The Hong Kong Jewellery & Gem Fair, the world’s largest jewellery fair, might have attracted half its usual number of visitors and buyers of diamonds, as well as fewer exhibitors, who brought half their usual offering to the event, in a climate blighted by poor sales, the US-China trade war and the Hong Kong protests, according to a regular attendee.
The fair was held on September 16-22. “This year, overall activity at the exhibition was lower than usual. Among the large industry players, few did not participate. But those who arrived, brought in 40 per cent to 50 per cent less products than usual,” Evgeny Agureev, director of sales at Mirny, East Siberia-based state-backed company Alrosa said in an interview.
“According to our observation, the number of visitors to the exhibition and buyers of diamonds was half the usual,” he said, adding that attendance was hit by an unfavourable environment for the diamond industry, the protracted US-China trade war and the anti-government protests in Hong Kong.
Hong Kong Jewellery & Gem Fair remains the “ultimate meeting place for the global jewellery industry”, David Bondi, senior vice-president – Asia at Informa Markets, which organises the event, said in an emailed statement.
“What’s happening in Hong Kong now and the uncertainties in the global economy are affecting us in a certain way.
“Visitor turnout was down, but traffic quality was up. We did receive positive compliments from exhibitors and high-quality visitors, who engaged in serious trading at the show,” he said.
Visitor numbers from China saw the biggest drop compared with last year while Japan, Israel and some markets recorded an increase in buyer turnout. Professional buyers also made the most out of their trip by spending more time at the show compared with previous editions, Bondi said.
Informa Markets did not provide attendance numbers for this year’s event. The fair attracted just over 3,700 exhibitors and 54,000 visitors to two of Hong Kong’s largest convention facilities in Wan Chai and near the airport last year.
Alrosa is the world’s largest producer of rough diamonds. “This year – as we did previously – we brought a collection of our [natural] coloured diamonds for auction,” Agureev said. “We enjoyed stable interest towards our auctions.”
He said industry sales had hit a low point for the year in July and stabilised somewhat in August and this month. This had given Alrosa hope that its strategy of cutting raw diamond supply would help to restore the supply-demand balance by year-end.
The company saw its sales value fall between 35 per cent and 40 per cent in the year’s first eight months over the same period in 2018, although sales to China were down by just over 15 per cent.
Some exhibitors were pleased with the response they received this year. “Due to current economic conditions, people have a smaller list of requirements, but they are still buying. Smaller good quality rubies and sapphires are moving well,” said Kaimesh Sukhadia of Thailand’s Sukhadia Stones.
South Africa-based industry giant De Beers cut its full-year production target to 31 million carats in July from a previous range of 31-33 million carats, after reporting a 17 per cent year-on-year decline in second-quarter revenue for this year.
The Diamond Producers Association, which is backed by seven miners that control 75 per cent of the global rough diamond supply, however, said the stone had big potential in China.
Chinese diamond purchases grew 4 per cent by value – higher than gold’s 2 per cent – last year, said Mabel Wong McCormick, managing director for Greater China at the association, citing data from the Kantar Diamond Consumer Usage & Attitude Study.
Sellers have only reached 16 per cent of potential buyers in China, the world’s second-largest diamond market after the US, compared with 32 per cent by other luxury products, she said citing data from consultancy Bain & Company.
Consumers in their 20s and 30s, who make up two-thirds of the diamond industry’s targeted market, put less emphasis on the size of stones than the previous generation, she said. “The volumes count too – it’s not just big [stones],” McCormick said.
Elisa Li, a public relations executive in her twenties, agreed. “Of course, girls like big and shiny diamonds. But with a limited budget, we can only spend a few thousand to may be 10,000 yuan [US$1,405] on a piece of jewellery … my preference is trendy brands and elegant designs rather than size,” she said.
Additional reporting by Pearl Liu
More from South China Morning Post:
- Russia’s Alrosa to trade in euros with Chow Sang Sang as world’s biggest miner of rough diamonds braces for a tough year in China
- De Beers fights lab-grown diamonds with technology as China’s synthetic gems threaten viability of their market