RAPAPORT... Market activity has definitely slowed as the summer lull begins. The last push for the season is the Hong Kong Jewellery & Watch Fair, held June 21 to 24.
The fair has grown considerably from its start 20 years ago and now occupies the entire new wing of the Hong Kong Convention and Exhibition Centre. There were 1,130 exhibitors from 30 countries this year, which represents a 7.5 percent increase from 2006.
The exhibition center is now undergoing construction work to expand the facility, which has effectively cut all the access bridges between the old and new wings. But the new passageway provided as a connection on the lower floor was beautifully done, so visitors at this show were not aware of the construction work underway.
It will be slightly inconvenient for buyers who visit shows that employ both wings for the next two years, but after that, the center will be able to accommodate an additional 1,000 booths, which is welcome news for those waiting for space. The waiting list is long and, with the success of the Hong Kong jewelry shows in recent years, demand for space is expected to remain high.
New Diamond Hall
The diamond trade’s dreams of a hall of its own are now becoming a reality. The first step occurred in 2006 when the Hong Kong Trade Development Council created a separate Diamond Hall in its March show. The new hall was well received. Buyers and exhibitors were pleased by the increase in traffic and, naturally, the increase in sales.
For the June 2007 show, organizers followed that example and designated Hall 3, not the best location in the convention center, as a Diamond Hall. It, too, proved a success, as it produced a marked increase in the traffic flow of diamond buyers.
The proof of the pudding will be during the upcoming Jewellery & Watch Fair in September, when the Diamond Hall will be located in the former car parking area in the basement of the new wing. If it succeeds there, it will succeed anywhere.
The drawing power of the diamond industry, especially when the leading diamond companies are grouped into one hall, proves that as shows grow in size, it is logical to group exhibitors together by products. It is definitely easier on the buyers who don’t have to waste time moving between halls, and who are more relaxed in getting down to what they are meant to do during a show — buying.
India Dominates
Indian buyers again dominated the market, and came in droves. Generally, they are aggressive buyers, who do not waste time shopping around during the first days of a show. They get down to business quickly, know what they want and what they are prepared to pay.
They also have a tendency to cooperate with other Indian buyers, with whom they exchange information freely. You can see them huddled together during the show, and very quickly they get to know the best booths to visit and the prices being asked for special stones.
The Indian attendees’ aggressive buying reflects the huge market demand in India. Most of the demand is for large stones in better clarities. Colors range from D to L through M colors, in rounds and fancy cuts. Some of the orders were very specific, such as a 30-carat stone for someone celebrating a 30th wedding anniversary, and an 18-carat stone for a lucky 18-year-old girl for her birthday.
This year, however, there was a struggle over prices, especially after the news of the increase in rough prices. But in reality, the increase in the rough prices merely reflects the mopping up of premiums paid for rough in recent months, not necessarily a further increase in prices.
The Hong Kong show was similar to the JCK show in Las Vegas in reporting mixed results. Overall, activity was good but sale results were mediocre. Some exhibitors did very well, while others were disappointed.
It goes to prove that companies have to pay their dues over years of exhibiting, as buyers tend to go back to those they bought from in the past and whose goods enabled them to have positive results with their customers. It is important for companies to feel comfortable with their suppliers, not only for prices but for having the right merchandise for them when they need it during the course of the year.
There were some visitors to the fair interested only in goods with triple EX grading, and they were having a very difficult time finding merchandise. One of the main complaints is that some of the triple EX diamonds now do not have hearts and arrows, which is what consumers expect when buying the best-cut diamonds.
The Marketplace• The magic number is 5 — any diamond larger than 5 carats is always in demand.
• Demand is slow for 2- and 3-carat stones.
• Demand is normal for 1-carat sizes.
• 50 points and larger are moving well, while 30- to 40-pointers are weaker.
• Quality preferences are D-E in VS/SI, G-J in VVS/VS and K-M in VVS.
Article from the Rapaport Magazine - July 2007. To subscribe click here.