Rapaport Magazine

Hong Kong Show Stays the Course

Dealers found business to be satisfactory, with demand solid for goods up to a carat.

By Mary Kavanagh

One of the highlights of the 32nd Hong Kong Jewellery & Gem Fair, held September 15 to 21, was the world’s largest Diamond Pavilion, where 435 diamond companies exhibited in more than 170,000 square feet of space. The fair was also home to the world’s largest display of Hong Kong jewelry — 1,342 local companies accounted for approximately 36 percent of the total number of fair exhibitors. In fact, this year’s impressive statistics represent the “largest edition in the fair’s history in terms of the number of exhibitors and exhibitor space,” Wolfgang Diener, senior vice president of UBM Asia, the event organizer, said at a press conference during the fair.

Exhibitors More Positive
   Exhibitors were generally more upbeat about this year’s show than the 2013 fair. Dov Tannenbaum, partner at Leo Schachter Diamonds East Ltd., said his company was “busier than expected” and met a number of new customers. “We saw strong demand for pointers up to 1 carat,” he said, noting that business was very slow for bigger stones in the 1-carat to 10-carat size range.
   Eunice Cheung, Man King Jewellery Company Ltd., said the September and March shows are the most important for business as they provide a good opportunity to meet new customers. Man King, a manufacturer, wholesaler and exporter of fine jewelry, had “a good first day,” with many returning customers and strong demand for wedding bands and fashion rings with small diamonds.
   Hong Kong designer Payal Shah, director and founder of L’Dezen Jewellery Company, said she had both “busy and nonbusy periods” during the show, but it is an important platform for her to meet existing customers and attract new clients. Shah, who uses sliced and rose-cut diamonds in her one-of-a-kind lightweight products, also used the show to test new designs and the price points at which people were interested in buying her goods.
   Members of the Diamond Federation of Hong Kong were generally positive about the show and reported good demand for commercial goods, according to Lawrence Ma, founding president and chairman of the association. “Demand for 1-carat goods is strong in VS, SI quality,” he said, adding that VVS is not so strong at the moment. Ma acknowledged that the past six to nine months have been challenging for all involved in the diamond business in Hong Kong, with the retail jewelry sector being particularly hard hit.
   Visitor numbers from Mainland China are down, yet Ma was optimistic about the market gaining strength from now through April 2015. “I am confident that Hong Kong still represents a cost-effective place for Chinese consumers to buy diamonds and they can be confident of the quality they get here,” he added. Volume at the very high end of the market has weakened, but Ma predicted the demand for wedding and engagement rings in China will be very strong in the next 10 to 20 years.

De Beers Launches Insight Report
   There were a number of educational seminars by professional organizations during the fair, including the launch of the inaugural insight report on the diamond market by De Beers. The report highlighted growing consumer demand for diamonds, in particular from countries such as China, India and the U.S., but it also pointed out a number of risks and challenges for the industry.
   Philippe Mellier, the chief executive officer (CEO) of De Beers, spoke of “the complex and changing environment we can expect to encounter in the years to come.” He also cited the need for the industry to understand and address these risks and opportunities in order to combat increasingly stiff competition from such luxury sectors as electronics, fine wines, beauty and personal care.
   The report forecast a reduction in diamond supply from existing sources and subsequent difficulty in meeting customer demand. It predicted rough supplies would plateau in the second half of this decade before declining from the year 2020 forward. Identifying and exploiting new sources is a complex and costly process.
   Recommendations contained in the report included the industry making a significant investment in a number of areas, such as diamond production, technology, creating and building brands, and online marketing, in order to continue to be successful in the future. “If we choose to invest, we stand on the cusp of the greatest opportunity for growth that the industry has seen in more than a generation,” said Mellier.

Bigger and Better
   The seven-day Hong Kong show, which was held at two different venues in the city, is the biggest B-to-B jewelry event in the world, attracting more than 3,694 exhibitors from 49 countries and regions around the world. Exhibition space at both venues totaled over 1.4 million square feet. The AsiaWorld-Expo (AWE) venue featured raw materials, equipment and packaging and the Hong Kong Convention & Exhibition Centre (HKCEC) showcased finished jewelry. More than 60 new exhibitors participated in the show.
   “The fair’s steady growth indicates the exhibitors’ confidence in the fair as an effective marketplace and platform to tap into the lucrative Asian markets,” summed up Celine Lau, director of jewelry fairs for UBM Asia. 

Article from the Rapaport Magazine - October 2014. To subscribe click here.

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