On the drab background of generally downbeat business news brought by the four winds of the globe some segments of the jewelry industry seem to be gearing up for better times ahead.
According to Russia Today, a Moscow based English language TV channel, Russian jewellers look to innovation and palladium to keep the sales momentum up. Russia's jewellery business is facing tougher times, but the crisis is the best time for promoting innovation - that’s the message from major jewellery producers meeting in Moscow, the channel says. Despite the financial gloom, Russia remains one of the largest and fastest-growing high-end jewellery markets in the world. The domestic jewellery business could be doing better, if it wasn't hamstrung by tariffs, says Alex Popov, President of the Moscow Diamond Bourse. But neither the tariffs nor the crisis are stopping foreign investors from launching new projects in Russia. One of India’s leading manufacturers of gold, silver and diamonds has ambitious plans for a multi-million dollar investment in the country, according to Shah Hemant, COO of Derawala Jewellery Industries: “What we’re looking for is to form the shortest channel of business between Indian manufacturers, Indian producers of diamonds, and the Russian jewelers right up to the consumer level.”
Some industry players believe the crisis can also be a good environment for promoting new products. For example, Russia’s Norilsk Nickel - the world’s leading nickel producer - is promoting palladium as a new precious metal for jewellery, according to Anton Berlin, Head of Market Analysis and Development at Norilsk Nickel. “Palladium is a noble metal which belongs to the platinum group and has similar properties. It’s ten times rarer than gold and due to its relatively small market it’s cheaper.” Though not yet popular globally, the palladium jewellery market has already seen significant growth in China - it’s now a matter of time and marketing.
Although luxury goods like jewellery are usually the first to go when consumers start tightening their belts, industry players believe there are still opportunities out there as long as you hit on the right target and supply the right goods, the JewelleryNetAsia portal says.
Some Hong Kong manufacturers expect lower-end goods to thrive in times of turmoil because they expect the middle class to downgrade. Polaris Jewellery Manufacturing is taking heed: it now produces jewellery pieces in smaller sizes with lower gold caratage to suit this market demand. And for the first time, the company is going to introduce silver jewellery set with natural gemstones next year. Plans to launch stainless steel pieces are also underway, Dennis Ng, managing director of the company, told JNA.
Other companies, however, think that silver and stainless steel are unlikely to become substitutes for fine jewellery. "I think they are different markets. Silver is more of a fashion accessory and does not offer a store of value. Fine jewellery consumers always opt for something that is valuable," commented Jesse Lau, director of Thousand Million Jewellery Manufacturing Ltd. On the contrary, she expects sales of solitaire diamond jewellery from around 50 points to 1 carat to pick up, as the item offers a store of value. Bridal jewellery is another segment that is expected to remain stable because many consider it a necessity even during times of adversity. "We talked to some sales agents in the US, and they agree that bridal jewellery is a must item in this economic recession. Normally the marriage rate in the States rises even during turbulent times because couples can share daily expenses. This crisis could thus create a bigger bridal market," said Ms Lau. She said the company will be introducing more bridal jewellery designs with more competitive price tags to answer this market demand. She noted too that since the record-high platinum prices have started to come down, more orders are now coming in for the metal. "Sales of platinum jewellery have increased 20 to 25 percent in recent months despite the market situation," Ms Lau noted.
While jewellers generally expect sales of fashionable jewellery pieces to slow down, they believe that they remain vital for their showcases to stay fresh and stimulate demand. "It is not going to work supplying only the safest designs - this will only further dampen consumer appetite. Whether they are going to sell well or not, it is still important to come up with new designs constantly," said Jacky Lam, marketing manager of Peter Lam Jewellery Ltd.
According to another article posted on JewelleryNetAsia, as business comes to a halt, Hong Kong jewellers know better than just sit on their hands and wait for the good times to come back. They know that there is perhaps no better time than now to prepare for the market rebound. As the saying goes, opportunities come to those who are ready. Whether it is reorganising a company's structure or diversifying into other businesses, Hong Kong jewellers share one common characteristic - they don't give up.
Thousand Million Jewellery Manufacturing Ltd chooses to see the current crisis as a blessing in disguise. "The rising wages in recent years have been a burden for small manufacturers like us and things have become even tougher when the new labour law came into effect in China early this year. Now that many companies have laid off staff and wages have gone down, we can hire more experienced people both in Hong Kong and the mainland at lower costs. This way we can better prepare ourselves for when things get better," said Jesse Lau, director of the company.
The financial crisis has not stopped the Aaron Shum Group from implementing its aggressive plans, in fact, it accelerated their rollout. They include expansion in the Middle East and in mainland China - the two markets the group considers very lucrative. Aaron Shum, president of the group, believes that diversifying in times of crisis helps. "If you specialize only in exports, it is inevitable that the crisis will affect you but if you diversify your businesses, things could be a lot easier," he said. He added that while the group's exports could drop by 15 percent by yearend, its retail sales in the Middle East alone, could jump by as much as 30 percent.
JewelleryNetAsia also informs that, despite the global financial crunch and Thailand's political standoff, business is expected to be as usual at the 43rd Bangkok Gems and Jewellery Fair (BGJF) that is slated to be held from February 25 to March 1, 2009. BGJF chief executive Somchai Phornchindarak said preparations for the 43rd BGJF are proceeding without a hitch, and he expects the fair will continue to offer value to both buyers and sellers, especially at a time when the market needs some stimulation. Over 90 percent of the 1,300 exhibitors have already confirmed their participation in the show, the organizer added.
