David S.K. Lee is man who wears many hats. He is multifaceted businessman with financial interests primarily in real estate (investments, brokerage and property management) and most notably, as one of the largest watch dealers in the world, one that caters almost exclusively to the Chinese market with a clientele that includes Chinese tourists visiting Los Angeles, as well as Chinese diaspora and Chinese-Americans who reside in Southern California.
Lee is also a world-famous connoisseur of many beautiful things, but actively collects Rolls-Royce Motorcars (he has a contemporary Phantom and Dawn), Ferrari sports cars (his collection includes an Enzo, and LaFerrari F40 and F50), vintage Old World wines (primarily Burgundies, but some Italians too) and of course, fine Swiss timepieces. He also has a fondness for caviar, sushi and seafood. His proclivities and panache are front and center on his Instagram feed, which currently boasts 301,000 followers, decidedly making him a true social media influencer that clearly enjoys the ‘good life’.
Yet, for all his trappings of success, while Lee is indeed remarkably effusive, he is also extraordinarily humble, a family man, often speaking on his revered late-father who left Mainland China for Hong Kong, and then departed Hong Kong for the U.S. after being conscripted by the Smithsonian Institute to restore its jade antiquities collection. Eventually, Lee senior, his wife, Chui Ling Fung, and young master David left Washington D.C. for the Greater Los Angeles area of California, settling neatly on a Pacific Rim perch, where Hing Wa Lee Gallery, a gemstone and Asian art showroom in downtown Los Angeles, opened in the early 1980s.
While traditionally Chinese in many respects, Lee is also very American. More than that, he is very Californian, having attended University of Southern California, where today he sits on the board of the Marshall School of Business. Upon graduating from USC in 1992, Lee joined the family business and quickly led the transformation of Hing Wa Lee Gallery from wholesaler to the luxury retailer it is today.
Lee spoke to Jing Daily columnist Aaron Sigmond via phone to discuss what it is like to see China from both sides, as an American, and as Chinese.
How important is the Chinese tourist trade to your business, as distinct from the Chinese diaspora and Chinese-Americans?
We changed the business model from a wholesale operation to retail when we opened our first store in 1993, and at that time Taiwanese Chinese were our major consumers. Really, we were a niche for Asian’s in the U.S. The San Gabriel Valley [where my store is located] is [de factor] the modern Chinatown of Los Angeles [ED NOTE: Per the 2012 Census, the Greater Los Angeles area is the third largest concentration of Chinese in the U.S.]
As years passed, certain markets have become more mature in buying and taste. As that was happening with our Taiwanese Chinese clients, we saw an influx of mainland Chinese, who have become very important to our business. All businesses are cyclical in nature, and two years ago, we saw some adjustment with the start of the Chinese government anti-corruption policy. With that, things slowed down. But now, we’ve seen in the last year that a lot of the mainland Chinese nationals have become “local” customers. They come back and buy a house, and we see more local regular customers living among us and consuming.
What portion of your current sales come from China-based luxury tourists, Chinese expats and Chinese-Americans?
Right now, now, mainland Chinese tourists represent about 20 percent; mainland Chinese expats, or diaspora as you say, is about 50 percent; the remainder are split between Taiwanese, 20 percent; and 10 percent are second-generation Chinese-Americans.
How concerned are you about a possible U.S. trade war with China affecting the numbers of Chinese visiting America?
Of course, I am concerned as the U.S. is a huge consumer of Chinese products. If there is an effort to buy less from China, production and revenue for Chinese companies will suffer—and as a result, their spending and consumption will be affected.
Swiss-watch exports to mainland China and Hong Kong have been soft and are anticipated to remain so throughout the next “Five-Year Plan.” Has this had an impact on your sales in any way?
As I said, when the Chinese government anti-corruption policy was enacted, we saw a slow down.
During China’s Golden Week travel period, many Chinese opt to go overseas, where luxury shopping is a major activity for them. How does this affect your business? Are you considered a travel destination?
Yes, our store is definitely luxury destination. A lot of people in China—Hong Kong, mainland and Taiwan—know about our store. It is the biggest jewelry and watch store [of its kind] in North America. In terms of the lunar year—when China shuts down for about two weeks—people do tend to travel abroad and shop. And when they travel, they want to buy something to remember their trip by, but also in our culture, we must bring back gifts to loved ones and family members. Family knows if you are traveling, and they want you to buy something for them. This is good for us, and if they choose to come to Los Angeles which they often do, we do get a little bit of a peak during this time.
What are your thoughts on Chinese New Year (Sheng Xiao / Chinese Zodiac) limited-edition watch releases? And does Hing Wa Lee have Year of the Rooster watches right now?
There are [Lunar New Year Chinese Zodiac] models that we carry and we have clients who are very into them, so we will sell some, but it’s not a big volume of our total watch sales.
Do you personally like the annual Chinese Zodiac limited edition watches? Does it ever ring true to you, or is it just a marketing ploy?
From the Chinese perspective, they look at it as more of an honor that a European company, that manufactures watches to sell all over the world, would take a special interest to make something specific for the Chinese market. That the Swiss would see that the [Chinese] market is important enough [to warrant these annual releases], they don’t see it as a negative, only positive.
You’re prolific on social media, with more than 300,000 followers on Instagram alone. Such mobile media outlets are an enormous part of Chinese brands’ sales strategy—as is e-commerce—particularly to attract millennials. What can U.S.-based businesses that cater to Chinese luxury tourists learn from such tactics?
I believe social media is very important. It is a key way to communicate. The Chinese use WeChat, and that is something we need to be actively involved in since we deal heavily in that market. It is not the same as Instagram—it’s more like Facebook, but we are on it and need to keep an eye on it.
How has the rise of social media affected your business overall? Do you see any drawbacks to its omnipresence and consumer importance?
Honestly, I think that when people see that I am successful they are more interested in the reason, “why.” Yes, I am in the top selling volume of the brands that I carry, however, point in fact, I have multiple businesses. There is the retail, the real estate and the investments. I run many different companies. If they are curious to know about me, I am not a typical jeweler, so Instagram works for me.