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Diamonds will have the greatest potential in 2017

29 may 2017

rajesh_bhagat_xx3.jpgMumbai-based Rajesh Bhagat, India Consultant of Hong Kong Trade Development Council (HKTDC) who oversees HKTDC’s operations across India, Sri Lanka and Bangladesh, has been assisting companies, particularly small and medium enterprises (SMEs) in the region to promote their goods and services internationally through Hong Kong since June 2009. Bhagat had initiated talks with the India Trade Promotion Organisation (ITPO) which culminated in the signing of a MoU between HKTDC and ITPO. He was also awarded the ‘Best Branch Award 2015’ by HKTDC, the first Consultant of HKTDC to receive this honour.

Rajesh Bhagat is a qualified Chartered Accountant and a graduate in Commerce and Economics from the University of Mumbai. He has been awarded the ‘Commendable Service Award’ by the Western India Regional Council (WIRC) of the Institute of Chartered Accountants of India (ICAI).

An entrepreneur in his own right, Rajesh Bhagat is the Managing Director of Worldex India Exhibition & Promotion Pvt. Ltd., a company dedicated to organising international B2B trade shows in India. Another vertical of his company also publishes various professional magazines and books for tax professionals, chartered accountants, solicitors & advocates, finance professionals and trade bodies.

Worldex India has been co-operating with The China Council for the Promotion of International Trade (CCPIT) in India for the last 12 years for organising the China Products Fair in India. Worldex India has also been representing the Taiwan Textile Federation in India and South Asia since 2009.

Here, in an interview with Rough&Polished, Rajesh Bhagat speaks about the recently concluded Hong Kong Jewellery Shows; and also gives an insight into the general demand pattern of polished diamonds at the Shows.

Excerpts :

What was the scene at this year's HKTDC's twin jewellery shows? Given the current global slowdown, was it up to expectations in terms of participants and visitors?

The two shows attracted over 85,000 buyers from 144 countries and regions, up 6 per cent over last year. More than 33,000 buyers visited the Diamond, Gem & Pearl Show, while some 52,000 visitors attended the Jewellery Show.

Despite economic challenges, especially in the luxury goods market, the two shows attracted a record number of buyers. The exhibitors are also generally satisfied with the results at the two shows. This demonstrates that the jewellery industry remains confident about business prospects this year, reinforcing Hong Kong’s position as a proven global promotion and sourcing hub for the industry, as well as the success of our ‘two shows, two venues’ format. Analysing the buyer statistics this year, we can see that buyer attendance from emerging markets recorded a considerable increase, such as the Chinese mainland as well as Malaysia and the Philippines from ASEAN and Russia, Turkey and Iran on the Belt and Road. The double-digit percentage increase of buyer attendance in these regions reflects their market potential.

Imran Khan, CEO of Sparkle Gems exhibiting at the Diamond, Gem & Pearl Show, said that they completed a number of orders during the show period, including an order of more than US$2 million worth of tanzanite by a Chinese mainland buyer. He said that the demand for tanzanite and emerald is strong, especially for buyers from the mainland and across Asia.

MKS Jewelry International Co., Ltd. from Thailand is also a long-time exhibitor at the Jewellery Show. Farhan M. Baqri, Sales Manager of the Company, said that their products attracted many buyers from Europe, Middle East, South Africa and the United States, and 10 buyers placed orders on the spot on the first two days of the show.

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What sizes, colour, quality of polished diamonds move well during Shows in Hong Kong generally? In the recent Show, what stones and in which category were in high demand?

The HKTDC commissioned an independent onsite survey during the Hong Kong International Diamond, Gem & Pearl Show and the Hong Kong International Jewellery Show, interviewing more than 1,300 buyers and exhibitors about their views on market prospects and product trends. The survey indicates that 41 per cent of the respondents believe diamonds will have the greatest potential in 2017, the highest among gemstones. This is followed by aquamarine (14%) and emerald (13%).

For product materials, 43 per cent of the respondents expect karat white gold to be in greatest demand this year, followed by karat rose gold (33%) and karat yellow gold (23%). Meanwhile, 19 per cent of the respondents favour pure gold and 10 per cent of them prefer platinum.

As to polished diamonds, solitaire (40%) is the favourite among respondents, followed by solitaire/melee (33%). Prong (27%) is still the most popular setting, and the most popular design for solitaire diamonds is 1 carat, D – J colorless, ideal/perfect cut and VVS/VS clarity.

What's the scene with coloured diamonds as of today in Hong Kong in terms of demand for these stones which are looked upon as a good investment vehicle?

Investors are increasingly eyeing on the rarity of coloured diamonds and see these gems as an alternative investment instrument. The hot demand is reflected in record auction prices in Geneva in 2016, including a 14.62-carat blue diamond sold for US$57.5 million in May – the most expensive gem ever sold at auction – and another 12.03-carat Blue Moon sold for nearly US$50 million in November, making it the only diamond sold for more than US$4 million per carat.

Statistics from the Fancy Color Research Foundation (FCRF) show that the prices of blue diamonds were driven to an all-time peak in 2016. Demand for highly saturated yellow rough diamonds, especially vivids, was also reported to have improved, resulting in high prices in tenders.

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How has India performed of late at the HKTDC organised twin jewellery Shows? Now, with US showing signs of a turnaround, do you think Indians saw success in the shows? Your views, please.

Exhibitors and buyers from India were found to have benefitted from and made deals at our global jewellery marketplace.

At the Diamond, Gem & Pearl Show, Gemetrix Pty Ltd which sources loose diamonds in Australia met new suppliers from India and negotiated orders worth around US$500,000.

Another loose diamonds buyer Thein Than Yadana Gems and Jewellery from Myanmar was also in touch with exhibitors from India for a selection of diamonds in different sizes, and would place orders worth up to US$100,000.

Buyers from India also purchased the premium natural pearls they liked from Shanghai Gems SA from Switzerland on the first day.

What is the current trade scenario between Hong Kong and India, in terms of finished goods, especially studded jewellery as well as plain gold?

India was the second-largest supplier of fine jewellery to Hong Kong in 2016. The exports value to Hong Kong reached US$2.7 billion, which saw an impressive increase of 27.1 per cent year on year, and more than doubled the value in 2013. Fine jewellery imports from Hong Kong valued at US$79 million.

As customer preferences differ a great deal, in which area should Indian jewellery manufacturers focus on or improve to increase their competitiveness when catering to overseas markets?

Most of the respondents are optimistic about the Chinese mainland market (63%), followed by the North American market (54%) and Western Europe market (52%).

In Hong Kong and the Chinese mainland, jewellery demand is expected to remain active. Among other things, according to the Chinese lunar calendar, this year of the rooster has a double spring with a leap month which is believed to be auspicious for marriage, and should encourage the demand for jewellery. Domestic demand for jewellery in the mainland is also expected to remain high despite projections of slower economic growth. At this year’s shows, 58 per cent of the respondents are optimistic about the prospects of jewellery for weddings and special occasions. It is thus advisable for jewellers to leverage on these jewellery types to stay ahead of the competition.

Jewellery demand in the United States is significant. According to Rapaport Group, the diamond and jewellery trade there will benefit from tax reduction measures and economic boosts under the Trump administration.

With India as one of the biggest consumer markets for jewellery, the demand for gold is projected to be on the rise as the country’s economy keeps growing. Domestic demand for gold jewellery therefore has a high potential as well.

As far as product categories are concerned, apart from the aforementioned wedding jewellery, survey respondents are mostly optimistic about the prospects of trendy fashion jewellery (72%), precious jewellery (58%) as well as collectible investment items (46%).

In terms of price range, 54 per cent of the respondents expect products priced from US$101-US$500 to have the greatest potential this year, followed by products in the US$501-US$1,000 (51%) price range.

Can you run us through briefly about the Shows; and the special events that are being organised simultaneously? An award event is to be held as well. Please elaborate on these events.

The 34th Hong Kong International Jewellery Show showcased a wide range of finished fine jewellery, including top-tier jewellery pieces, famous brands, new designer collections, as well as collectable jewellery art pieces and antique jewellery, while the concurrent fourth edition of the Hong Kong International Diamond, Gem & Pearl Show featured various raw jewellery materials. Both shows altogether attracted about 4,480 exhibitors from 53 countries and regions, forming the world’s largest jewellery marketplace.

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We arranged more than 30 exciting events during both shows for industry players to gather the latest market intelligence and expand their business networks. The biennial International Jewellery Design Excellence Award (IJDE) returned this year to recognise outstanding jewellery designers and facilitate information exchange in design, professionalism and craftsmanship. The competition received 165 submissions from winners of various jewellery design competitions from 27 countries and regions. Japanese designer Natsumi Odate won the highest honour “Champion of the Champions” with her necklace “Rhythm”, which is made using 3D technology.

We also jointly organised the 18th Hong Kong Jewellery Design Competition with Hong Kong Jewellers’ & Goldsmiths’ Association, Hong Kong Jewellery & Jade Manufacturers Association, Hong Kong Jewelry Manufacturers' Association and Diamond Federation of Hong Kong, China. This year, the design theme is “Follow Your Heart”, and a total of 260 entries were received. Three “Best of Show Awards” and a “Craftsmanship & Technology Award” were presented for the Open Group, and three prizes for the Student Group were awarded.

On 28 Feb at the Diamond, Gem & Pearl Show, the International Institute of Diamond Grading and Research (IIDGR) De Beers launched their diamond detection instrument. On 4 Mar at the Jewellery Show, Paola De Luca, Creative Director & Forecaster of TRENDVISION Jewellery + Forecasting, revealed upcoming mega trends in jewellery design. Other featured events included buyer forums on opportunities in mature markets and countries along the Belt and Road Initiative, jewellery craftsmanship demonstration, various jewellery parades and networking sessions.

Aruna Gaitonde, Editor-in-Chief of Asian Bureau, Rough & Polished

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