12 March 2007
Shining In The Middle East(HKTDC Enterprise, Vol 03,2007)
The Middle East is rapidly emerging as one of the fastest-growing markets for Hong Kong precious jewellery manufacturers, who stole the limelight at the recent Dubai Watch and Jewellery Show.
Niche and well-designed pieces from the world's fourth-largest exporter of precious jewellery were firm favourites of show visitors, most of whom anticipated an increasing regional appetite in the Middle East for diamond jewellery in particular and the luxury goods sector in general.
Leading industry observers such as Dubai Gold & Jewellery Group (DGJG) managing director Tawhid Abdullah predicted the regional luxury goods sector would be worth US$100bn by 2010, of which US$8bn will come from high-end watches and jewellery.
Sales of luxury watches in the UAE hit an estimated US$500m in 2006, with around US$1bn worth of sales a year coming over the next four years, said Abdullah.
However, it is diamond jewellery that is proving most popular thanks to innovations such as the Dubai launch of the Diamond Trading Co's (DTC) 2007 Rayana programme, which includes sets comprising a ring, necklace, bracelet and earrings, as well as a pair of men's cufflinks.
"Diamond jewellery sets are particularly important to the region," said DTC Gulf Markets marketing director Jonathan Chippindale. "In addition to being unique to the Arab world, sets represent a 55% value share of all diamond jewellery sales [there] and, at an average price of US$6,000 per diamond jewellery set, [they] signify an important growth area for the Gulf market."
DTC, the sales and marketing arm of the De Beers Group, officially announced that the Forevermark is expected to be rolled out in the Gulf in the third quarter of 2007.
Diamonds which are 0.30 carats and above are eligible for the Forevermark and every stone is carefully examined by a diamond expert before being inscribed with the mark, using highly advanced DTC technology.
The actual size of the mark is only 1/20th of a micron deep (a mere 1/500th of the thickness of a human hair) and can be seen with the Forevermark viewer, according to DTC. "Demand for the Forevermark in the pilot market of Hong Kong during the past 18 months has been impressive," Chippindale observed.
Antwerp polished diamond supplier Rosy Blue FZE has also seen an upward trend in the region's demand for diamonds in recent years, making the UAE one of the largest trading centres for rough diamonds, and the Gulf Cooperation Council region the third-largest consumer of diamond jewellery in the world.
Quoting figures from the Dubai Chamber of Commerce and Industry, the company said "in 2005 the value for trade in diamonds was US$6.86bn - an increase of 72% from the year before."
Rosy Blue CEO Sanjay Dalmia noted that the company has a direct presence in some 15 countries and global sales of loose diamonds worth US$1.7bn in 2005. "Out of this US$200m was sold in the GCC region and the UAE sales were worth US$40m,' said Dalmia.
As if that wasn't enough good news for Hong Kong jewellery manufacturers, the DGJG estimates that up to 95% of visitors currently purchase gold and jewels during their stay in Dubai.
This immense market potential is already being tapped by Hong Kong companies such as Ariana, which currently makes 25% of its sales in the Middle East and seeks to raise this to one-third of its turnover.
Managing director Dhaval Shah anticipated 20%-30% growth in the Middle East market. "Hong Kong is known for fashionable producers, high workmanship and products that reflect latest trends in design," he noted.
Shah observed that, unlike other regions, buyers in the Middle East made multiple purchases in a year and bought pieces priced between US$200-10,000, without any constraint.
"This is because of the region's young population and growing income following the sizzling economic growth experienced over the past several years," he explained. "This is specially so in Dubai - we come to this exhibition because we recognise Dubai's hub status."
Most of the participants were clearly looking to make a mark in a regional market that saw diamond jewellery sales alone touch US$2bn in the past year.
Their optimism is well-placed judging by industry indicators. "Dubai's strong retail dominance in the Arab world, along with its central location as the gateway to the Middle East, will allow it to become a global centre for diamond trading," claimed Dubai Diamond Exchange CEO Noora Jamsheer.
Additionally, gold jewellery, which makes up most of the traditional market in Dubai, has also shown a marked improvement despite higher gold prices.
The World Gold Council's regional office in Dubai announced that global retail gold sales increased by 41% in the third quarter of 2006, compared with the same period in 2005.
Sales in the UAE increased from US$381m in the third quarter of 2005 to US$545m in the third quarter of 2006, clearly offering plenty of potential for Hong Kong jewellery designers, manufacturers and buyers.
WRITTEN BY CLARENCE MICHAEL