Catching Up

The Diamond Industry Is F*cked Up—Fixing It Got These Two Bros RM3.5 Mil In 2 Years

  • Two years in, Zcova has expanded beyond just selling diamonds online; now they customise and design jewellery.
  • They have a new website with all their diamonds listed that includes: actual diamond pictures with a link to the GIA certificates, a large variety of engagement ring designs, as well as wedding bands.
  • They’ve sold thousands of diamonds and successfully proven that Malaysians will buy diamonds online, but they still feel the industry itself has a long way to go.

Since Zcova launched just two years ago, the local landscape for consumer diamond purchasing has shifted.

Brothers Ziwei and Ziyin set out to bring innovation and change to a mammoth industry tightly grasped by retailers.

Having sold thousands of diamonds—most of them through online transactions—it’s clear that they’ve managed to convince customers that you can buy something as expensive as a diamond without having seen and touched the product first.

“Zcova then was very concentrated on just being a diamond company that sells only diamonds, and our website was very basic,” Ziwei said, recalling how it was when they first started out.

Fast forward to today, they’ve made RM3.5 million in revenue; regularly customised and designed their own lines of jewellery; and updated their website to be polished and more importantly, trust-instilling. On top of that, they are poised on the brink of expansion to Singapore and Australia.

But they’re nowhere ready to stop.

Zcova’s journey started because of a bad experience Ziwei had when purchasing an engagement ring. Pressured by a commission-hungry salesperson, he ended up spending over RM4,000 above his set budget.

Ziwei still feels very strongly that this misrepresentation of the diamond and jewellery industry has not gotten any better.

The industry’s business model is wrong. Even if the retailers wanted to be honest, they can’t,” said Ziwei, in a recent interview we had with him.

He brought up heart-shaped diamonds as an example of the deep issues the industry faces.

A screenshot of the diamond shapes you can select on the Zcova website.

“In retail, ‘special’ shapes will be at least 10% or 20% premium. The reason is not because they’re cheating. They bring this stock in small quantities which creates more demand, so there’s a premium price.”

For Zcova however, the brothers said, “When customers say they want heart diamonds and give us a budget and ask if it’s more expensive, we say no, it’s cheaper. It’s supposed to be cheaper, so we’re following the actual market.”

Another example would be the different prices set for different types of gold, like rose gold, white gold, or yellow gold.

“If you go to retail stores, if you use rose gold or yellow gold, it’ll be a different price. But for us in the industry, we know that no matter the gold, it’s the same price.”

Ziwei clarified that information like this isn’t widely known, which leads back to the lack of transparency that the industry suffers from. And this is also the reason why the prices of jewellery on Zcova don’t change based on the type of gold the user picks.

Zcova also doesn’t charge for how “intricate” a design is, unless it really does take them extra time and effort to produce. Instead, customers are charged based on a simple formula (Gold Weight + Production Fee).

This inherent industry wrongness is one of the things that the brothers have been working to change these past 2 years.

“We built our company based on problems we faced as customers.”

Image Credit: Zcova

Seeing an average of RM350,000 worth of sales monthly, they appear to be on the right track.

They’ve come a long way from when they had to struggle with bringing in only one to two customers a month.

“It was very very difficult for us,” said Ziwei. “No one would believe that customers would transact RM20,000 without looking at the product.”

However, now they even see purchases that go around RM40,000 per transaction.

They’ve also opened up a showroom, which potential customers can visit if they wish.

Image Credit: Zcova

Their new website, launched in September 2017, is also part of their efforts in gaining customer trust.

At its core, Zcova sees itself as a company that educates customers, besides being a jewellery company with a vast array of jewellery designs.

And that’s why they don’t work on a commission basis, unlike most retailers.

“Our stock is all with the supplier so we don’t have pressure to sell. The website that we created is purely to educate customers.”

Ziwei explaining some of the educational aspects of the website.

They brought up an issue many first-time diamond buyers face.

“People wonder how do they know if the diamond is shiny. The diamond’s shininess is a mathematical calculation. You can never see with your naked eyes when the diamond is an excellent grade,” said Ziwei.

Ziyin explained further, “The retailers will show you diamonds all under enhanced lighting, so the brilliance of the diamonds is there. It looks nice and shiny, but you don’t know where the inclusion lies, or is it visible with a naked eyes.”

“Even they show you under the microscope, without knowing what to look for, you wouldn’t know.”

That’s why their website displays actual photos of the diamonds (the first company to do this in Malaysia), taken under controlled lighting on a specialised photography machine for diamonds

You can clearly see the diamonds and more importantly, compare their cuts (which are a major contributor to a diamond’s real value). If you wish to know the tips and tricks on spotting an excellent hearts and arrows through pictures provided by Zcova in their website, click here.

You can see diamonds of a similar shape and carat, but with completely different hearts and arrows quality.

“This is the only website in Malaysia that’s able to do this. We take the shape and choose the clarity. This is where we differ. We’re the only company that’s able to show you the exact diamond that you’re looking for.”

But if you assume that the design, details, actual photos, and easy navigability on the website is all that Zcova has going for them, you’ll be missing out on another vital element of their business.

Customer trust is a top priority for Zcova, and this is applied across the board, whether on their website or in their showroom, to the point where the diamond reaches the customer and even after.

Ziwei pointed out that engagement rings don’t actually need to be the best quality diamonds. After all, engagement rings usually don’t get sold off again. Since friends and relatives typically only ask about the size of the diamond, bringing down the colour and clarity gets a bigger diamond and a cheaper price.

“I don’t need to upsell to you. I don’t need you to buy the most expensive. I need you to buy at a price range that you are comfortable with.”

Image Credit: Zcova

Zcova prides itself on its customer service and customer reassurance, built into the entire experience of purchasing their products.

“Anything you see here is the actual price that we charge. We want to bring customers very close to the retail experience and yet get the benefits of being online.”

They also don’t want customers to feel detached from human contact, so they have a “Consult Us” tab that follows users from tab to tab on the site.

The treasure of the online experience is that customers don’t feel the pressure of choosing the diamond in front of the retail person.

“You can choose and compare the price at a comfortable stage,” said Ziwei.

But this doesn’t mean that your experience of Zcova feels isolated.

“Even when delivering our product, we have the 3-point check, something that’s very exclusive to Zcova. When you log into our system and buy something, there’s a part where we’ll update everything you’d want to know about the diamond, delivery, status of your ring and everything else.”

“We want to eliminate that anxiety or reduce it. With this, you’ll receive a pic and video of the laser inscription on the diamond. We also keep our customers updated by informing them every progress of their order—when the diamond has reached, when was it sent to production, when it arrived at our showroom, or when it’s packed for delivery.”

They saw exponential growth in the past 2 years, evolving into a jewellery design company too.

They had two major spikes that drove the growth of the company. The first was when they started seeing more media coverage (including an early one from Vulcan Post).

“The writeup helped with a big change in perception; the acceptance rate was higher,” said Ziwei.

The second spike came when Zcova expanded into customising and designing jewellery, at the start of 2017.

Some of Zcova’s custom-designed jewellery for clients like AirAsia.

According to the brothers, this was a very natural progression from what they were already doing. Similar to why they started the business in the first place, it was all for the customers.

“A lot of people asked, why don’t we start to sell jewellery too? Because after they buy the diamonds, they needed to go somewhere else to make the jewellery.”

Ziwei explained that they had always wanted to do so, but couldn’t find the right partners.

Ziyin continued, “After a few recommendations, we were introduced to a production house that was a master jeweller for a well-known brand from Hong Kong in the 90s. With their quality products and immaculate precision, we had found their perfect production partner.”

Zcova saw the opportunity and brought them on board.

Ziyin demonstrating the microscope-camera they use to look at the diamonds in their showroom.

Thanks to that, the brothers can now proudly say, “Zcova is a full-fledged diamond and jewellery company that also does customisable jewellery and sells diamonds at different rates.”

They’ve had a pretty good run these past two years, but the brothers are not easily satisfied.

“I’m not even near to my actual expectation for the company.”
– Ziwei.

He estimates himself at having only done 1% of what he set out to accomplish.

With the plan launch of a demi-fine jewellery collection and a special men’s line on top of their planned expansion, it seems that Zcova will have a lot of its plate this 2018.

“I want people to see diamonds as commodities, and the name of Zcova to be synonymous with a proud Malaysian company that bring back value to the customer.”

They estimate that they’re at a less than 5% penetration rate for the market; so if their current numbers are anything to go by, they have a massive potential for further growth.

  • You can find out more about Zcova on their website or book an appointment at their showroom in Kota Damansara at consultant@zcova.com.

This article was written in collaboration with Zcova.

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