Sunday, May 16, 2010

“More Players at Fairgrounds - DIAMONDS.NET”

“More Players at Fairgrounds - DIAMONDS.NET”

More Players at Fairgrounds - DIAMONDS.NET

Posted: 11 May 2010 02:19 AM PDT

RAPAPORT... Jewelry Shanghai 2010, held April 9 through 12, remains the most important trade show in East China and the biggest one in the first half of the year in Mainland China. Open to both the trade and consumers, it featured approximately 500 exhibitors from 15 countries and regions, with 1,100 booths in almost 250,000 square feet of exhibition space.

The Shanghai Diamond Exchange (SDE), one of the show's organizers, hosted its own pavilion and non-SDE members exhibited in a separate diamond zone. With close to 80 exhibitors, it was the largest concentration of diamond companies among all the China shows. Most diamond exhibitors this year said they didn't sell a lot of goods at the show site but were able to establish contacts with potential clients.

Chinese Buyers

As part of the show agenda, China's National Gemstone Testing Center (NGTC) held a series of seminars to promote its services and grading standard. The International Gemological Institute (IGI) produced an industry seminar entitled "Earning Trust — Achieving Sales." It targeted owners and sales managers of major jewelry retailers from Shanghai and across China and focused on building trust with customers and developing not just new business, but working to win repeat and referral business. Speaking at the event, Marc Brauner, IGI's Hong Kong–based chief executive officer (CEO), said growth will remain the overarching theme of China's jewelry consumer market for years to come.

The Antwerp World Diamond Centre (AWDC) also presented its own pavilion at the show for the third consecutive year, with HRD Antwerp and nine diamond companies. In addressing the importance of the China market, AWDC CEO Freddy Hanard said, "The Chinese market is the most dynamic in the world and it is vital that Belgian companies create business links there. That is the reason why AWDC is investing great efforts in establishing and reinforcing links to Chinese buyers. Recent research has shown that the Chinese jewelry market will be worth around $38 billion annually by the end of this decade."

Wedding Era

It is traditional among the Chinese people to value the wedding ceremony, although it often creates a heavy financial burden. The China Wedding Expo Industry Survey Center reveals that the average cost of a wedding was $18,400 in 2009, including photos, banquets, wedding gowns and jewelry. It is estimated that urban couples spent at least $61 billion on their weddings in 2009. With the size of the diamonds offered in the market getting bigger, and the promotions by diamond retailers becoming more widespread, diamonds are gaining in popularity as wedding jewelry and many newlyweds are buying diamonds over 0.50 carats, especially in big cities.

"The next ten years will see a boom in weddings," said Shi Kangning, the general secretary of the committee of Wedding Service Industries of the China Association of Social Workers. "People who were born in the 1980s have entered the marriage age," she said. "In the next ten years, there will be at least 12 million couples getting married each year, a period that we call 'the sweet goldmine.'" Statistics from the Ministry of Civil Affairs show that more than 11 million couples registered for marriage certificates in 2009, a 9 percent increase from 2008.

Fallout from the Crackdown

Since Shenzhen Customs busted a major diamond smuggling ring on January 8, the market in China is adjusting to doing much more business through official — and legal — business channels. With the alleged diamond smugglers in custody, government agencies are continuing their investigation into who had been buying the smuggled diamonds. It was said that, beginning in early April, more local Shenzhen dealers and factories were being brought into the investigation. Many trade members were reported to be seriously considering joining the SDE in order to get a license for importing diamonds. The trade volume on the exchange — the only authorized channel for importing diamonds into China under the favorable tax policy — has increased sharply since the crackdown on smuggling, reflecting a move to doing business through legal channels, as well as increased domestic demand for diamonds.

Wong Ning, general manager of Cheung Ning Diamond, an SDE member, said, "Our business in Shenzhen has increased substantially after the crackdown and more and more merchants want to do business through official channels. Clearly, more and more companies want the official value-added tax (VAT) invoices now."

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