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Hong Kong Show Closes Amid Price Uncertainty, Economic Concerns

Sep 25, 2011 10:30 AM   By Avi Krawitz
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RAPAPORT... Diamond and jewelry suppliers appeared satisfied at the close of the Hong Kong Jewellery & Gem Fair on Sunday even as visitor traffic slowed and buying remained cautious during the final days of the event.

''The show fell at a time when the global economy has been weak and that was reflected in the show,'' said David Wiener, vice president of Harry Kotlar & Company, a Los Angeles-based jewelry wholesaler who attended the fair for the first time. ''For us the show has been important to initiate relationships in the region because we believe these contacts will eventually lead to sales.''

Wiener noted that Chinese retail buyers visiting the show appeared enthusiastic to learn about larger, high-quality stones, signaling growing interest to develop the big stone market in the region.

Still, Flora Wan, vice president of marketing at ENZO, a Chinese retail chain, noted that the local market for diamonds was focused on stones in the size range between 0.70 carats and 1.10 carats, while buyers maintained a focus on better clarities, VVS-VS, and color ranges of G to I.

Most loose diamond vendors agreed, but also noted that buyers in the region are starting to show more willingness to compromise on quality and are moving towards SI clarity stones for more affordable price points. Most reported some weakness in demand for the VVS goods. ''The Far East is increasingly looking for lesser quality goods,'' said one New York-based diamond manufacturer, who requested anonymity. He noted that there was strong demand for 1-carat, VS-SI1 stones at the show, with a strong emphasis on triple Ex make goods.
Wan noted that consumer interest in ENZO’s niche color gemstones was increasing rapidly in China as was general demand for white diamonds. ENZO recently launched a new wedding diamond collection, which, Wan said, was aimed at promoting diamonds for wedding occasions in the country.  

Few disputed the importance of penetrating the Far East market as U.S. and European demand continues to lag while economic concerns grow. Rahul Dholakia, a marketing and finance director at Shree Ramkrishna Export, a Surat, India-based diamond manufacturer, noted that footfalls at the company’s booth in the diamond pavilion were good and reinforced its confidence that growth will be driven by Far East and Asian markets.

Hanan Rapaport, the Far East sales manager for Ramat Gan-based Avlas Diamonds, a specialist in better-quality fancy shape diamonds, reported that the show beat his expectations because of the niche market in which the company is operating. ''I am not surprised because we are dealing with expensive fancies so we didn’t have to reduce prices,'' he said. ''There are still not enough nice fancies in the market because it’s difficult to find the suitable rough and people have preferred to cut rounds in the past year.''

Most loose diamond exhibitors noted that there was some softening of prices as buyers were prepared to hold out on making large volume purchases. Many came to the show with low expectations and were therefore not disappointed by the low sales and traffic relative to past September shows.

One Mumbai-based diamond jewelry manufacturer noted that buyers appeared willing to wait out the current cautious economic environment. ''Retailers are not in a cash crunch but wholesalers are, so retailers are prepared to sit on low inventories for now and take advantage of the situation,'' he said, while requesting anonymity. ''But everyone is a bit vulnerable with prices and we are waiting to see the extent of the correction and economic conditions.''

Organizers reported that visitor traffic reached 48,188  through the duration of the show, excluding the final day on Sunday. Local Hong Kong visitors accounted for about 30 percent of the total, while 23 percent were from Mainland China and 7 percent from India. The peak days of the show were Wednesday and Thursday and visitor traffic quieted over the weekend despite the show being open to the public on those days.

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Tags: Avi Krawitz, Diamond jewellery, diamond jewelry, diamonds, Hong Kong Jewellery & Gem Fair, jewellery, Jewelry, Polished Diamonds
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