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Cloudy Prospects Sees Jewellery Sector Struggle to Find Silver Lining

For many exhibitors at this year's China International Gold Jewellery and Gem Fair in Shanghai, business has been down over recent years, with many ascribing this to changing preferences on the part of ever-fickle mainland consumers.

Photo: Jaded: An apt description of exhibits and exhibitors at Shanghai jewellery expo. (Shutterstock.com)
Jaded: An apt description of exhibits and exhibitors at Shanghai jewellery expo.
Photo: Jaded: An apt description of exhibits and exhibitors at Shanghai jewellery expo. (Shutterstock.com)
Jaded: An apt description of exhibits and exhibitors at Shanghai jewellery expo.

For many at the recent China International Gold Jewellery and Gem Fair in Shanghai, the mediocre attendance and the scarcity of big buyers reflected the currently becalmed status of the market. Indeed, over recent years, jewellery sales across the mainland have plateaued, while investors have also switched from buying gold jewellery to stashing away gold bars.

For D. Miliaus Uki, a Lithuanian amber jewellery supplier attending the event for the fourth time, it was clearly a case of diminishing returns. Lamenting the current state of the market, Danius Miliaus, the Proprietor of the business, said: "Every year it is getting worse, maybe because of the current economic situation in China.

"Although Chinese tourists buy quite a lot of amber when they visit Europe, within China demand is relatively low. For us, the shows in Poland and Germany are much better. Many of those events are dedicated solely to amber and the attendees tend to buy much larger quantities."

Finding business similarly lacklustre was another overseas supplier specialising in an exotic mineral particularly prized in China – Myanmar Ali Jade, perhaps unsurprisingly, a Myanmar-based purveyor of jade, a precious stone that many mainlanders are said to value above gold. According to the eponymous Ali, the Founder of the business, the finest jadeite in the world comes from the north of Myanmar, with the state of Kachin particularly renowned for the quality of its deposits.

The company has been supplying jade to China for more than 20 years. As a sign of its long association with the country, as well as its base in Northern Myanmar, it also maintains a retail presence in Yunnan, the south-western Chinese province that borders Myanmar.

Explaining his presence in Shanghai, Ali said: "This year, I am really here to look for wholesalers. We attend all the major jewellery shows, including the recent Beijing event [the Winter edition of the China International Jewellery Fair], which tends to be bigger and better.

"At this show, business has not been quite so good as at the Beijing event. It is about the same as last year, though that was notably down on previous years."

Another overseas regular at the event was Ammolite World, a Canadian wholesaler of ammolite, an opal-like gemstone found mainly in North America. According to the company’s Sales Representative, who has been attending the show since 2010, the event has declined noticeably over recent years.

Summarising the change, she said: "It's slow again this year and it was on the last two occasions I was here. By contrast, the Hong Kong show [The Hong Kong International Diamond, Gem and Pearl Show] is much better.

"We are one of the three largest suppliers of ammolite, the national stone of Canada. It’s relatively cheap, yet has good investment potential and, according to one Hong Kong master, it has the best feng shui in the world."

For its part, Sri Lanka, a major exporter of gemstones, had assembled its exhibitors within one national pavilion, including Colombo-headquartered Gem Paradise. In addition to its base in the Sri Lankan capital, the company, which has been participating in the show since 2013, also has a retail presence in Beijing. It specialises in the sale of sapphires, regularly having prime examples on offer from Sri Lanka and Madagascar.

According to A.H.M. Imtizam, the company’s President, many of the event’s problems – particularly its low attendance – stem from poor organisation. Making his dismay clear, he said: "Sales at the weekend were nil. This was because many buyers didn’t know about the show. It needs better promotion.

"Looking at the broader picture, while China has traditionally been a very good market for luxury products, these days there is a lot of government pressure on people to cut down their spending in the sector. As a vendor, you also have to treat each province almost as if it's a distinct country, with its own unique tastes and dynamics.

Photo: Ammolite: Canada’s national stone apparently.
Ammolite: Canada's national stone apparently.
Photo: Ammolite: Canada’s national stone apparently.
Ammolite: Canada's national stone apparently.
Photo: Amber: Buyers not quite ready to go.
Amber: Buyers not quite ready to go.
Photo: Amber: Buyers not quite ready to go.
Amber: Buyers not quite ready to go.

"Of all the mainland events, the Kunming International Jewellery Exhibition is the best organised, particularly with regard to publicity. It is run by Yunnan’s provincial government and is always very busy. It is advertised on TV and attracts buyers and sellers from across Southeast Asia."

As well as a degree of dissatisfaction among the overseas exhibitors, many of the domestic participants were no more enamoured, including Mylove Jewellery. Based in Yiwu, a city in the central China Zhejiang province, the company has been trading for 20 years, but was making its first appearance at the Shanghai event. It primarily manufactures silver and copper items for the fashion-jewellery market.

Commenting on event and the current state of the market, Sales Representative Chen Hanlin said: "We usually attend the Hong Kong event, where we tend to do better than we have here. We primarily manufacture for the export markets, working on an OEM basis as well as trading under our own brand.

"By and large, I think things are looking up overall. We tend to focus on the high-end of the market and have reasons to believe that that sector is, once again, beginning to grow."

For Carino Jewellery, a newly launched Guangzhou-based business, its presence in Shanghai marked its first appearance at any trade event. It was particularly looking to promote its new Zodiac collection, while also hoping to appeal to overseas buyers.

Outlining the company’s focus, Michael Nicastro, its Head Designer, said: "We’re trying to update traditional gold and silver designs, looking to create something elegant, yet modern and fashionable. While we have found that this show is quite Shanghai-focused, we have still signed up a couple of distributors. A lot of the other people who are here, though, seem to have come just to buy individual items, with comparatively few commercial buyers in attendance."

Representing the increasingly significant e-commerce sector of the jewellery business was Yanzi Zai Liba, which primarily sells through its online store on the Taobao portal. Explaining why he had temporarily abandoned virtual trading to put in a personal appearance at the event, Ling Xiao, the Proprietor of the business, said: "I have been selling mainly British and US sterling-silver antique items online for 11 years now.

"Over the past two years, though, trading hasn’t been quite so good, so I was recommended to come and give it a try here. As I have picked up several customers, it has clearly been worthwhile."

In addition to vendors offering jewellery items and precious stones, the event also attracted many of the leading players in the jewellery manufacturing equipment sector, including Shenzhen-based Sunlin, a 10-year veteran of the event. At present, the company, which has a 30-year history producing HAD-branded precision jewellery instruments, including scales, testers and drilling machines, is finding that it is increasingly supplying production facilities outside the mainland, with much of the business once conducted in China now relocated elsewhere in Asia.

Highlighting the company’s current focus, Marketing Manager Stephen Chen said: "Basically, we have customers all over the world. Of late, Thailand and Vietnam have become key markets for us, largely because they have both benefitted from moves to shift production facilities out of China. As a result, Hong Kong is probably the best show for us as it is the most international.

"This year, we are primarily focusing on promoting our new range of 3D printers, all of which have been optimised for jewellery production. While demand for them at the moment is not great, I believe they will be huge sellers in the future."

Perhaps one of the more unexpected exhibitors at the show was Yintai Pawn, a Shanghai-based chain of state-owned pawnbrokers. According to Cui Liyan, one of the enterprise’s Department Managers, the company was attending in order to build awareness of its range of extended services, particularly the fact that, in addition to its role as a money lender, it also sells jewellery on behalf of third parties.

Expanding upon this, Cui said: "The Pawn Association – our national body – asked us to attend. Normally, we just sit in our shops waiting to be approached by customers, so most people don’t know about our full range of services."

Judging by the lack of optimism on show from several exhibitors, setting up at the expo may have been a canny move on the part of Yintai. Indeed, more than one cash-strapped jewellery brand may have called upon its services before the fair ended its four-day run.

Photo: The China International Gold Jewellery and Gem Fair 2017: Making the best of a becalmed market.
The China International Gold Jewellery and Gem Fair 2017: Making the best of a becalmed market.
Photo: The China International Gold Jewellery and Gem Fair 2017: Making the best of a becalmed market.
The China International Gold Jewellery and Gem Fair 2017: Making the best of a becalmed market.

The China International Gold Jewellery and Gem Fair took place from 17-20 November at the Shanghai World Expo Exhibition and Convention Center.

Chen Rong, Special Correspondent, Shanghai

Content provided by Picture: HKTDC Research
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