L’Azurde has expanded to become the largest gold and jewelry manufacturer in the Middle East and North Africa region

Interview with Selim Chidiac, CEO of L’Azurde

First of all, has doing business in Saudi Arabia got any easier compared to the past, considering all the new laws and developments?
 
L’Azurde has been operating quite successfully in Saudi Arabia for 35 years now. We have learned how to adjust and adapt our operations to the ongoing developments and evolutions in the Saudi Arabian environment. Today, this environment is more open to foreign investors. As you know, in the summer of 2015 the stock market has opened for foreign investors. So, it has become easier for those investors to visit the country and start new businesses. We feel very comfortable with the operations we are currently running and we see new foreign investors come every day.

What is the outlook for a Jewelry sector and luxury retail in Saudi Arabia?

Overall, we are very optimistic about the future of jewelry in Saudi Arabia. To start with, the retail sector has significantly evolved over the last couple of years with a lot of new modern retail centers like the new shopping malls and state malls coming across the country. If you look at the plans for the next five years, there are so many new malls coming up and this will significantly uplift the shopping experience for consumers and the overall retail industry. On top of that, if you look at the Saudi population, 50% are below 25 years old. This means that many of them will get married. The main purchase occasion for jewelry is wedding occasion. This indicates a significant development for the industry. The other thing is that the individual’s income is attractive which creates many opportunities for the retail industry.

Saudi Arabia is allegedly the number one market for luxury purchase. So, is it the same for jewelry market?

Saudi Arabia has one of the highest per capita consumption of gold jewelry worldwide. This is why there is a focus on this market. We have consistently invested to raise the L’Azurde market share in Saudi Arabia

How is Saudi customer different from other customers in the Gulf when it comes to jewelry consumption?

The Saudi consumer is very demanding. There are so many brands available here and a variety of choices. A company has to continually raise its game plan and to innovate to win the heart and the mind of the Saudi consumer lady in our case. We have launched a lot of innovations. We launch more than four thousand new different designs every year to continually surprise and attract the Saudi lady. Whenever a Saudi woman walks into the shop, her first question is “what are the new jewelries, designs, and the latest trends?”  That is why we have significant investment in R&D, design developments and technology to continually surprise and win the consumers. 

What kind of designs do you offer to the market and how innovative are you?

We offer a wide range of designs, we collaborate with many designers around the world, plus we have our own internal designers. We have third party designers in New York, Beirut, Istanbul and London. Those help us launch new collections. There are macro trends in the gold and jewelry industry where Saudi consumers are more open and they are influenced by the new trends in the west. Still, the trends for diamond and gold jewelry in the region is different from that in the west because women are looking after large and show off pieces for the major occasions. Social life is much more developed here than it is in the west.

We keep hearing about 200,000 young Saudis studying everywhere in the world and everybody is looking towards this young generation to transform the country. Do you think new trends will emerge with those who were exposed to new cultures?
 
The young talent in Saudi Arabia is evolving rapidly. There are hundreds of thousands who were educated abroad. We start seeing a different way of thinking, demand for fashion and different habits of consumption, but of course this is a gradual change which will take time to impact the whole society. You may see today a kind of difference between people who spent their whole live here and those who have lived abroad for a couple of years. So overall, it is very positive for the country, but will take some time to fully impact many more people. We as jewelers, have to launch new different collection for those who have been influenced by the west and another for those who are more conservative and spent most of their time in the country.

Since its inception in 1980, L’Azurde has managed to drive a business toward innovation and became the fourth largest gold and diamond jewelry manufacturer in the world. Can you present us with a brief history of the company and its wonderful story?

L’Azurde started in Saudi Arabia 35 years ago. We have expanded to become the largest gold and jewelry manufacturer in the Middle East and North Africa region. We are the fourth largest in the world. This has happened thanks to continuous investments in technology, innovation, and manufacturing. Today, we invest in talented people and machines. We have more than 2,500 craftsmen and more than 600 different kinds of machines developing jewelry.

We have more than 2,500 craftsmen and more than 600 different kinds of machines developing jewelry.

In industry, we have ongoing partnerships with many experts, consultants, and suppliers around the world to continuously raise the bar and innovate and surprise the consumer with new products. Our main business consists of selling gold and jewelry to three thousand retailers in the region. Mainly 21 and 18 carats. We also started our own retail operation three years ago with L’Azurde mono-branded retail shops. We currently have 15 retail shops. Our goal is to reach more than 50 retail shops across the region within a couple of years.

Can you talk a little bit about the innovation in jewelry? What does innovation entail and how can you be innovative in such an old industry?

It is a very old and well-established industry. However, in the gold industry, you can change your line and innovate a lot with technology investment. These are like the 3D printing, which is impacting many industries around the world. Many of our gold products are coming directly out of the machines of the 3D printing. We have the laser cap technology and others. Technology helps launch different designs that cannot be copied which stand out and surprise others. That is why we continually invest in new machinery and new ways of making gold 18 or 21 carats technology to launch new fashion lines. Every month we have to launch three to four hundred new designs by leveraging different technologies. So, it is true that the focus is on technology, but it is also on how to make use of it. Technology is very helpful because when gold prices raised a few years ago, many companies were challenged on how to put jewelry at the right price. Thanks to our technology, we could put Jewells on a similar set of necklace at a much low weight because of the technology we have in the company.

Can you talk about the founding idea of the company and its rationale or logic?

The founder of the company had attraction for jewelry thirty fife years ago. He wanted to start by launching a collection. He didn’t really envision to reach the scale of the company we have today. At that time it was completely new and very innovative and because the industry was not so developed in this part of the world he had to do everything in the house. This is why when we had experts coming to visit the factory, they told us that we had of technology under one roof at L’Azurde,  what can only be found in fifteen to twenty different factories in Italy. The idea was to launch brand and jewelry line. The initial success then motivated the founder to invest more and develop the company further.

You have won all the awards for the international quality in gold jewelry. Can you comment on your international recognition?

Today L’Azurde is available and sold in more than 20 countries around the world. We participate every year in many competitions around the world and this is a great reward and motivation for our own designers and the freelance designers with whom we collaborate. We launched last year two specific collections in the US market. We participated for the first time in Las Vegas and Miami jewelry shows. We collaborated with Sandrine de Lagge who is based in New York and she has worked with many international companies and were very satisfied with the positive response which we got for our new collections for the US market. Today we have a very strong hold in Saudi Arabia and the gulf region and we are starting step by step to export the brands to other parts of the world.

What are the main challenges to your industry? Is it the price of the gold or the developments in the region?

What is interesting in the region is that it is never boring. There are always ongoing challenges and changes. You have always to adapt continuously to the geopolitical situations. Internally the biggest challenge is to find the right talent. We have many opportunities to go further. We have to find the right people: how to attract, retain, and develop them in the company. On the other hand, giving all the innovation which we have, we somehow reinvent the product line consistently. We have to invest a lot into continuously launching new designs and new technologies.
What makes you different from other jewelry manufacturers around the world? How unique are you?

I would say there are few pillars. First is the innovative design. We invest significantly in R& D as I mentioned earlier and the high number of designs we do. Second is the craftsmanship. We have more than 2500 workers. An average craftsman has more than fifteen years of experience and they contribute in making a beautiful piece of jewelry. Thirdly is the brand. We are one of the top three spenders in the watch and jewelry industry in the Middle East region in terms of TV, print, online and social media. Fourthly is our people. We have a great deal of people who are creative and not afraid to fail. There is a cross-functional collaboration and the environment in the company is a great competitive advantage for us.

What about your market positioning? Would you position L’Azurde as a super luxury or more to the middle class? And what is the future of the brand?

L’Azurde is a premium jewelry brand that is targeting the middle class. It is an affordable one. We are not a super luxury and we are not planning to be so. However, the image of the brand is well above the target audience. We are investing a lot to raise our brand image and expand the consumer base. Our investment in advertising, in online marketing, with celebrities like Elissa, the famous singer, and Alanoud Badr, better known as lady Fozaza and her brand Fashionista, a well-known designer and few other celebrities as well.

Would you consider launching another brand that would go after the super luxury segment? And what is your brand strategy for the future?

We have a lot to do with L’Azurde and we have many opportunities. L’Azurde is still a relatively young brand and there are many opportunities to develop it further. Our focus today is mainly on our current brand.  There might be something for the future, but nothing specific.

Because you are competing globally, what in your opinion are the key elements of competitiveness in the world economy?

The world is flat. So, today there is much more competition, which can surprise you at any point in time in your market. You are much more exposed. There are competitors coming from all parts of the world. So, any company has to raise its game plan and you cannot count only on your lovers. You have to invest in innovation and your brand and to stand out. You also have to invest to attract the best people. The world has become much more competitive and this is in the best interest of consumers. Consumers have today a great variety of choices. So, let the best win. What are continuously wondering what can be done better tomorrow. We are never complacent or satisfied with what is happening.  We always believe that there can be better designs and better products. This culture of continuous innovation, raising your bar, and charging your people is what helps you stay ahead of the game. You should never think that you are number one because once you think so, it will be the end for you. You have to always think that you are number two in order to remain number one in the future.

What are the advantages of being in Saudi Arabia?

Saudi Arabia has the biggest economy in the region. Obviously, being here gives us a big advantage to attract and win this major market. It gives you a base out of which you can expand to other neighbouring countries. So, we are very satisfied of our presence here. The market is now opening up much more and has become much easier to do business than it was twenty years ago. We think the base of Saudi Arabia is a major competitive advantage for us.

What is your estimate of the growth in luxury and jewellery segment in Saudi Arabia? Is it going to grow with the population over 60%? And what are your business plans?

We have a very stretched and challenging business plans, double-digit growth, which we are planning. The industry and the market will not go at this rate considering the current economic situation, so we are expecting and planning to gain market share. Our market share is roughly 25% in Saudi Arabia and about 20% in the region.  We have won and gained share in the last couple of years consistently. We continue to do our utmost in gaining share in the future.

What would be the key component to gaining market share? Will it be focusing on innovation, branding?

I think number one is innovation, especially in our industry where the product changes consistently and on a regular basis. Number two is the brand and the trust which the Saudi customer has in your product. The third point would be the customer’s relationship with our retail network. The relationship with our customer is our major competitive advantage.