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Israel
By Avi Krawitz
Breaking from the traditional role of the diamond bourse, the Israel Diamond Exchange (IDE) continued to seek ways to facilitate online sales among its members with the opening of a new center dedicated to promoting online marketing. “We’re pushing the trade toward modernity by coaching small- and medium-sized businesses that are not familiar with online, nor have the capability to use it effectively,” said Yoram Dvash, IDE’s president, at the center’s opening ceremony. The center, equipped with computers and machines to scan an image of a diamond, is located next to the trading floor and manned by an IDE employee available to guide members in navigating the online trading environment. That may involve uploading their inventory to various websites, taking an electronic image of their diamonds for a more effective online presentation or searching for possible deals. While many companies are internet savvy and have the capacity to grow their online trading, many of the smaller, older-generation businesses don’t have that know-how, explained one diamond dealer who requested to remain anonymous. Opening the center is part of IDE’s wider strategy to encourage members to embrace online trading after the bourse launched its “Get Diamonds” trading platform and forged a partnership with James Allen, enabling members to sell their inventory through the consumer-focused website.
The fact that online trading is accounting for more activity than before is a natural development, according to Shai Schnitzer, president of S. Schnitzer Diamonds and chairman of IDE’s IT and innovation committee. “Buying patterns have changed and people are more open to doing business online,” Schnitzer said. Buyers want more information, which they can get online, especially with tools such as 3-D imaging that are available today, he added. Schnitzer suggests the online trend is mirroring what’s happening in the retail space as brick-and-mortar jewelers are struggling to compete with etailers. In addition, more consumers are looking to put their own signature on the piece they’re buying and ecommerce lends itself to the customization trend. This is presenting a challenge for independent jewelers to maintain sales, as the market embraces this new way of doing business, with jewelers selling online and using social media to connect with consumers, Schnitzer explained. But that’s not to say one method is better than the other. If anything, Schnitzer notes that face-to-face interactions have a stronger sales conversion rate — both in the consumer and trading environments. Traditional brokers have had to adapt as well, he stressed, adding that there is still a place for them in the market. “People used to think that online trading would replace regular trading. But we see today that it can’t exist on its own,” he said. “The combination is necessary.”
While online activity continues to grow, diamantaires noted that the market has been positive in the first half of the year, with steady U.S. demand complemented by an improvement in demand from China. Israel’s polished exports increased 16 percent year on year in the first quarter, with shipments to the U.S. rising 4 percent during the period. Growth was also spurred by a sharp rise in exports to Switzerland — triple 2016 — as the Basel show took place at the end of the quarter, compared to the beginning of March last year. However, to put that in context, the data was not presented on a comparable basis since goods had not yet been returned from the show, whereas they did in the comparable quarter of 2016, one broker explained. Still, dealers were encouraged by activity with Israel’s two largest partner centers — the U.S. and Asia Pacific — even as momentum from the Hong Kong show slowed in May. Buyers were relatively cautious ahead of the Las Vegas show season that started after press time. Some noted that inter-dealer trading in the bourse was sluggish during the month and sentiment was weaker than in April as suppliers held off from deals, feeling prices might strengthen around the Las Vegas shows. Trading was also disrupted with a number of shorter weeks occurring as Israel commemorated Memorial Day and subsequently celebrated its Independence Day holiday. In general, dealers expected sentiment to improve after the Las Vegas shows as the market starts to work toward the holiday season. “We had a good opening in 2017 in both the rough and polished markets and I anticipate the trend will continue in the second half,” Schnitzer said.Article from the Rapaport Magazine - June 2017. To subscribe click here.
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