A conflict between the scheduling of the Hong Kong Jewellery & Gem Fair and Jewish religious holidays effectively shortened the show’s schedule this year. Both Jewish exhibitors and buyers skipped the last two days of the fair, which was held between two very important Jewish holidays, Rosh Hashanah and Yom Kippur. In some cases, Jewish buyers did not attend the show at all, reasoning that coming for only three days was impractical. Other buyers arrived in Hong Kong on the third day of the show and were disappointed to learn that some exhibitors were closing down the next day.
For the second year, the diamond pavilion of the fair, as well as gemstone and pearl companies, were located in AsiaWorld-Expo (AWE) adjacent to the Hong Kong International Airport, rather than in the Hong Kong Convention & Exhibition Centre (HKCEC)) in the city, where finished jewelry exhibitors were housed. The 2009 show, the first in the new venue for diamantaires, dispelled all the apprehensions exhibitors had that buyers would not come to the new location. This year, however, buyer traffic was definitely thinner than in 2009.
There were, of course, the stalwart supporters of the fair who come to every show. There also were more new buyers from surrounding Asian countries, such as Vietnam, the Philippines, Thailand and Myanmar.
Indian buyers continue to be the main visitors to the diamond pavilion. The Indian domestic market is not that active at the moment, but the buying done at the show is in anticipation of the Indian marriage season, which normally occurs toward the end of the year and into the new year.
Demand was concentrated mainly in large stones and there also was interest in fancy cuts. In the first days of the show, there was buyer resistance to the high prices, but, early on, deals were struck because of the shortened working time for the fair. In a way, the reduced schedule pushed both buyers and sellers not to waste time and to get down to business.
Bad Timing
It was suggested by both exhibitors and attendees that the show organizers should take such important holidays into consideration when scheduling shows. The whole atmosphere of the show suffers when there are closed exhibitor booths. This is not the first time a scheduling conflict has occurred and it might be advantageous to shift the timing of the fair for the future, either to early September or October. There are other fairs whose dates do not conflict with holiday observances and they might be amenable to swap schedules.
Lead times for the purchase of diamonds and jewelry for the Christmas season used to be longer; therefore, it was important to have the show in September. But, over the past few years, buyers have been delaying their ordering to October and November, and jewelry manufacturers have adapted their production so that they can meet delivery dates for later orders. As a result, the earlier show date is no longer so necessary.
Chinese Visitors Hassled
It is not clear which came first: cases of diamonds being switched in some diamond booths or the body searches conducted on buyers from the Mainland. What is clear is that Hong Kong police targeted Mainland Chinese buyers to the show and took them aside for questioning and body searches. Buyers who went through the ordeal complained that the treatment they received was demeaning and uncivil. The news spread quickly and it discouraged other buyers from China from visiting the show.
For whatever reason, the number of Chinese buyers was thin this year. The demand in the Chinese domestic market was heavy in August, as retailers and jewelry manufacturers rushed to prepare jewelry for the October Golden Week, a prime retail time. The main focus now is on selling during this important retailing period and buying is expected to resume soon after, depending on how much is sold during the holiday.
Consumer spending in China reportedly has not abated, despite the government’s constant warnings that it wants to cool down the booming property and equity markets. Investors continue to ride the wave and prices are still on the rise, meaning that more money is being created and there is more to spend.
The main demand for southern Chinese markets is still in the H to J colors in VVS to S. For some markets, like Shanghai, the requirements are for G colors-plus and triple EX goods. There also is an emerging trend for lower colors, as the prices for these are still low and the supply is adequate. Stones in H,VVS1 from 30-pointers up to 5 carats are in constant demand, but these seem to have become extremely scarce and what is available is priced at high levels that the Chinese market still cannot accept.
SI Demand Surges
Buyers from around the world are clamoring for SI stones. Unfortunately, for Asian buyers, black inclusions are not acceptable, so even if the demand is high, only a certain percentage of the stones in the SI category are right for these markets. Other buyers were looking for bluff stones or what some people call “Flash for Cash.” They will take stones with inferior cuts or with fluorescence if these are highly discounted.
The Marketplace
• 3 carats and larger — either in the highest clarity, cut and color grades, or else in lower colors, or in SI in high colors — are in big demand.
• Large fancy cuts over 5 carats are moving well. Buyers are more demanding on the models and cut grade in these goods.
• Demand is good for 1-carat stones in all colors and grades, with the exception of D-F, VVS.
• There is strong interest in 30-pointers and 50-pointers, mainly in H-J, VVS or else in G-H, SI. Some buyers are also looking for piqué goods in these sizes.
Article from the Rapaport Magazine - October 2010. To subscribe click here.