The growth in global demand for diamonds, gemstones and jewellery, mostly fueled by Asia, China and India in particular, has been witnessed at the major trade fairs this year. The diamond industry is, gradually, recovering from the price slump in 2008 and 2009 in the course of the global financial crisis; prices have rebounded in recent years. Prices for both rough and polished diamonds had nosedived by double-digit percentage. Even the growth of demand in China and India continued at a subdued pace. The price recovery was also evident at the fairs with exhibitors reporting strong sales.
In addition to setting a buyer attendance record at the Hong Kong International Jewellery Show in March 2014, the number of buyers from Asia, such as mainland China, India, Taiwan and Thailand, also recorded a double-digit percentage growth, said organiser, the Hong Kong Trade Development Council (HKTDC).
Exhibitors at JA Jewelry Summer Show held in July told Hong Kong Jewellery their market observations.
Thai Gems Export Ltd is specialised in precious gemstones and diamonds. Pravin Mogha, owner of the Bangkok-based firm, discerned some vicissitudes in the attitude of his international customers. While agreeing that there was, clearly, a shift in demand to Asia, driven by India and China, he said in an interview with Hong Kong Jewellery at the New York show that while consumers were spending more, they also engaged in haggling over prices.
“I have also observed that Hong Kong’s market is still strong, thanks to the demand from China. The Hong Kong (International Jewellery) show attracts international business. Also conspicuous at the Hong Kong show was the fact that India continues to be a bullish market…It has, historically, been a good market generating strong demand, and will continue to do so because of the cultural and social emphasis on gold and jewellery which are not just primarily a fashion statement but also an investment in the future. However, we see a partial saturation in China’s jewellery market,” Mogha said.
Bobby Budhrani, partner in Magia Limited, a Hong Kong-based jewellery company which regularly exhibits at shows around the world, supplies high-end necklace sets which, he claimed, were not affected by economic uncertainties.
He said: “There is always a good demand for high-end products, though there has been a slump in medium and low-end products. Political uncertainties do have an impact on business and affects buyers’ confidence. Although India is currently passing through some uncertainties, it is, undoubtedly, a huge market inherent with incredible demand potential. I believe that India, along with China, will be a bright spot amid the uncertainties that plague the trade, and will also attract all the major designers and high-end producers who are opening stores in Mumbai, Delhi, etc. Many of the exhibitors at the Hong Kong shows already signal their willingness to start business in India.”
‘Made-in-HK’ still preferred
VISITORS to the Hong Kong pavilion at the JA Jewelry Summer Show told Hong Kong Jewellery that they were impressed by Hong Kong manufacturers’ ability to produce jewellery set with small stones and elements of contemporary fashion. Besides being strong in production of pure gold products and recognised as a major centre for production of jade jewellery, Hong Kong has also evolved into a leading trading and distribution centre for pearls in recent years.
Hong Kong’s most popular product category is gem-set jewellery, particularly diamonds set in 14-karat or 18-karat yellow or white gold. The gem-setting skills and design capability are competitive compared with world-class European manufacturers.
Hong Kong’s exports of precious jewellery remained resilient, though there has been a slowdown in recent years. The United States and the European Union continued to be Hong Kong’s dominant markets for precious jewellery, accounting for 45 percent in January - October 2014. Nevertheless, negative export growth to these two markets was registered, at 1.4 percent and 2.3 percent respectively when compared to the same period last year. Exports to Switzerland, the United Arab Emirates, Singapore, Taiwan and Japan during the period witnessed a remarkable growth by 20.3 percent, 96.7 percent, 51.4 percent, 29.7 percent and 14.6 percent respectively. In terms of export items, Hong Kong’s exports of pearls, gemstones and rough diamonds increased 12 percent in 2013 and 18 percent year-on-year in January 2014.
The jewellery industry of Hong Kong is by and large export-oriented. A few Hong Kong jewellers have expanded their retail network to mainland China through franchising and cooperative arrangement. They have successfully earned a recognised brand image there. A recent survey conducted by HKTDC showed that, when buying low-to-medium and medium-to-high-end brands, Hong Kong brands were the top choice, compared with local and foreign brands, of mainland consumers. The survey also discovered that Hong Kong brands have a premium of 35.9 percent over their domestic counterparts.
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