Jewelry Month

RAPAPORT... In September, the mass of jewelry items brought to the capital from throughout the country for the two major exhibitions of the year seemed to outshine the glitter of Moscow’s golden church domes.

Junwex Moscow opened its doors September 1 and Yuvelir 2008 three days later. The overlapping timing of the two made it more convenient for shop owners to see what was on offer in a short spell of time. On the other hand, it put additional strain on the jewelry makers, as they either had to cash out for a place at both shows or choose only one show, knowing they would miss out on some of the buyers.

The types of buyers at each show were defined by the location. Yuvelir 2008, located at the Sokolniki exhibition facilities in northeast Moscow, was all about wholesalers. “More people come here than to Gostiny Dvor — the Junwex site — and they have the intention to buy,” said Artem Ivanov, director of Danila Master, a four-year-old company engaged in mass production of low- to medium-price jewelry.

Meanwhile, jewelers at Junwex Moscow, whose Gostiny Dvor location is next to the city’s Red Square, were counting on individual buyers, who would pop in while walking around the capital’s historic center. That’s why exclusive and one-of-a-kind pieces had the spotlight, although companies also displayed some of their mass-production jewelry. “People want something extraordinary, be it design or just an unusual latch,” said Sergey Levkin, marketing director of ART LLEU, a small St. Petersburg-based company.

Foreign Expansion

Jewelers said that they feel more competition coming from abroad with foreign companies expanding their presence at the shows. This year’s Junwex had a separate section given to more than a dozen Hong Kong companies. “Our markets are down, but the money is here,” said B.K. Panchariya, director of Kris Diam. “The financial crisis has not influenced jewelry sales in Russia,” said Igor Titov, deputy director general of Russian Diamond House, a Moscow-based manufacturer and jewelry maker.

The price range showed what jewelers were counting on. Although items costing less than $1,000 were still the top seller, the second-biggest group was $3,000 to $5,000. Most of the companies presented several items priced around $10,000 and some put out necklaces and rings costing more than half a million dollars.

Yuvelir 2008 was the 50th annual exhibition of that show to be held in Sokolniki, which hosted jewelers even back in the Soviet days. “Being here is the sign that the brand exists,” said Aleksandr Andrushkevich from Juwelland Holding, a St. Petersburg–based retailer that sells both Russian and foreign jewelry. Yet, many participants note that more should be done to attract ordinary customers. “We’d like to see more advertisement of the event so that not only professionals would come here,” said Dmitry Kuntsev, marketing director of Kristall Smolensk.

Show Competition

The competition among exhibitions will be even tougher in 2009 because a big, new player is coming to town. Russia’s Jewellers Guild has signed a five-year contract with Crocus Expo, the company that runs the capital’s largest exhibition facilities. Its 6.4-million-square-foot premises outside Moscow host the majority of the city’s trade shows, including the lavish Millionaire Fair. The first Crocus Expo jewelry show is scheduled for early September. Jewelers have long been waiting to go to Crocus as it offers the most modern and the biggest show facilities in the capital. Yet, the concern is that it will take several years for people to get used to going to a new place.

Diamond Demand

Many more individual diamonds were put on display at the September exhibitions than in previous years. Companies say 0.5 to 3 carats are among the favorites with individual buyers, while jewelers also purchase many small stones of less than 0.3 carats. “People want good clarity and color, although there are a number who would sacrifice those characteristics for a bigger size and smaller price,” said Andrew Selin, senior specialist of Zvezdochka, which manufactures diamonds in the Arkhangelsk region in the north of Russia.

Russians also are developing a taste for fancy colors, although the amounts purchased are still small, compared to white stones. Kristall Smolensk said almost all its orange and pink colored diamonds sold at Yuvelir, but the demand for brown and yellow was not strong. “Every exhibition we try to bring something unusual to show people all the diversity of diamonds,” said Kuntsev.

Metal Consumption Up

Russian jewelers consumed 8.6 percent more gold and 17 percent more silver in the first half of 2008 against the same period the previous year, according to the Russian Assay Chamber. The chamber also registered 23.33 million gold jewelry items since the beginning of the year and 19.91 million silver items.

The Marketplace
• Russia’s rough exports in the first half of 2008 totaled 14 million carats worth $955 million.
• The export breakdown is as follows:European Union (EU), 10.4 million carats worth $711 million; Belgium, 8.2 million carats worth $530 million; Britain, 2.1 million carats worth $181 million; Israel, 1.03 million carats worth $122 million and India, 1.6 million carats worth $47.5 million.
• Russia’s rough imports in the first half of 2008 totaled 73,000 carats worth $18 million. Most of the stones – 10,000 carats worth $14 million — came from Belgium.

Article from the Rapaport Magazine - October 2008. To subscribe click here.