You can show a lot of things, but not buy them all. China is a rapidly growing consumer market with a huge desire to be involved at all levels of the diamond trade, willing to cooperate with everyone, and the Hong Kong Exhibition turned into a kind of indicator to determine the situation and mood reining in Asian markets. The thirty years of Hong Kong Jewellery Fair are a significant anniversary and a wonderful age reflecting the strength of its position.
The September edition of Hong Kong Jewellery & Gem Fair 2012, which had been so much looked forward to and which many people pinned their hopes on while planning their trips to the Chinese mainland, was finally brought to its close.
The first day of the exhibition was measured and calm with busy pavilions slowly filled by visitors, but it lacked the raging rhythm expected by merchants and other jewelry fair participants. By the end of the week, sales came to life as many buyers from Brazil, Russia, India and China were seen coming in. Meanwhile, U.S. and European buyers apparently decided to wait out the period of uncertainty.
It would be unfair to consider the results of this show better or worse in comparison with 2011, for in any case they point to sustainable movement in the market.
If you remember the time when Chinese buyers started a crazy push for consumption of high-end jewelry, many companies all once rushed to conquer the Chinese market. A nyumber brands were quick to establish their subsidiaries, factories, stores, showrooms, and offices in China. Someone loved it immediately, someone did not like it initially, but later enjoyed and very much, and someone does not like it until now. As one American put it: “Even if you do not go to Asia to have it made someone else will.”
Several years ago, Hong Kong was a primitive place for big wholesale deals and small-scale knick-knackery, a market for cheap purchases. Today, Hong Kong is firmly entrenched in the leading position among the world's jewelry exhibitions, and famous brands started to come here bringing along exclusive jewelry and showcasing large diamonds. Having acquired a new look, modern Hong Kong has become the center point of the global jewelry market. As it seems, it will take just a few years and much of the total share of sales will tilt from the U.S. to China in terms of consumption of diamonds and jewelry.
Many are still trying to analyze the hopeless situation in case the U.S. will lose its leadership in the jewelry industry. Asian countries pay their workers a tenth of what the Europeans or Americans do and to make the United States able to regain its championship now they will have to offer the same price, which is absolutely incredible.
China has established and led a huge consumer market for jewelry, and Hong Kong has become the most important trade show for the diamond and jewelry industry.
In the past five years, China’s consumption growth stimulated investments into the Chinese market. But there are no growth periods without slumps, and 2011 started to see this growth losing its steam dramatically due to increased prices for raw materials used in the jewelry industry. Some tepid revival in the market registered in early 2012 had its imprint on the February exhibition in Hong Kong. During the year, growth was trying to regain its feet on the ground, and the September exhibition proved though a muted, but nevertheless recovery in the market.
We interviewed several participants to find out their impression about the latest Hong Kong jewelry show.
Indian diamond dealers expected more from it and finally got something, however not to the extent they would like to. According to them, regular customers made orders, but in smaller quantities.
Israeli diamantaires said the show was marked by a very quiet demand from buyers; for some companies foot traffic and sales went up, whereas for others they went down.
A Belgian trader dealing in fancy diamonds said that the show was more relaxed compared with 2011.
As in the previous exhibition, Brazilian buyers were still contemplating and analyzing the supply of precious stones and their price limits.
Local demand from China remained moderate, as well that from India and other countries in the Far East.
Lately, consumption patterns are completely dependent on demand from Asian markets.
Diamond buyers are divided into two categories - those focused on specific commercial goods of high quality seeking to buy expensive high-clarity large stones from 1 carat and above, and those interested in a lower price range, closer to the commercial mid-value, up to 0.5-1 carats (VS-SI).
The average consumer demand for expensive jewelry fell, with most people not willing to spend large sums of money to buy jewelry. They want to buy affordable jewelry, which was scattered in excess all over the exhibition center in Hong Kong.
Adornments are now bought both on special occasions and without. In the past, women used to take jewelry as gifts from their men and now women choose and buy jewelry themselves.
But the main question is what the expectations of the show participants were? Were they hoping to see some indicator light? Or were they cherishing a hope for recovery in demand in the short term? The market is going through a period of uncertainty and to understand it having visited just one show is impossible. Hong Kong does not mind to make a name as a jewelry capital of the world, but so far it seems improbable it can really unite Europe, America and others.
Veronica Novoselova, Rough&Polished
