RAPAPORT... Following its aggressive marketing in 2009 to counter the effects of the business decline in the recession, the Israel Diamond Institute Group of Companies (IDI) has overhauled its outreach efforts, scaling back or eliminating some of the more costly services while expanding member training and show participation.
“The idea is that coming out of the crisis, we wanted to make clear that the market has changed and is not as it was before,” explained Nissim Palomo, IDI’s chief marketing officer, who took office in November 2009. “This year, it was important that everyone in the industry be restrained and responsible in their businesses, be it the banks, the producers, manufacturers or retailers.”
The 2010 “Responsibility is Good Business” program encourages responsible industry approaches to marketing, manufacturing, customer services and credit strategies. Palomo said that the design of the 2009 “Together Works” campaign reflected the fact that the devastating business economic environment required a more direct and proactive approach, which came at a substantial financial investment. He added that this outreach was never intended to continue on the same scale once the crisis had passed.
Discontinued Services
Among the IDI programs discontinued for 2010 is the hospitality service offering three nights of free accommodation to foreign buyers visiting the bourse trading floor. IDI hosted 490 such hotel nights in 2009. The organization also is stopping its YouTube initiative, under which it created promotional videos for 65 companies. At the same time, IDI is maintaining its presence on other social media outlets such as Facebook, Twitter and LinkedIn.
Although IDI is currently publishing both hard copy and electronic versions of its magazine Reflections, it is discontinuing hard copy publication so that the content eventually will be available solely online. Introduced in the spring of 2009 as a stand-alone sales tool, 50,000 copies of Reflections were printed for distribution by U.S. retailers to their customers. In addition, other IDI news services, such as writing press releases for members, are being discontinued.
Focused Projects
Meanwhile, educational seminars have been expanded. IDI has scheduled ten seminars in 2010 designed to help members use the internet effectively in their businesses, compared with seven seminars in 2009. The course focuses on how to use the web to buy diamonds and promote one’s business through social media and other means. IDI also has continued its services advising companies how to build a website, which more than 30 businesses are expected to use by the end of 2010.
Most significantly, IDI is placing more emphasis on its call center in Asia, which initiates contact with diamond buyers there to upload their requirements onto the IDI portal. The call center this year extended its English service to Mandarin and Cantonese.
Growth Markets
Other new and expanded marketing initiatives reflect Israel’s determination to capture its share of the fast-growing diamond markets in the Far East and especially India. India has emerged as Israel’s fastest-growing market in 2010, with polished exports to India increasing 155 percent to $115.3 million in the first six months.
There was also strong demand by Israeli companies interested in attending the India International Jewellery Show (IIJS) in August but show organizers had allocated space for just seven Israeli companies. As a result, IDI has sought other avenues to penetrate the Indian market, attending the Gem and Jewellery India International Exhibition in Chennai for the first time in January 2010 and conducting a survey of the South India market for its members.
To encourage further growth in trade with the Far East, IDI is spending more time at Hong Kong shows. Already, it has a waiting list for the March Hong Kong fair, while 71 companies participated in the IDI pavilion in the city in September. It is planning to host a pavilion at the June Hong Kong show for the first time in 2011.
Palomo stressed that these projects are part of IDI’s mandate to facilitate the Israeli market and build on the momentum created so far in 2010, with polished exports up 76 percent to $3.81 billion between January and August. “We try to identify trends before diamantaires, whether it is in how to do business — such as we saw with the internet seminars — or identifying new markets to trade in,” he said. “That way we can pave the way for them to capitalize on market trends.”
Despite faster growth in these other markets, however, the U.S. remains Israel’s dominant market. Gross polished exports to the U.S. accounted for 52 percent of Israel’s total exports in the first half of 2010, while exports to Hong Kong made up 25 percent.
The Marketplace
• Local trading is quiet due to the Jewish holidays and the fact that businesses were focused on the Hong Kong show.
• Feedback from the Hong Kong show is mixed, due to lower-than-expected attendance and price resistance from buyers.
• Demand in Asia for clean goods of VS1+ is softening.
• Polished and rough prices are stable, while costs remain high.
• Demand is good for VS-SI goods.
• There are encouraging signs that the U.S. jewelry retail environment is improving, although caution remains in Ramat Gan that another downturn may be looming.
Article from the Rapaport Magazine - October 2010. To subscribe click here.