RAPAPORT... This year marks the 50th anniversary of the Japan-India business and cultural relationship, as established by the Japan-India Cultural Agreement. 2007 has also been designated Japan-India Friendship Year. There have been a number of events, both in Japan and in India, to celebrate the anniversary and to help promote understanding among the populations of both countries. To promote the jewelry industry specifically, a gala reception, party and jewelry fashion show was held in Tokyo at the end of June. It was cosponsored by India’s Gem and Jewellery Export Promotion Council (GJEPC), India’s Ministry of Commerce, the Indian Embassy in Tokyo and the Japan Jewelry Association (JJA).
“The gala was part of a program operating under the brand name ‘Romance of India’ that tries to introduce many aspects of India, through its products and through its culture. So it shows consumers all the dimensions and is a good introduction to Indian principles,” explained Atul Parekh of Infinity Creations in Tokyo. Parekh was one of the coordinators of the event, at which various dignitaries delivered speeches encouraging cooperation between the two countries.
Starting A Stalled MarketDespite the gala’s optimism and fanfare, the Japanese market has been in the doldrums for a long time and the trend appears to continue. With that in mind, was the timing of the event appropriate? “That’s exactly why the timing was appropriate,” answered Parekh. “The Japanese market has been fairly quiet. It does not seem to be picking up through the first half of the year. We expected that could happen, and we thought that with everything that is available, certainly Indian options are at least economically viable. They offer the right stage for the lower-range to mid-range products, which are at least doing very well. In the Indian market, those product lines are extremely active, in reverse proportion to the Japanese market.”
Parekh is trying to partner eight Indian manufacturers with Japanese marketers. “We are giving them the opportunity to look at the products and see if they appreciate them. We are also organizing many consumer events, along with events for important dealers, retailers and department stores across the country, so that they have an opportunity to view the jewelry and, of course, to buy as well,” said Parekh.
“Now that India is not just a supplier but also a consumer market, it’s the two-way relationship we’d like to promote,” continued Parekh. The problem is that in a country where the high-end market is swept away by name brands of the world and the middle to low ends are filled by Indians, the Japanese jewelry manufacturers are in a dilemma. “One way for us to get out of the slump is to go abroad and market our pieces in foreign lands,” suggested Nobuhiro Imanishi, president of Imayo Co., Ltd. and also president of JJA. “We need to collaborate with foreigners. But to do that takes courage, money, personnel and expertise. Unfortunately, few among us have them.”
“Indians have everything that the Japanese are missing,” said Masahiko Akaike of Orient 4Cs. “They handle languages well, they are good at math, they work long hours and they are very global.” For a long time, the Japanese considered Indians only as suppliers of Indian-made diamonds, mostly-low quality melees. Now Indian companies sell finished jewelry into the markets, buy diamonds from Japanese markets and ship them out of Japan when they see the yen/dollar exchange rate to their advantage to “places like Hong Kong and rest of the world, causing serious price competition in Japan,” said Akaike. “Their prices heading for Hong Kong are 10 percent higher than Japanese prices.”
Akaike made a trip to China several months ago and saw jewelry manufacturing factories run by Indians, with more than 1,000 workers in a factory. “There are no Japanese manufacturers of that size in Japan, and no Japanese company can handle such volume,” he said, adding that the products being introduced at this time are not made in China or anywhere else, but in India.
China As A Growth Market
China, by contrast, is showing remarkable economic growth in recent years and appears to be a potential market. Is GJEPC planning similar marketing events in China? “No,” answered Parekh. “As you know, China is a new market, whereas India is a traditional market. The rate of growth in China is obviously much greater, because they did not have anything until now. But for India, jewelry is part of life. It’s nothing new for us. So the rate of growth is smaller but the volume exists in India.”
“India is still one of the most important countries for the jewelry business,” commented Michio Iwasaki, president of Iwaden Sangyo Co., Ltd. and also a director of JJA.
The Marketplace
• Summer is gone, but no major movements are observed in the market.
• Larger stones are drying up in the market.
• As the yen is strengthening, diamond buying by foreigners has subsided.
• Japanese jewelry manufacturers are moving toward traditional Asian materials such as coral, jade, pearls.
Article from the Rapaport Magazine - October 2007. To subscribe click here.