The London Diamond & Emerald Exchange
The London Diamond & Emearld Exchange (LDE) is a hybrid online marketplace for precious stones and bespoke jewellery with a personal touch. Investitin.com has interviewed the Director and Founder, Phil Spencer, on the services London DE offers and their crowdfunding campaign on Seedrs.
For decades precious gems have been of great interest to the general public, mainly because the association between key life events such as engagements, weddings or anniversaries and the custom of buying a diamond or coloured gem to capture such a memorable moment is a brilliant gift from mother earth.
What is LondonDE and what sets it apart from the competition?
We are the UK’s leading supplier of bespoke engagement rings, wedding rings and jewellery, as well as loose emeralds, diamonds and other coloured gemstones. Our Website is: https://www.londonde.com/.
The traditional high street jeweller must maintain a very expensive inventory of stock, retail premises, staff and overheads. We are streamlined – we have no retail premises, we hold no stock, we have a small, tightly-knit team and low overheads. Consequently, we can deliver high quality, hand mande jewellery pieces and loose precious stones at a fraction of the price of many of our competitors.
We achieve this by way of a hybrid e-commerce business model, offering ‘click-and-buy’ functionality combined with the personal touch of central London office and sales consultants to meet customers face to face. This is what were term to be a ‘clicks-and-bricks’ approach.
We leverage the inventories of our suppliers, who are at the top of the gem supply chains, delivering a vast selection of stones to order. We have a European exclusivity agreement with one of the leading emerald suppliers in Colombia (the source of the world’s finest emeralds) and we enjoy a close relationship with one of the direct suppliers to Europe of Sri Lankan rubies and sapphires. This is in addition to our API feed, which affords us access to over 100,000 GIA certified diamonds worldwide.
Keen to never rest on our laurels, we are in talks regarding the future supply of Paraiba tourmaline from Brazil and spinel from Myanmar (Burma).
In order to set these stones into fine jewellery, we employ our trade-only workshop, in the heart of Hatton Garden, to produce handmade, bespoke creations to order within 1-2 weeks.
You can become a shareholder of LDE by participating in the Seeders crowdfunding campaign.
What are the demand and supply dynamics of precious stones?
Diamonds have a long and chequered history of price and supply side manipulation, largely from very large players such as De Beers. The market is, however, becoming ever more dynamic and competition has increased.
The biggest increases in demand have been experienced in the coloured gem market, most notably with emeralds. The Asian market is the fastest growing geographical market. In particular we are seeing a consistent rise in demand from the Far East and the Middle East.
There is no formal recognition of what constitutes a precious, or indeed a semi-precious, gemstone. Diamonds, emeralds, rubies and sapphires are widely recognised as being precious gems but a number of other stones, including Paraiba tourmalines, are now fetching upwards of $20,000 US/carat and are worth more than many ‘traditional’ precious gems.
We are currently involved in a joint venture in Colombia to deliver emeralds directly from ‘mine-to-market’ in the near future, and we have already established a sister trading company to facilitate this.
What is the primary use of jewellery investment or beauty?
Cutting out the middlemen as well as leveraging the inventories of other, trusted, suppliers are the key to gaining value added in this industry. On average the precious gem purchased in the high street has changed hands between 20-30 times prior to being purchased by the end consumer – we reduce this to 2-3 points of contact!
I don’t think jewellery can ever be considered a purely financial investment, unless one is purchasing it with a view to retaining it as a ‘treasure’ asset to be kept locked in a vault for 5, 10 or 15+ years for example. Most jewellery purchases are emotional and the link between the rational and the emotional cognitive processes involved in these transactions cannot be underestimated or undervalued. As such, people buy people, so the industry is unlikely to ever be entirely dominated by a purely ‘click-and-buy’ e-commerce sector and the human link in the chain will remain vital.
Certification is the key to transparency in the industry, as it provides laboratory evidence as to a stone’s provenance as well as its physical properties and characteristics. We only supply natural stones and any enhancement is clearly stated at and before the point of sale.
Further information on this and other issues can be found on our blog: https://www.londonde.com/blog/
Where do you see LDE in the next five years?
Having grown organically for three years, the time is right to seek further investment in order to take the business to the next level. This will enable us to hire new staff and ramp up a thoroughly planned and costed, multi-faceted marketing campaign. In May this year Zara will join our team, as a fully qualified gemmologist, to become our Creative Director. We are also maximising the outreach through our digital channels with a tightly controlled Google Adwords PPC (Pay Per Click) campaign.
Allied to this we are promoting our business pages on social media and boosting some of our key posts. We are building a Google Shopping campaign and we are also working on affiliate marketing and banner advertising. Later in the year we will launch our first Sky AdSmart TV advertising campaign, with our web and digital development partners. This will be filmed, edited and finalised in the Autumn so that it is ready to be aired on Sky in November and December, in order to capitalise on the festive sales period leading up to Christmas. Sky AdSmart has opened up the medium of television advertising to small and medium-sized enterprises for the first time. The functionality of this method enables specific targeting of audiences based upon detailed analysis of their purchasing power, demographics, geographical location and interests.
We are pleased to offer the following rewards to our investors:
- Those who invest under £100 will receive a 5% discount on any of our products or services;
- Those who invest over £100 will receive a 10% discount on any of our products or services;
- Those who invest over £500 will receive a 20% discount on any of our products or services;
- Those who invest over £1,000 will receive a 30% discount on any of our products or services;
- We will also offer a 10% discount on our products and services to anyone who refers us.
12 month vision
Within 12 months LDE will expand the business to 6 full time staff, including the MD. The target for 2017 (financial year end 31st December) is to turn over in excess of £300K. The company is looking for partnerships and funding to help drive the business forward over the coming months.
LDE aim to focus a large amount of capital and resources on brand building and sales generation, via digital marketing channels (including Google AdWords PPC and Google Shopping), social media, television advertising with Sky Adwords and Search Engine Optimisation (SEO). To achieve these objectives, and expand the team, LDE will require a move to larger office premises in central London.
LDE will expand the product range to encompass all four precious gems (diamonds, emeralds, sapphires & rubies). In 2017 the company aims to have a stand at the HKTDC jewellery show in September, as well as Baselworld in early 2018.
3 year vision
Within 3 years LDE will establish its first overseas footprint in the Dubai Free Zone. Phil Spencer has personal experience, connections and clients in the United Arab Emirates and this is one of the fastest growing geographical markets for luxury jewellery and gemstones. By this stage LDE forecast a 7-8 figure turnover, with profits of 6-7 figures.
The company aims to grow the London based team to 10-12, including 8-10 sales consultants and 2-4 administrators and in-house web developers. Phil Spencer aims to complete EMBA at Said Business School, University of Oxford, in addition to a Gübelin gemmology course. The company will also develop multilingual sales consultants, administrators, websites and marketing material in order to open up the world-wide market for their products and services.
Five year vision
Within 5 years LDE aim to have global time zone coverage, with sales offices in London, New York, Dubai and Hong Kong. By this stage they will have built an instantly recognisable global brand in the luxury industry. The key global luxury markets are Europe, North America, the Middle East and Asia-Pacific, so it makes sense to have a physical presence in the key hubs of these regions.
It is anticipated that spin-off opportunities may arise from this, enabling LDE to further diversify its portfolio of products and services to maximise its profitability and reach. Continuous television and digital marketing campaigns will promote the brand via every available medium.