight gold jewelry. Value: the high-value economic attributes of precious metals and precious stones themselves and brand premiums. Rareness: the scarcity and value retention of precious metals and precious stones themselves. Imperfect imitability: strong corporate economic strength, self-built vertical factories, and its own developed intelligent system management system, as well as the quality of online and offline services. Non-Substitutability: the ability to continuously maintain leadership in the same industry and the influence of the leading position. Brand communication influence.	Cooperating with outsourced manufacturing facilities for product design and processing. Cooperation and support from large global diamond suppliers. Cooperation and support from e-commerce network platforms. Cooperation and support from design colleges. Support from financial institutions. Support from merging and acquired brands.
ZBird (E-commerce Jewelry Enterprise)	Period of Start-up	Core competencies: internet genes (knowledge of internet operations) and product assurance. Core obstacles: financial pressure on goods. Value: the high-value economic attributes of the product material used and the diamond material itself. Rareness: the scarcity of the diamond material itself and the preservation of value. Imperfect imitability: high-quality materials and high-cost performance. Non-substitutability: subversive first operation mode of selling diamonds on the Internet, which is not irreplaceable, but rather influenced a group of peers to imitate them. Irreplaceable core resources have not yet been established.	Support from authoritative diamond suppliers. GIA (Gemological Institute of America). Third-party e-commerce shopping platform.
	Period of Sustainable Growth	Core competencies: proficiency in internet operations, product assurance. Core obstacles: emergence of competing products of the same model. Value: the high-value economic attributes of the product material used and the diamond material itself. Rareness: the scarcity and value retention of the diamond material itself. Imperfect imitability: high-quality materials and high-cost performance. Non-substitutability: online and offline operation model, opened offline experience shops, but has not yet established irreplaceable core resources.	Support from financing institutions (access to financing). Support from authoritative diamond suppliers. Authoritative diamond appraisal institutions (GIA, HRD). Outsourced product processing and production factories. Support from industrial associations.
	Period of Facing Environmental Barriers	Core competencies: internet operations and franchising strategy. Core obstacles: the decline of the online sales dividend. Value: the high-value economic attributes of the product material used and the diamond material itself. Rareness: the scarcity of the diamond material itself and the preservation of value. Imperfect imitability: high-quality materials and high-cost performance. Non-substitutability: online and offline operation modes; opened offline experience shops to increase revenue and brand influence. However, irreplaceable core resources have not yet been established. Support from authoritative diamond suppliers.	Authoritative diamond identification agencies (GIA, HRD). Product outsourcing to processing and production factories. Support from industrial associations. Support from franchises. Other cooperative e-commerce platform support.
	Period of Prosperity	Core competencies: online operation (self-developed customized programs) and an offline experience shop model. Core barriers: product specificity and development of technology. Value: the high-value economic attributes of the product material used and the diamond material itself. Rareness: the scarcity and value retention of the diamond material itself. Imperfect imitability: small self-developed and customized programs (with significant quantities of data to meet the private customization needs of customers) that satisfy new customer needs and experiences. Non-substitutability: online and offline operation model, opening offline experience shops in mainstream cities while increasing revenue and brand influence through franchised shops. It is not irreplaceable and has not yet established irreplaceable core resources.	Support from authoritative diamond suppliers. Authoritative diamond identification agencies (GIA, HRD). Product outsourcing to processing and production factories. Support from industrial associations. Franchise support. International logistics.
Yvmin (Designer Type Jewelry Enterprise)	Period of Start-up	Core competency: original design power. Core obstacle: no mass-production sales. Value: designer status from a scientific class and high level of original design ability. Rareness: unique style. Imperfect imitability: the shape and texture of the product are difficult to imitate. Non-substitutability: continuous innovative research and development and a high level of design ability.	Art gallery. Designer goods collection shops.
	Period of Sustainable Growth	Core competency: original design power. Core impediment: poor operational management skills. Value: designer status from a scientific class and high level of original design ability. Rareness: unique style. Imperfect imitability: the shape and texture of the product are difficult to imitate. Non-substitutability: continuous innovative research and development and high level of design ability.	Designer goods collection shops. Buyer’s shop. E-commerce platforms. Celebrities and internet celebrities. Fashion runways. Fashion media.
	Period of Facing Environmental Barriers	Core competency: original design power. Core obstacle: high cost of product development. Value: the identity of a designer from a scientific class and a high level of original design ability. Rareness: unique style. Imperfect imitability: the shape and texture of the product are difficult to imitate. Non-substitutability: continuous innovative research and development and high level of design ability.	Designer goods collection shops. Buyer’s shop. E-commerce platforms. Celebrities and internet celebrities. Fashion runways. Fashion media.
	Period of Prosperity	Core competency: original design power. Core barriers: long product development time, few styles, high costs, and weak omni-channel expansion. Value: designer status from a scientific class and high level of original design capability. Brand culture. Rareness: unique style. Imperfect imitability: the shape and texture of the products are difficult to imitate. Non-substitutability: continuous innovative research and development and high level of design ability.	Designer goods collection shop. Buyer’s shop. E-commerce platforms. Celebrities, internet celebrities. Dissemination platforms (Xiaohongbook, WeChat, Weibo). Fashion runways. Fashion media.
Caromay (Fast Fashion Jewelry Enterprise)	Period of Start-up	Core competency: huge number of SKUs. Core obstacle: single sales route. Value: all low-priced accessories were purchased in the early stages and had no value. Rareness: all low-priced ornaments were purchased in the early stages; no scarcity. Imperfect imitability: the initial trade practices are not difficult to imitate. Non-substitutability: no irreplaceability.	Sourcing suppliers.
	Period of Sustainable Growth	Core competency: e-commerce operational capabilities. Core obstacles: no special products. Value: all low-priced ornaments were purchased; no value. Rareness: low-priced jewelry and some original design products were purchased; no scarcity. Imperfect imitability: high production capacity and high speed of e-commerce operation. Non-substitutability: no irreplaceability.	Taobao. Sourcing supplier. Manufacturer of outsourced product processing. Logistics.
	Period of Facing Environmental Barriers	Core competency: channel development capabilities. Core obstacle: weak original design power. Value: all low-priced accessories were purchased; no value. Rareness: low-priced accessories and some original design products were purchased; no scarcity. Imperfect imitability: high production capacity (product integration ability), high speed of e-commerce operation ability, and rapid market response ability. Non-substitutability: no irreplaceability.	E-commerce platform. Sourcing suppliers. Product processing manufacturers. Warehousing and logistics.
	Period of Prosperity	Core competency: omni-channel operational capabilities. Core obstacle: poor ‘brandability’. Value: all low-priced jewelry was purchased; no value. Rareness: low-priced jewelry and some original design products were purchased; no scarcity. Imperfect imitability: high production capacity (product integration ability), high speed of e-commerce operation ability, and rapid market response ability. Non-substitutability: no irreplaceability.	E-commerce platform (full coverage). Sourcing suppliers. Product processing manufacturers. Intelligent management equipment system. Warehousing and logistics.

* Data source: Collated from this study.

), all of the companies are growing and evolving with richer resources—especially external resources—which shows that the richer the external resources, the more prosperous and strong the company will be. The core competencies of a company also change as it grows during different stages. Therefore, it is important to take stock of the situation and adopt the appropriate competencies for coping with the different stages of development. Internal resources are enriched and strengthened as a company grows, but the basic internal core resources will not significantly change, and they play the same important role at different stages as they did previously. A resource-based perspective primarily concerns the characteristics and strengths of a company’s resources from a positive point of view, but it is always important to understand and recognize that resources are used to address and solve problems during the development of a company. Therefore, it is necessary to identify what the core obstacles are in order to better use the appropriate resources when addressing them. This study suggests that the resource perspective should include a discussion of core barriers according to the core capabilities.

1.

Traditional enterprises (Chow Tai Fook): Regarding the current trend of new retailing development, this enterprise has strong internal core resources, a mature and powerful supply chain system, a vertical self-built system (including factories and their self-developed intelligent retailing management system), a brand culture, and a reputation spanning nearly 100 years. In response to the current new retailing trend, they have strong production and operation management capabilities, and they are currently proposing a dual “Retail-Force” and “Cloud-Force” power strategy (i.e., relying on their own physical R&D production capacity and intelligent production and operation management capabilities) as their core strategy. This strategy aims to maintain the company’s strengths and develop new consumer demands based on its brand reputation. After the current epidemic and given the new economic dynamics, consumer demand for gold has weakened; secondly, demand in the gold jewelry industry as a whole is escalating and competition is intensifying, with competition for sinking markets (the New Towns Program that was launched in 2022 continues to expand into third- and fourth-tier cities, which contain sinking markets, in mainland China through cooperation with provincial agents and franchises around the country) becoming increasingly intense. Thirdly, online retailing is difficult for high-priced products, as it can only be based on publicity and communication (i.e., as lightweight gold jewelry is more suitable for daily wear and more affordable, such jewelry styles will continue to be launched in the future, and the trend concerning the consumption of lightweight gold jewelry will continue to be highlighted). This is also a challenge for companies that focus on gold product development.

   

Young consumers prefer social and online shopping, and they have a strong online presence, but Chow Tai Fook’s online presence does not currently match its brand influence. The online retailing of gold and precious metal jewelry remains weak, and such sales currently take place in offline shops. This is also a challenge for traditional jewelry retailers. Therefore, these companies should utilize their R&D and manufacturing strengths internally and develop more lightweight jewelry for online sales to meet the aesthetic preferences of young people while ensuring that profits are maintained. Externally, they should actively expand their cooperation with various social media platforms and establish good cooperation mechanisms. Their online presence should expand upon the brand’s vitality and sustained influence, spreading and converting more customers through online traffic. Their online presence should also be used as the key development factor for entity-based enterprises to connect their online and offline stores so as to truly realize the value of media information in the new retailing era.

“One of the most important purposes of new retailing is to meet the needs of consumers and to make interfaces faster and easier to use, as well as more flexible. In general, new retailing methods should first focus on new tools. Second, the new model should be combined with the new concept of C2M. It’s about providing your products and services on demand, regardless of consumption, and more importantly, you need to be able to ultimately combine your production capacity with the ability to deliver quickly to the consumer. This is the most direct point of new retailing from my perspective. So, we have a dual drive to create a new ecosystem for jewelry, with an entrepreneurial mindset and a passion for delivering. See our differentiated brand, which ultimately brings about the sustainable development of the business.” (B1)

“Chow Tai Fook is committed to promoting innovation and craftsmanship. Our differentiated product, a sincere and personalized service, in addition to our digitalized supply chain, enables us to satisfy diverse consumer needs. Chow Tai Fook possesses the foresight to offer the right products to different customers. The CTF HUA Collection combines time-tested gold working techniques and elements from modern life to address many traditional stereotypes about gold products.” (B2)

2.

E-commerce companies (ZBird): E-commerce companies are rooted in the internet revolution. They developed with the Internet, and they are very familiar with online sales. This company is aware of its own strengths, and its spirit of disruptive innovation has enabled them to develop from being a pioneer of the O2O model of jewelry to being one of the most powerful jewelry brands in China. In the early days of the business, ZBird started as a retailer on a third-party shopping platform on the immature internet market while working with the GIA International Diamond Identification System, gaining the trust of customers, and successfully selling its first diamond within three months. At a time when the jewelry e-commerce industry was in its infancy, ZBird took the lead in combining online sales with offline experiences, thus successfully winning consumers’ trust with high-quality products and reasonable prices. It was, therefore, seen as an object to be emulated by newcomers in the O2O jewelry industry. The core competency of e-commerce jewelry companies is their ability to understand internet operations, acquire quality products, and provide product guarantees; crucially, this builds trust among consumers who purchase high-priced gemstone products. With new retailing and new demands, as China’s economy continues to develop and the population’s consumption structure upgrades, the future consumption of diamonds concerns not only the pursuit of large-carat diamonds, but also more artistic and spiritual diamonds. With the post-1990s and post-2000s generations gradually becoming the mainstay of diamond consumption, small diamonds have also become a new favourite. Consumers of such products are more concerned about the design concept, the uniqueness, and the trendiness of the product, rather than just the size of the material. Smaller diamonds can be more diverse and more affordable, and they can be applied to a wider variety of scenarios, unlike in the past, when diamonds were purchased solely for weddings or financial purposes, and the wear rate was low. In the future, diamond products will also be more diversified, and customized services will also gradually increase. On the other hand, diamonds will have greater potential in lower-tier cities, and with the shift in the diamond-consuming population and diamond-purchasing scenarios, future diamond consumption scenarios will also be more diversified. Additionally, more development can be achieved in third- and fourth-tier cities. At the same time, the breakthrough of new diamond materials and technologies, especially with the cultivation of the diamond windfall in recent years, will also be a driving force that changes the diamond field and establishes a new trend.

   

At present, e-commerce jewelry enterprises have gradually constructed a good reputation and credibility with regard to selling high-priced diamonds online. On this basis, they should continue to maximize their internal resource advantages, make good use of the business advantages of the internet, and create a deep ‘sense of technology’ and ‘sense of experience’. This will be the core driver of the online product business. On the one hand, an online customization program can fulfil the exclusive DIY customization desires of young mainstream consumers. In the future, the product line can be extended beyond the modular settings of wedding products (rings), and more ‘playful’ and ‘fun’ products can be developed through technological innovations. In addition, more product consumption scenarios can be created, and the variety of diamond material products, as well as the adoption of new materials and the layout of market use, should be expanded. This will help companies to become industry leaders and exert power as role models from the perspective of the sustainable development of ecological resources. The offline retailing sector should be the focus of the next phase of development for this type of enterprise. The concept of ‘experience-based shops’ is gradually being established in first- and second-tier cities, but there is still a lack of experience-based shops, especially in small- and medium-sized cities. The future of online services will cover most cities, but for the high price of the product itself, ‘realistic’ psychology and maintenance services should accelerate the establishment of offline experience shops with financial support, franchise agency strategies, and regional trust strategies, which should help companies to achieve rapid expansion. Eventually, the full integration of online and offline services will be achieved.

“We have two online platforms that are also related to the development of ZBird. One is traditionally our online sales platform, ZBird’s own official website. Partner platforms include WeChat Mall, which includes the most important, Tmall. In the earliest days, as long as there was an e-commerce platform, we entered one, but now we have cut all of them out. There are so many, I don’t see how much these platforms can contribute to us, so we definitely pile our resources on one of the most important channels.” (A2)

“We have a saying that ZBird is a Whampoa military school that has produced many talents who have gone to many other jewelry companies, and they have developed very well there, but one of their consistent feelings is that they feel that Zbird’s system is too good, and they feel that other brands’ systems are too backward. Because ZBird started out as an internet company, not a traditional jewelry company, we know what to do with the backstage system for new retailing and how to make the social system align better with the current mainstream industry; we have done everything except blockchain.” (A1)

“The most special partners for ZBird are De Beers and the Platinum Association. We have a partner factory in Italy, as well as a partner factory in Japan. I think these are the ones that have a very strategic impact on ZBird. For example, in terms of the De Beers partnership, we received a very good professional endorsement, and we have some very special diamonds that we work on in collaboration with the cutters. For example, over the past two years, we have been studying the application of platinum technologies, such as 3D hard gold, electroformed platinum, and 3D-printed platinum, all of which have improved our products after working with the Platinum Institute. The Platinum Institute has been a significant catalyst for platinum technology and jewelry technology in China. The Italian and Japanese factories have also helped us to improve our craftsmanship. We have some more special products that are still in Italy.” (A2)

3.

Designer jewelry enterprise (Yvmin): China currently has a large number of jewelry enterprises set up by designers who operate independently and who develop and design on their own. They position themselves in a niche, take the lead in terms of an original design style, try to meet the diversified and personalized needs of consumers, and create products with a high value. This element distinguishes them from conventional enterprises, as such companies focus on both design and business. At their current stage of development, such enterprises are more ‘independent’, with individuals controlling the direction of brand development. As they become larger, they will form a more established designer brand; then, there will be a clear distribution of authority and responsibility, as well as a standardized process. There will even be a special group for commercial operations. The direction of the brand’s operation and development will not entirely belong to the individual designer; it will mainly belong to the team. For example, Chanel, Dior, Cartier, and other famous international brands all started as independent design companies.

   

Chinese designers still have a long way to go in terms of brand development. Although they have blossomed in the Chinese market, they still need to continue to expand the influence of their brands, even as the founders’ goals of developing an international presence continue to rely on external resources to achieve this. The company in question has not relied on financial investment or government resources, and it is entirely on its own in terms of gaining the loyalty of consumers. The core competencies of the company concern the designed products, which are difficult to copy, and the excellent design team. However, the top management team of the company should establish a more standardized management system, as the managers mostly have their qualifications from art school; therefore, they should enhance and learn about operational and management skills. If they want to grow their business and become more prosperous, they should respond to the new offline retailing experience with external financial support so that more consumers and fans can substantially feel the culture and values of the brand, which cannot be experienced online or in agency shops. This will also enable them to gain higher-quality and high-end offline customers, which will help them expand the brand’s influence. Indeed, well-known fashion and luxury brands have their own exclusive and sophisticated shops. In addition, they need to participate in more international fashion events and expand into overseas markets so that more international customers can see the brands that represent China’s original designers who have emerged during the years of China’s economic transformation. This also has a very positive significance for the country’s economic development and cultural dissemination. Finally, in terms of products, because of the high development costs, at this stage, the retail prices of products can be enhanced with services. The current retail price is a little cheaper than the price of luxury brands, as brand fame enhances the price. Therefore, there is room for improvement in terms of upgrading the brand. The design of products cannot rely solely on individual members of a team, but time and costs can be reduced by outsourcing designs and collaborating on the development of products. Production costs can be reduced with new technologies and materials, thus compressing the overall development costs. By collaborating and using external resources and technology applications, the company continues to grow, opening up online and offline retailing experiences and moving towards true prosperity.

“Our difficulty is price, it’s too expensive. The factory price of our necklace is about USD 62.50–66.50. In fact, this is already the selling price of many brands. I think this is our particular difficulty to overcome, but if you change to cheap factories, the product is not as good. In addition, the sense of quality is not as good in all aspects. So, we think that, now, we should not pursue profit, but try to make good products.” (C1)

“At SKP, every day, we aim to open offline shops. We want to be in international shopping areas only for that purpose, we have little interest in non-international shopping areas.” (C2)

“Now, there are four factories; two are the main factories, one is a factory for 3D printing, and the other one is our silver factory. Other factories may be responsible for fewer products, but our main one is responsible for about 80% of the products, and the price is very expensive. Many of the materials are imported and sourced from abroad, as our products are complex, and many involve multiple materials. Finally, the silver jewelry is all made in Panyu, Guangzhou. We have been to Thailand before to look for a factory, and the Thai side is particularly good in terms of craftsmanship, but they are just super slow when making the products, and it can take half a year from the time a drawing is given to the time the item comes out. We think it is still not very reliable.” (C1)

4.

Fast fashion jewelry enterprise (Caromay): The main core competency of this type of business is to be able to identify the latest trends when they emerge, launch relevant styles, update them as quickly as possible, offer a large number of SKUs for customers to choose from, and sell them at a lower price. The core criteria of such businesses ensure that their products have first-class style, second-class quality, and third-class price to gain a foothold in the market. The main difference between these products and traditional products is that they are crowd-sourced and cyclical. Fast fashion brands do not rely on their product features to gain customers, but on marketing as a way of development by using online marketing as a platform to achieve their marketing objectives through new digital media technologies. The rapid development of e-commerce platforms such as Tmall and Jingdong has significantly contributed to the sales of fast fashion brands.

   

Chinese fast fashion companies have strong production capabilities, but there is still much room for development in terms of product design, supply chain management, and brand marketing. With the increase in consumer demand, consumers are demanding a better consumer experience, which does not only concern product quality, product price, and pre-sale and after-sale services. With the increase in customer demand, fast fashion enterprises need a better-matching supply chain system and the ability to quickly respond to changing markets. Such enterprises must optimize their supply chain management, improve the efficiency of their supply chain operations, maintain their core competitiveness, adapt to changes in the competitive market, and maximize the rational allocation of resources. The development of technologies such as the Internet and artificial intelligence has facilitated the digital management of enterprises, but at the same time, the difficult and complex digital supply chain operation system has also instigated the implementation of a wide range of management operating systems and procedures. To ensure a well-functioning supply chain, fast fashion companies need to implement a more streamlined supply chain operation process internally, reduce inventory backlogs, and achieve an efficient allocation of supply resources. As their customer bases are variable and not loyal, it is difficult to have a loyal customer base; therefore, they rely on quick responses and marketing strategies to maintain their current development trajectory. To further expand upon brand development and sales, such companies need to upgrade their product designs and overall brand image, rather than simply ‘selling goods’. They should improve their designs and the value of their products, and they should change the current situation concerning the ‘online hypermarket’.

“Our entire supply chain is divided into several types; we have raw materials (for example, some of our crystals are Swarovski zirconia) and many DIY accessories from material suppliers. There are also the finished product assembly and production suppliers (in the traditional sense of production and processing suppliers), and there is also a process concerning certain production process suppliers. Basically, these categories comprise the main product suppliers, and there are some others, including packaging suppliers. Some also provide services. These suppliers add up to almost 120 to 150 people.” (D1)

“There are several capabilities that we expect from our suppliers: the ability to deliver quickly, the ability to control quality, the ability to manage and control, and the ability to match our production capacity for new product development. These are the three most challenging aspects of the factory: capacity, quality, and the ability to produce rich new categories of products.” (D1)

“We are constrained by the fact that the demand for products is changing so quickly across the platform and there are many pressing uncertainties, so the most challenging thing for supply chain partners is still whether they have the requisite capacity to meet demand.” (D1)

“Our warehouse logistics are divided into three parts, which include the management of a warehouse and two third parties. In addition to this, we are involved with a type of cooperation, like JD self-management, and using some specific channels, we are able to cooperate with the platform across the country’s eight warehouses. Many products will be delivered in advance to warehouses across the country so that a more rapid delivery experience can be provided; for example, as in our Jingdong shops, someone can basically purchase today, and by tomorrow, the product must arrive. In some cases, the goods will arrive in the afternoon.” (D2)

The comprehensive findings and discussions show that all four types of enterprise are constantly being enriched, and the number of their resources is growing as part of their innovative evolution process. The growth and development of enterprises cannot be achieved without the use and allocation of resources, and the internal core resources of jewelry enterprises play a major role in promoting growth and change therein; the stronger and richer the external resources are, the more prosperous the enterprises will be.

Proposition 3.

Based on the findings, this study categorizes the growth and evolution of the four types of firms into four types: (1) Continuous Innovations; (2) Technological Innovations; (3) Design Force Innovations; and (4) Time-Sensitive Innovations.

In accordance with the information from the interviews, all four types of enterprises had a strong innovative force, with the industrial revolution driving the continuous innovations of civilization and innovation promoting the iterative upgrading of enterprises. Today, with the rapid development of digitalization, information technology, and intelligence, traditional enterprises (Chow Tai Fook) continue to progress on the basis of their original reputation, and because of their original resource capabilities, they have a strong foundation that is dedicated to technological innovation, design and research processes, and development. They use technology and design innovations to break the limitations of time, space, and materials, and with the power of digitalization, they are able to build an integrated industrial and management system comprising software and hardware, allowing factories, shops, and consumers to become interconnected. Thus, building core competencies in companies enables them to implement new changes concerning cost reduction and efficiency. They are also able to upgrade the whole value chain, implement business innovations, be an enabler of intelligent jewelry manufacturing, and lead the wave of digital manufacturing and globalization 4.0 in the jewelry industry. Design innovations can help companies continuously break through the limitations imposed by materials and designs by catering to the diversified and lightweight design needs of current customers; in other words, they can keep up with the needs of the times, stabilize the industry’s benchmark position, and stay ahead of the curve. Regarding manufacturing, companies need to continue to innovate.

The e-commerce company (ZBird) returned to its original starting point after two decades of e-commerce. It focused on online business, and it has moved what should be an offline customization service online, ensuring that customers do not have to rely on offline shops for diamond ring customization. It offers over 300,000 design combinations through its self-developed system, thus capturing the needs of the younger generation who enjoy DIY and personalized products. Consumers can share 500,000 diamonds online and incorporate their own ideas and preferences into the customization of their diamond rings. Through elemental customization, AI/smart technology, and a globalized supply chain, consumers are free to customize on a large scale with no time differences. Consumer information is also able to be obtained through big data and information flow, thus enabling customer capture across the entire territory. The ability to disrupt innovation is the best strategy for this type of business, and they should focus on timing to reap the dividends of the popularization of the Internet in the PC era. ZBird continues to delve into the hearts of consumers’ needs, blending cutting-edge technologies to keep the brand relevant in the long term. The core driving force behind this company is technological innovation, and the digital drive with regard to technology has also brought unprecedented innovation to the diamond retailing business. Companies have to rely on technological innovation capabilities to continue to prosper and grow.

Designer companies (Yvmin) have gone through the transition from creative design to commercialization, gradually entering the minds of young people who are interested in personalized and quality designs that reflect their own product styles and characteristics. Unlike producers of industrialized mass-produced products, which are designed to meet the diversified and personalized needs of consumers, this company has a strong original design and innovative design power, with high brand-added value and recognition and with creative design at its core. However, as designer brands do not pursue large-scale production, it is difficult to produce a personalized small-batch order and to flexibly manufacture products due to the equipment and processes involved in the production supply chain; this results in high production costs and long production cycles. The designers themselves lack expertise in the supply chain, brand operations, and relevant management knowledge. Moreover, there are high operating costs, single channels, and irregular management issues. The designer business, therefore, still needs to mature. From the perspective of the development stage, designer brands in the Chinese market are in the early stages of development when compared with fully commercialized designer brands, which have not yet formed a clear operational process and business operation logic. When faced with the new retailing omni-channel model, which has enriched the channel dimensions of enterprises, designer brands have also put forward higher requirements in terms of channel management and the ability to control the flow of goods.

Fast fashion companies (Caromay) have gone through a phase from wholesale trading to their own branding. Their growth was due to the geographical and economic environment at the time and was backed by the industrial cluster in the Pearl River Delta and the start of the Internet, which naturally formed a unique competitive advantage. They were also able to collaborate within the supply chain, which created the advantageous feature of rapidly producing up-to-date products, an important aspect of their attractiveness to the market. These companies realized the difference in profitability between selling ‘goods’ and ‘products’, as well as the importance of sustainable development when the e-commerce dividend ran out. In the early days of fast fashion, such companies mainly relied on e-commerce sales to coordinate the supply chain to provide goods; all of the goods were dependent on procurement. As the internet environment at that time was relatively free, profits were also higher, and the ensuing survival pressure let them transform in a manner that enabled them to build and design brands. However, because of the lack of high-level professional design teams and a lack of brand-building capabilities, their branding is still in its primary stages. Although competition in this industry segment has pushed them to improve the design of their products, fast fashion should focus more on how to better meet consumer needs and provide better services and products, as Masao Nakanishi proposed in his research on the optimal ratio of service to price. Indeed, the new retailing era focuses on meeting customer needs, as proposed by the hyper-retailing theory. Based on these two points, fast fashion brands in the new retailing era need to optimize and upgrade the construction of their supply chains. Various parts of the chain use network management and analysis technologies to participate in the gradual use of network platforms and tools in order to manage production. Based on big data analysis, the network platform sales data are derived from customer preferences, and targeting customer demand is an important element of the future production of fast fashion products. The rapid response capabilities of the supply chain are crucial for fast fashion brands, and when facing the next phase of corporate upgrades, more attention should be paid to improving the quality of products and continuing to optimize the supply chain model.

In summary, whether the stages of business development are innovative opening of a new market, sustainable growth, effectively facing environmental barriers, or moving towards true prosperity, it is regarded as different types activities of sustainable growth. As jewelry retail enterprises form corporate strategic innovations with other resources, the capability of omni-channel technology application could provide sustainable growth milestones for jewelry enterprises. In addition, the main forces affecting trade in accordance with the new omnichannel technology is “information and communication technologies”.

6. Conclusions and Suggestions

6.1. Conclusions

China’s jewelry industry is still in the midst of a wave of industrial transformation; it is still a long way behind that of Western countries in terms of corporate branding, and it needs to continue moving forward. The new retailing and O2O operation modes have brought new opportunities to the Chinese jewelry industry, and the further development of information technology, artificial intelligence, and other technologies has also provided new paths for its development. Hence, the jewelry industry should also rely on new scientific developments and technologies in combination with emerging popular experiential and entertaining virtual experiences (e.g., AR try-ons, VR stores, NFT collections, etc.) to stimulate consumption. Through private jewelry customization services, unique jewelry can be created, and C2M can be truly achieved. Jewelry can also be combined with NFTs to create a unique product. Customized jewelry is more secure and exclusive, and it aligns with customer preferences. Jewelry customizations are more flexible and changeable and have more controllable costs. Therefore, private customization services for jewelry can be vigorously developed. Although digital capabilities may be improved, companies must also pay more attention to consumer privacy protection to give consumers a more secure sense of trust when purchasing precious metals.

Each type of enterprise has different channel resources and assets, so they should be clearer about their own attributes and directions, they should set up customized omni-channel strategies in accordance with the advantages of each resource, and they should move in accordance with the needs of consumers. At the same time, they should encourage and support local designers, provide them with space for improvement, and promote the development of Chinese jewelry brands. Chinese jewelry should also keep up with trends and create innovative designs so as to drive the development of the Chinese jewelry industry.

6.2. Theoretical Contributions and Management Implications

This study provides a comprehensive analysis of the Chinese jewelry industry, and it summarizes and outlines the impact of the omnichannel model on the jewelry industry in the new retail era. Furthermore, it defines and summarizes the value orientation, omnic-hannel technology adoption, and core resources of the innovation and evolutionary processes of four types of jewelry companies in the Chinese jewelry industry by using the wheel of retailing theory and resource-based perspectives. This study details the operational priorities, system changes, and content used in new technologies that are required in the next stage of the development of jewelry companies; such technologies help form an innovative environment. It explores new directions for the jewelry industry to help them grapple with change, and it provides new ideas for the development of the jewelry industry in the new retailing era. It focuses on the practical value of management practices, and it notes feasible development strategies for helping the industry reform and move forward. It complements and enriches the theoretical literature on the jewelry industry, especially regarding the direction of O2O research on jewelry companies in recent years. It adds to the lack of research on omni-tech in omni-channel management from the perspective of the jewelry industry, and it integrates and analyzes the internal and external resources that need to be adopted by jewelry companies during their development stages. The study has certain limitations from the perspective of the jewelry industry, and it is applicable to the fashion and luxury goods industries as well; however, it may not be applicable to all industries.

6.3. Future Research Direction

At present, the new retailing model has become a mainstream development trend, and it is also the main way that China’s jewelry industry can reform and overcome the current predicament. The research scope is focused on the economic context, and it is worth distinguishing the impact of different functions, e.g., sales, marketing, and distribution channels, in the future research. As for research limitations, the profitability of launching a new omnichannel strategy and the timeframe for implementation has not been elaborated on. Furthermore, future research will clarify the direction of development for the enterprises, as well as the relationship and order among the enterprise, consumer, and retail platform. This research can be expanded upon by exploring the value of experience in the O2O consumer context with regard to jewelry companies from the consumer’s perspective. Moreover, such research may focus on how to provide a better experience for consumers in the new consumer-centric era.