Hong Kong ranks as the world’s fourth-largest exporter of jewelry, after Italy, the United States and Switzerland. In 2010, Hong Kong exported $4.4 billion, a more than 20 percent increase over 2009. It’s no wonder, then, that the 28th Hong Kong International Jewellery Show, held March 4 to 8, ended its five-day run with a satisfyingly high turnout. According to the Hong Kong Trade Development Council (HKTDC), the fair organizer, a whopping 37,000 visitors attended the 2011 event, an increase of 16 percent over last year.
The number of exhibitors also rose: There were more than 2,800 exhibitors from 46 countries and regions, making this one of the largest of Asia’s jewelry fairs. Spread out over several floors in the vast Hong Kong Convention and Exhibition Centre (HKCEC), jewelry pavilions were divided according to categories, with major manufacturers located in the Grand Hall, large diamond dealers and suppliers in the Hall of Nature and branded goods in the Hall of Fame.
Dominating the major pavilions were all categories of diamond and gemstone jewelry. Major trends included designs blending white and colored diamonds, especially black-and-white and brown-and-white combinations; huge diamond-encrusted flowers; large, flat and openwork shapes accented with diamonds and oversized, wrapped, domelike and three-dimensional rings covered in pavé.
A wide range of designs was on view, but by far the most popular theme was nature: flowers, butterflies, serpents, spider webs and sea life. There was also increased emphasis on semimounts with either micropavé, prong- or channel-set side accents.
High Diamond Prices
Diamond suppliers in attendance were in general agreement on two points. On the positive side, exhibitors said the show was busy and exhibitors saw many of their regular customers. On the negative side, exhibitors said prices of the most-wanted diamond goods were totally out of line and rising by the day, leaving them no choice but to deal with the situation. Another hurdle was explaining the problem of skyrocketing prices for in-demand goods to their customers. As one exhibitor put it: “Established buyers understand this problem, but new buyers don’t get it.”
“Prices of small goods are much too high, and the almost-daily price shifts make it impossible to quote prices for more than 30 days, as in the past. Now, before confirming orders, manufacturers have to make daily calls for prices,” observed Davies Tan, owner of DWL Creations Ltd., a Hong Kong jewelry manufacturer. Tan, like many others, does contract work for other firms, and is diversifying his products to go to a broader market.
Sumeet Sethi of Manak Jewels in San Francisco noted lots of traffic during the first couple days of the jewelry show, but fairly slow sales. Diamond prices are “tremendously high across the board,” he said, and buyers were taking their time before committing. However, many have waited so long, they no longer have a choice because they need to fill inventory, he said. Sethi said he expected that many would look in Hong Kong and wait until Basel to place their orders.
Buy Now
Swaroop Biswas, marketing manager at Kiran Gems Pvt. Ltd., Mumbai, however, found that people weren’t waiting for Basel to buy. “They have to buy now before the prices rise again,” he observed, noting a changed perception on prices. “Initially, people perceived that diamonds were too expensive, but now with the price of gold, people are more willing to spend on a diamond. Spending levels are going up.”
For those selling larger goods, business was good. Greg Kesten of Jack Reiss in New York City noted strong opening-day sales at the Hong Kong show. “Triple EX rounds were the best category; hearts and pears have also been good,” he said. At Akshar Impex Pvt., Ltd., Mumbai, Sales Executive Prashant Shah said, “I’m not complaining, business is good.” Most of his customers were looking for 1-carat goods, D to G color, VS to SI clarity.
A. Schwartz & Sons, (Hong Kong) Ltd. is known for round white and fancy yellow diamonds from 30 points to 10 carats, said Elad Kirshberg, sales representative. He said he saw mostly Asian buyers at this show, who were on the lookout for high-quality diamonds. His company’s best-selling range was D to F, VS to SI with Gemological Institute of America (GIA) certs.
Small Diamonds for Large Effect
Asian Star Jewels, based in India, sells its branded Passion Jewels collection to world markets. It is using fewer and smaller diamonds and less gold but with greater effect, according to Shrowen Shah, sales director. “Market share is growing,” he said, “but margins are tight. The prices of some items are up 30 percent. With gold almost doubled, what used to be our selling prices have become our costs.” Some new rings alternate tiny diamonds with grains of white gold for the look of overall pavé. In 9-karat gold, they sell for $100 to $200. “Most of our production is under 20-point sizes and those are the prices that have gone up the most,” Shah said.
The Lady Dream Collection, in which small diamonds create the illusion of a larger stone, has been very successful for B K Jewellery, Hong Kong, according to U.S. Sales Representative Eddie L.L. Huang. Introduced in 2008, this innovative diamond-setting technique is used in round, pear- and heart-shaped designs. For the round brilliant look, a round center diamond is framed by nine smaller diamonds; a half-carat total-weight setting resembles a 1.5-carat solitaire, with the same refractive index as a single diamond. The look has been highly popular with both American and Chinese audiences, Huang said.
New Brands, New Materials
As world markets make the slow climb out of recession, Chinese manufacturers are doubling their efforts to produce salable, appealing jewelry that won’t break the bank. Diversity has become the buzzword in terms of materials, price points and marketing. As to the latter, many new collections are aimed at female self-purchasers and the branding efforts begun a few years ago are in full swing.
Several design houses introduced new brands and materials. Hong Kong–based Albert Tsang Ltd., known for traditional diamond and gemstone jewelry, introduced a new division, ATL, a designer collection with wide silver cuffs with gold, diamond and gemstone accents. Goldiaq Creation, Hong Kong, unveiled a new collection of insects and sea life made of hematite, white agate and pink quartz, accented with diamonds and pink sapphires. These styles sell well in the U.S., particularly on the East Coast, said Bronia Yip, managing director.
E &V Jewellery, Hong Kong, known for its designer collection of high-fashion gold and gemstone jewelry, added a new look specifically aimed at the Russian and Chinese markets. It featured butterfly rings, pendants and earrings of pink and green amethyst set in lacy, cutout gold that showed beneath the transparent stones.
A number of exhibitors said their newest product developments were being aimed at China before being rolled out to the rest of the world. One of these was an innovative new product from King’s Mark, Hong Kong. The new item is electroformed, 24-karat “hard” gold. Pure gold items and jewelry — chuk kam — have long been a Chinese tradition both for adornment and investment. Most of these items are very soft; those fashioned into rings, earrings and bracelets often stretch and bend. The electroforming process, first used on gold in the 1980s, deposits multiple layers of gold on a wax base, which is later melted out, resulting in large, voluminous silhouettes. However, due to the design’s hollow structure, the jewelry is subject to dents and tears.
The result of this new process, according to King Li, owner of King’s Mark, mimics the hardness and durability of 18-karat gold, is stronger than regular electroformed pieces and can actually be used for gem setting. The company unveiled several pieces during the exhibition, and is waiting for customer response to determine production. Li says future markets will include India, South America and other Asian nations.
Targeting China’s Wealthy
Vulcan & Co., Ramat Gan, a diamond manufacturer established in 1952, focuses on a core business of fancies, such as pears, ovals, marquises and hearts. “We sell mostly high-end goods of 2 carats and above,” said Liora Borosky-Chayu, marketing director. Best-selling qualities are D to H, VVS.
“We are focusing on the Asian market, Borosky-Chayu said, and not targeting the U.S. Vulcan is not aiming for the mass market, but is looking to the boutique market in China, she added. “Fancies are the third or fourth purchase for women in Europe and the U.S.,” Borosky-Chayu said. “We are hoping to be there when that trend happens in China.”
Another colored diamond specialist waiting for the same phenomenon is Cora International, Hong Kong. “Right now, the Chinese customers prefer large, white diamonds,” said Roger Chan, “but we believe this market will open in the future.”
All the action wasn’t limited to diamonds at this major show. Colored gemstone suppliers also noted significant sales to Asian clients, who demanded top-grade gems. Sam H at Ijadi Gem, sapphire dealer, said his customers wanted bigger, better goods. The Chinese like large fine gems, he said.
Jeremy Millul, sales manager at New York emerald dealer Joseph Gad & Co., said prices for emeralds were rising due to stronger demand. Some sizes, particularly large stones, are hard to find, so their prices rise accordingly. The Asian market is one of the world’s largest for emeralds, he said.
While economists expect the market for luxury goods to continue to grow in China, there will be some subtle shifts along the way. In fact, a new study conducted by Chow Tai Fook Jewellery Group, one of China’s leading retailers, found that the rapidly growing Chinese market is exerting a strong influence on the world diamond supply. The study concluded that at the current speed of mining, the existing diamond reserves will only satisfy the Chinese market for another 25 years. At the same time, China’s one-child policy will result in a slowing down of diamond engagement ring sales and a shift to fashion diamond jewelry. This movement toward fashion styles — and branded collections — could have a notable impact on jewelry manufacturing and sales in the near future.
Article from the Rapaport Magazine - April 2011. To subscribe click here.