Rapaport Magazine


By Avi Krawitz
New Partnership Creates New Opportunity

The corridors of the Israel Diamond Exchange (IDE) were covered in bold blue advertisements in April as the exchange called on suppliers to upload their diamonds to the James Allen website. IDE, together with the Israel Diamond Institute Group of Companies (IDI), announced its partnership with the online jewelry retail platform in early April, providing the framework for Israeli suppliers to access the business-to-consumer (B2C) environment, explained Shai Schnitzer, president of S. Schnitzer Diamonds and chairman of IDE’s IT and innovation committee.
   “We see a change in buying patterns with Millennials, and previous generations are also learning to work in this space,” Schnitzer said. “The James Allen partnership follows that trend. Not only is it a good marketing tool, it also gives suppliers an ability to assess what’s happening in the market in terms of prices, demand trends and what other suppliers are doing.”
   The partnership follows a program launched in 2015 for Israeli diamantaires to learn how to sell their goods through eBay. IDE recently held a seminar for the program’s graduates to help them understand how to use advanced selling techniques on the popular website. Elad Goldenberg, business division manager at eBay Israel, said the company sees potential for the diamond sector on its website and is working on solutions to unique challenges that the industry faces, such as shipping and processing product returns, IDE reported.
   In addition to the eBay and James Allen programs, Schnitzer pointed out that the IDE and IDI are working on further projects to connect the Israeli diamond trade with the “external ecosystem,” mainly online. More details about these plans will be revealed in the coming months, he said.

Exports Decline
   The industry is hoping such initiatives will help boost its trade numbers after levels fell again in the first quarter of 2016, following the slump last year. Israel’s polished exports fell 17 percent year on year to $1.4 billion in the three months that ended March 31, according to data published by the country’s Economy Ministry. Declines were recorded in exports to the U.S., Hong Kong, India and Belgium but shipments rose to Switzerland.
   Dealers noted that U.S. demand remains steady, despite the decline in reported data, and they were relatively optimistic about the upcoming JCK Las Vegas show. Schnitzer predicted the focus in Las Vegas is likely to be on the bread-and-butter .30-carat to 3-carat diamonds, which are “selling well in the U.S.,” he said.
   Amid some skepticism about the value of participating in too many shows, suppliers who spoke with Rapaport Magazine agreed that it’s important to maintain their participation in the larger shows such as in Hong Kong and Las Vegas. Schnitzer stressed that the shows are not only about selling as they used to be. They are also about public relations, marketing and networking to enhance the image of an exhibitor’s company, he noted.
   Nonetheless, dealers are approaching the trade shows with caution given the state of the market during the past year and a half, according to Dotan Siman-Tov, managing director of Lili Diamonds, a manufacturer of patented, special-cut diamonds, layouts of fancy shape diamonds and high-end jewelry.

Slow April Trading
   Trading slowed in April, the month recognized as the start of a quieter period for the polished market and as dealers take vacation over the seven-day Passover break. This year, they left somewhat concerned about sluggish global demand.
   “The main problem is that demand is still weak because the shops are full with goods. And with all the new rough that was bought at the beginning of the year, supply will exceed demand,” Siman-Tov said. “It may be too soon to tell, but that may affect the Las Vegas show.”
   Daniel Yakubov, executive director of Yakubov Diamond Couture, a jewelry retailer with six stores in Israel and two in Hong Kong, argued that weakness in the diamond market stems from the slowdown in China. He explained that policies such as limitations on cash transfers from China have curtailed overseas spending among Chinese diamond buyers and luxury tourist shoppers.
   Yakubov went on to say that the company experienced a drop in tourist spending at its Israel operations in 2015, particularly among the large quantity of Russian tourists who typically visit Israel and who were affected by the weaker ruble. Their spending has improved in 2016 as exchange rates rebounded and visitor traffic improved, he noted.
   In fact, most suppliers who spoke with Rapaport Magazine expect 2016 to be a better year than 2015, even as the first-quarter numbers were down and trading slowed in April. “As we saw at the Hong Kong show at the beginning of the year, people need goods because they didn’t buy last year,” Siman-Tov said. “So I’m more optimistic for this year.”

Article from the Rapaport Magazine - May 2016. To subscribe click here.

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Tags: Avi Krawitz