RAPAPORT... Retail sales increased 9 percent year on year during the three-day May Day — International Labor Day — holiday starting May 1, according to China’s Ministry of Commerce. Based on a survey of 1,000 major retailers, it was estimated that retail sales during the three days reached $1.8 billion. Overall sales of gold and other jewelry rose 20 percent during the holiday.
Sales of appliances such as flat screen TVs and laptops increased 11 percent, while sales of automobiles grew 9 percent, reinforcing China’s new status — achieved in the first quarter of 2009 — as the largest automobile market in the world. In discussions with Rapaport, the major diamond retailers said they are generally satisfied with their sales, which got an extra boost because the May Day holiday is a peak season for weddings.
Other May highlights were the International Colored Gemstone Association (ICA) Congress and Jewelry Shanghai 2009.
ICA Congress
The six-day ICA Congress opened May 6 in the Panyu district of Guangzhou City. Attendance was the largest in ICA’s history, with 200 overseas delegates from 26 countries and more than 750 local Chinese participants.
One of the main focuses was a proposal for standardizing colored gemstones in China, a project that is designed to improve quality, industrial competitiveness and consumer awareness of colored gemstones. In furtherance of that proposal, ICA signed a memorandum of agreement with China’s National Gemstone Testing Center (NGTC) to cooperate in the implementation of nomenclature and quality standards.
Colored gemstone jewelry now represents almost 5 percent of domestic jewelry sales, according to ICA, and the market continues to grow as Chinese women increasingly perceive jewelry as a fashion statement rather than an investment vehicle. Foreign delegates to the congress appeared to agree that new business opportunities exist in the vast Chinese market, whose middle class exceeds 200 million people. To help delegates gain access to this increasingly important market, high-level government officials and industry players explained the specifics of doing business in China.
Jewelry Shanghai 2009
Jewelry Shanghai 2009, which opened May 13 and ran through May 16, is the most important trade show in East China and the biggest one in the first half of the year in Mainland China. Open to both the trade and consumers, it featured approximately 400 exhibitors from 22 countries and regions, with 1,100 booths in an estimated 250,000 square feet of exhibition space.
The Shanghai Diamond Exchange (SDE), one of the show’s organizers, presented its own pavilion, with approximately 19 diamond companies exhibiting loose diamonds and diamond jewelry. The Antwerp World Diamond Centre (AWDC) also had its own pavilion at the show, with HRD Antwerp and seven Antwerp diamond companies exhibiting — their second year in Mainland China. Most diamond exhibitors said they didn’t sell a lot of goods on the show site but were able to establish contacts with Chinese buyers. The exhibitors were generally pleased with the May 15 increase in the Rapaport Diamond Price List and said it was a sign that the global market had improved.
There was also quite a lot of attention paid to online business, which was barely noticed in previous years. Not only did Zbird.com and 9diamond.com — the two leading online-based diamond jewelry retailers — exhibit at the show for the first time, but their representatives also gave speeches in seminars and many newly emerged internet-based retailers visited the show.
Wong Ning, general manager of Cheung Ning Diamond, a member of the SDE, also delivered a speech during the show entitled “Resource is the King, Strategy the Key,” an introduction to the online wholesale ordering system that gives dealers access to vast numbers of loose diamonds abroad. Marc Brauner, chief executive officer (CEO) of the International Gemological Institute (IGI) Hong Kong, held a seminar on “Your Clients of the Future and the Internet...Are You Ready?”
A cooperative agreement between Zbird.com and HRD Antwerp was inaugurated on May 15, at the Belgian Consulate in Shanghai, in the presence of Marc Pecsteen, Consul-general of Belgium. Zbird.com will promote and sell diamond jewelry with grading reports by HRD Antwerp, and will promote HRD’s certificate on its website and through its seven showrooms in major cities. “This strategic cooperation between HRD Antwerp and Zbird will provide Zbird’s customers with diamond-set jewelry that has been certified by one of the world’s most respected grading labs. The certificates will display the brand logos of both HRD Antwerp and Zbird,” explained Georges Brys, general manager of HRD Antwerp.
HRD Antwerp, the first international diamond grading lab that provides Chinese customers with a website in Chinese, has scheduled 15 training courses in 2009.
Marketplace
• The retail market was busy during the three-day May Day holiday and the wholesale market continued to be steady. Imports through the SDE increased due
to the Jewelry Shanghai 2009 trade show. Most in demand are rounds in 0.15 to 0.69-carat G+, VS and in 0.15- to 0.69-carat I-J, VVS.
• Demand remains stable for 0.3- to 1.10-carat round, D-H, VS, Gemological Institute of America (GIA)-certified diamonds, triple EX, double EX, or EX cut grade,
with none to faint fluorescence. The shortage of triple EX diamonds continued and the asking prices are increasing, with continuing increases anticipated.
Article from the Rapaport Magazine - June 2009. To subscribe click here.