Jewelry Industry Officials Discuss Change At Hong Kong Jewelry Fair

As the expression goes, change is the only constant in life and the jewelry industry is going through monumental change. Some of it even hits close to home. This was the dominant theme at the September Hong Kong Jewellery & Gem Fair press conference.

The first change is UBM Asia, the largest operator of jewelry trade fairs in the world, has merged with Informa, a London-based company that bills itself as an international business-to-business information services group. 

The second change is that Wolfram Diener, senior VP of UBM Asia and a big presence at the Hong Kong jewelry fairs, will be leaving. After 22 years of living in Hong Kong and China, the German native has accepted a new job as managing director of Messe Düsseldorf. 

Diener, 57, led his last press conference at the Hong Kong jewelry fair calling it his “final curtain” and introducing his replacement, his close friend, David Bondi, who was in attendance. 

In the rest of his presentation he noted that Thailand, with 400 exhibitors of finished jewels, gemstones and supplies, is the largest contingent at the fair, outside of exhibitors from Hong Kong and China. He added there is strong participation from Japan and an increase in exhibitors from Turkey.

Eight leaders of trade associations from Hong Kong and China gave a review of business in the first nine months of the year and what they expect by the end of 2018. Most of the speakers reported strong turnover but also expressed concern due to U.S. and China trade tensions and a strengthening U.S. dollar. 

Lawrence Ma, founding president of the Diamond Federation of Hong Kong, said diamond sales increased by 8.7 percent for the first half of the year. However, he added, that he is “cautiously optimistic when it comes to business at the September Hong Kong jewelry fair. “I expect a good show but not necessarily a great show.”

Ken Lo, chairman of the Hong Kong Jewellery and Jade Manufacturers Association, said his organization saw double digit sales gains for the first half of the year but agreed with Ma that events outside their influence could dampen sales for the rest of the year. “I’m very cautious at the year’s end about what’s going to happen,” he said. 

Most of the other speakers talked about the challenges being posed by Millennial and Generation Y consumers and how they could disrupt jewelry distribution channels in China. 

The press conference itself, an annual event, underwent some change as well. In the past all of the officials sat in front and addressed the media sitting in chairs. This year they added tables and provided lunch for those in attendance. 

Change comes in many forms.

Baselworld Officials Defiant After Losing 200 Exhibitors

Entering Baselworld 2016 on opening day. Photo by Anthony DeMarco

Officials said Wednesday they “turned away” exhibitors at the 2017 edition of Baselworld, set to open tomorrow, as the show is focusing “quality over quantity.” 

“We decided to turn away exhibitors this year. It’s our choice. It’s our choice,” said a defiant Sylvie Ritter managing director of Baselworld, during the annual preopening press conference. The world’s largest watch and jewelry fair opens Thursday and runs till March 30. 

This quality over quantity theme was repeated by the four speakers who took a unified stance against criticism the show has received from many jewelry and watch exhibitors based on price increases, demands to acquire more space and a decline in buyers. The show itself has seen a decline in exhibitors the past few years. 

This stance went to an absurd level when François Thiébaud, president of the Baselworld Swiss Exhibitors Committee, rehashing the decline in Swiss watch exports (9.9 percent year-over-year), said at one point, “We don’t want to produce that many watches we want to produce quality watches.”

This year's fair has a year-over-year decline in exhibitors of 13.3 percent, from 1,500 to 1,300, Ritter said. This follows two consecutive years of 3 percent declines in exhibitors and buyers.

Eric Bertrand, president of the Baselworld Exhibitors’ Committee, leveled the harshest criticism toward those exhibitors who have left or were forced out (depending on who you talk to). 

“In the past I have been surprised by the popularity of certain brands, some quite famous, but really unrelated to our watchmaking industry,” he said. “And when the winds start to blow harshly so does reality become harsh. We have observed that some brands have had to backtrack while those who have always focused on their knowhow are still around.”

He added, “This market consolidation—even in watchmaking, even in jewelry making—will be a benefit to the entire industry the day economic recovery is fully primed. The recovery will afford the best prepared players to gain market share and to be even more successful than ever before.”

After some pointed questions from journalists (a welcomed change) Ritter said the brands that are no longer at Baselworld failed to meet a criteria that she refused to specify. 

“We have turned away exhibitors who are not in line with our concept and do not meet the criteria for Baselworld. We do not publish this (criterion). They differ depending on the product and the markets.”

It seems a bit remarkable at a time when the luxury market has been democratized through digital media, more access to world travel and brands owned by conglomerates looking for endless growth through the mass market, that Baselworld officials seem to be touting a call for old-world exclusivity. 

But really the claim isn’t believable. If it is, they should look at the conglomerate-owned watch and jewelry brands who were willing to pay huge increases for prime real estate in Hall 1.0 and which Baselworld officials were more than happy to accept. These increases spread to the rest of the halls which led to smaller watch and jewelry brands being priced out of the fair. 

In addition, when Baselworld went on this luxury strategy following a renovation a few years ago, the market was led by a boom in China that has largely leveled off. Now with a myriad of geopolitical and economic challenges throughout the world, consumers are not buying like they used to. 

It seems obvious to me the only criteria that matters is money. 

Bertrand singled out fashion watch brands as those who failed to meet this mysterious criteria. 

“The reason is and you must have read about it and know a certain number of brands that are fashion related took watches to get into the industry and they treat it like an accessory … like glasses and spectacles and other components (it) becomes an element (that) adds value to the image but are not related to our industry,” he said. “Now I believe these people did not obtain the results they planned and have given up producing such products.”

One former exhibitor that went public with criticisms of Baselworld and publicly left was the Timex Group Swiss Luxury Division, a division of the Timex Group, which manages the watch business for luxury fashion brands Salvatore Ferragamo, Versace, Versus and Nautica.

Paolo Marai, president and CEO said in a recent Jewelry News Network story, the $3 million investment into the show could be better spent in other areas of its global business. The four brands occupied Hall 1.1, the second floor of the hall dedicated to “global” watch and jewelry brands.

The watches are made in Lugano, Switzerland, in line with "Swiss Made" quality standards. 

Another high profile company that left Baselworld (or didn’t meet the “criteria”) was Bremont, which had the largest space in a separate area for independent watch brands, known as “The Palace.” 

The Palace is no more; instead it is replaced by a new area called, “Les Ateliers,” in Hall 1.2, described by Baselworld as the place for “the most successful” independent watch brands. Bertrand and the others treated the change as an accomplishment rather than a symbol of the fair’s decline, which others have argued. 

Despite the controversies of the past year, Ritter’s defiance was clear with her last statement at the press conference.

“I went through the halls last evening and I can tell you that I slept very well.” 

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Salvatore Ferragamo, Versace, Versus And Nautica To Leave Baselworld

Paolo Marai, president and CEO of Timex Group Swiss Luxury Division

The prestigious Hall 1 of Baselworld may have more empty space than originally planned as four fashion watch brands are the latest to pull out of the 2017 edition of the world’s largest watch and jewelry show.

The Timex Group Swiss Luxury Division—which manages the watch business for luxury brands Salvatore Ferragamo, Versace, Versus and Nautica through licensing agreements—is the latest to announce that it is leaving the annual fair held in Basel, Switzerland. 

Paolo Marai, president and CEO of the division of the Timex Group, in an exclusive interview, said the $3 million investment into the show could be better spent in other areas of its global business. The four brands occupied Hall 1.1, the second floor of the hall dedicated to “global” watch and jewelry brands. 

“I think that Baselworld is a huge investment for everybody and is in my opinion losing some effectiveness,” he said. “It used to be very important in different levels. First, it was a good opportunity to meet journalists but they’re coming less and less to Baselworld. And even those who come are reducing the time they are staying—running from one appointment to the next.”

He continued, “Second, in the past we used to meet a lot of retailers. This year not one single country sent retailers. So what you meet in Baselworld are distributors. But we know the distributors. I don’t need to go to Baselworld for that.”

Baselworld Hall. 1.1 (Photo Courtesy of Baselworld)

Marai says the changing luxury business demands that luxury brands, particularly fashion brands, need to be closer to the consumer. He argues Baselworld isn’t an efficient way to do this.

“Baselworld is becoming more of a place to show off. I’m there because I want to show that I’m at Basel rather than doing something that is really effective toward the end consumer,” said Marai, a native of Milan who now lives in Lugano, Switzerland, where the Timex Group Swiss Luxury Division is located. “We need to move the needle and be close to the end consumer…. I can put in the same amount of money to be closer to the end consumer and be more effective…. It is a cost I do not believe we can afford anymore. 

He added, “I’m not the only one (leaving) Baselworld. Plenty of brands have decided to step out of there. When the market is suffering I think you need to try something new. It is worth it for us to do something different.”

In May, luxury watch brands, Ulysse Nardin and Girard-Perregaux, announced that they were exiting Baselworld to exhibit at the Salon International de Haute Horlogerie (SIHH), which is held January in Geneva. Both brands—owned by Kering, the French luxury goods holding company—occupied the most prestigious space at Baselworld, Hall 1.0, the first floor of the Global Hall where the most prestigious independent and corporate-owned watch brands are located. 

Watch, jewelry and gem companies have been leaving Baselworld since the trade show unveiled its $454.5 million upgrade to the Messe Basel fair complex in 2013. The new renovations came with hefty price increases for exhibition space as the trade show began positioning itself as a luxury event. In response, in 2013 there were 355 fewer exhibitors, primarily smaller players and those who provide products and services within the trade. However, a few large brands also balked at the new asking price. International jewelry brand, David Yurman, was perhaps the most high-profile company to leave the fair in 2013. 

The change did attract some luxury brands, most notably Graff Diamonds, which began exhibiting at Baselworld in 2014 at Hall 1.1.

Baselworld Hall 1.0 (Photo Courtesy of Baselworld)

Meanwhile, UBM Asia established “Jewellery & Gem Fair – Europe” in 2014 in Freiburg, Germany. The dates and location line up nicely with Baselworld. Freiburg is less than an hour away from Basel, Switzerland. Many of the jewelry, gem and watch trade companies that used to exhibit at Baselworld now exhibit at the new show.

Despite the issues, Baselworld remains the world’s largest watch and jewelry fair. It is also the most important watch and jewelry show in the world for new product introductions and for international exposure. Show officials said in 2016 attracted 145,000 attendees—who include representatives from exhibiting companies, buyers and other visitors—a 3 percent decline from 2015. There were approximately 1,500 exhibitors. The number of journalists covering the event increased 3 percent to about 4,400 from 70 countries. 

It’s not just Baselworld. Large and small jewelry and watch trade shows throughout the world have been struggling to find their footing. The September Hong Kong Jewellery & Gem Fair, the world’s largest fine jewelry trade fair, reported attendance declines for two consecutive years. In the U.S., JCK Las Vegas (the largest jewelry trade show in North America and at one time the largest in the world) has never fully recovered from the 2008-2009 global recession. SIHH, known for its exclusivity, has opened its doors to more watch exhibitors and buyers.

Marai says driving this move is a change in the way that consumers relate to brands. This has prompted his push to find new ways for his company to get closer to its customers through its marketing practices and sales. The search for these new practices is further complicated by the various economic and geopolitical issues throughout the world that are affecting distribution and sales. This ranges from the steep decline in sales from the once booming China and Hong Kong marketplace, to the ongoing conflicts in the Middle East, the Western economic sanctions imposed on Russia and the surprise victory of Donald Trump as U.S. president.

He says the brands he manages through the Timex luxury division are doing better than most because they are a smaller and newer to the industry. The Versace and Versus part of the business was founded in 2004 and the Ferragamo and Nautica business three years later. However, he says it’s necessary to be proactive.

“In tough moments you have to be more active. The market is suffering, the economy is not perfect everywhere. We are still very satisfied with what’s happening this year but I have to admit the market is not doing well,” he said. “We’re still showing growth because we are relatively small. We can still grow but in general the market is not performing well.”

Part of being active is embracing what Marai calls the “new digital revolution” with a “shop now, buy now” mentality.

“Everything is going digital at this moment and we’ve been struggling the past two years trying to embrace it. Because we work under license so we have some constraints. The brands cannot go in that direction just for watches. But more and more all luxury brands need to understand this digital revolution and need to manage it.” 

This requires a more direct relationship by brands with consumers through social media and through the availability of their products. This approach, in and of itself, is not new to those in the luxury market. However, achieving this relationship has been difficult for established luxury and fashion brands.

“Those who have the money in the next 10 years need to be reached in a completely different way,” he said. “Traditional communication is over. Those with the capacity to understand and to translate this into the market will be more effective.”

Marai is interested in using the Internet as a tool to communicate directly with consumers and present their products and brand. As an eCommerce tool, he still says traditional retail will still be primary source of sales, noting the data indicates that that eCommerce will account for 20 percent of total luxury sales in 2025. 

“There is a long way to go still. I’m pretty sure traditional distribution is frightened by the Internet and they should not be because it is used more as an information tool rather than just a purchasing tool. (However) it’s the best way to present your products. You can have your best show, your best shop where you can present all of your products exactly as you want them to be presented.”

Marai also is aware that online shopping is a fast and convenient way for consumers to buy products. 

“Through digital you can supply your customer with whatever he wants so when he comes to us for a different dial or different strap it is very simple (to fulfill that order). We have to try to create a bridge between the traditional distribution and the new tools that are offered through eCommerce in order to be more effective with the end consumer.”

Often overlooked Marai says is that more than 50 percent of watches are purchased as a gift. “This means the presentation needs to be more luxurious, more than the product itself sometimes.”

In addition, he says watches from fashion brands are considered an accessory and a vehicle of self expression and should be further addressed by luxury watch brands. 

“Brands such as ours, fashion brands, the design is more relevant than the movement inside. We have a good opportunity at the moment. Who cares today what is inside? The new generation they do not consider watches high-end technology.”

One piece of technology that muddled the watch market was the smart watch, Marai says, which after their initial success have failed keep the interest of consumers. However, it did cause damage by creating confusion with consumers and within the industry. He said the rush by traditional watch manufacturers to create their own digital watches was a mistake. 

“Apple was a huge success in the initial phase but people that bought it don’t use it,” he said. “It has created confusion for the end consumer and the distribution channels. Everybody wanted to be the first to produce the product and I think it was a mistake. It was a little bit too early.”

Marai says the luxury watch industry is still a “relatively rich market,” meaning that compared to other industries the margins are high. But he hinted that this may change down the road as brands continue to market and sell directly to consumers. 

“The distributor buys the product from the industry and then sells it to the retailer. (This) is not something that will last forever. The industry has to come closer to the distribution and become more direct and more effective, reducing a lot of the costs in distribution and (thus) making a more effective proposition to the end consumer.”

He added, “Some activities would have to possibly disappear.”

These are just some of the reasons Marai and others are reconsidering their commitment Baselworld. 

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Jewelry Fair VicenzaOro Involved In Merger Of Two Italian Companies

Matteo Marzotto, vice president (left), and Lorenzo Cagnoni, president, of the newly formed Italian Exhibition Group

Two Italian trade fair companies, Fiera di Vicenza Spa and Rimini Fiera Spa, have merged to form the Italian Exhibition Group. Fair representatives said Friday that this alliance makes the new entity a “top player in Italy” in terms of directly organized shows with 61 fairs in its portfolio (90% own by the trade fair organizations) and 160 other events and congresses. 

The company also says it is the first example of a merger between trade show enterprises in Italy. 

The new entity will be the promotion and internationalization platform for the entire “Made in Italy” production chain, meaning products will be designed in such a way that it will meet the needs of users in many countries, the companies said in a joint statement. 

Fiera di Vicenza in Italy’s Veneto region serves as the home of VicenzaOro, the Italian jewelry industry’s largest trade fair, held three times per year. It is one of the 61 trade shows the combined organization hosts at three venues in several product categories including Food & Beverage, Green Investment, Technology, Entertainment, Tourism, Transport, Wellness, and Lifestyle & Innovation.

Rimini Fiera Spa, located in the coastal city of Rimini in Italy’s Emilia-Romagna region, has two facilities: Rimini Fiera and Palacongressi Rimini.

There was no mention  in the joint announcement of how the merger will affect individual trade fairs. However, Italian Exhibition Group said there are no changes planned with either the names of the distinct fair venues or their operations.

The new Italian Exhibition Group logo

Perhaps the boldest statement by Italian Exhibition Group is its goal to be a publicly listed company and to act as the unifying element for other trade show organizations.

While the merger is being billed as a coming together of equals, it appears that Rimini will be the dominate player of the two. Lorenzo Cagnoni, president of Rimini Fiera will now serve as president and CEO of Italian Exhibition Group. Matteo Marzotto, president of Fiera di Vicenza, has been named vice president. In addition, the announcement was made in Rimini Friday. 

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Shouzui Yasui To Receive JNA Lifetime Achievement Award

The 2016 JNA Awards is presenting its most prestigious honor, the Lifetime Achievement Award, to casting solutions specialist Shouzui Yasui, CEO of Tokyo-based Yasui & Co. Yasui. He is being recognized for his dedication and significant contributions to the jewelry and gemstone industry.

The award will be presented to Yasui as part of the JNA Awards Ceremony and Gala Dinner scheduled for September 14 at the InterContinental Hong Kong, during the September Hong Kong Jewellery & Gem Fair.

The JNA Awards is regarded as one of the jewelry and gemstone industry’s most prized honors, recognizing enterprises and individuals that have demonstrated excellence, leadership and innovation, with a special focus on Asia, and whose ideas and actions have made a positive impact on their businesses and communities.

“There are two known ‘blue boxes’ in the jewelry industry. One is represented by a high-end consumer brand that has come to symbolize gifts of special significance. The other represents a jewelry casting company that the trade associates with high-quality and cost-effective manufacturing solutions. The latter is Yasui’s ‘blue box,’ said Letitia Chow, founder of JNA, director of Business Development – Jewellery Group at UBM Asia, and chair of the JNA Awards Judging Panel. “Wherever there is jewelry manufacturing in the world, one can find Yasui’s Vacuum Wax Injector. His contribution is noticed and felt widely throughout the industry.”

Yasui is a name that has long been associated with casting solutions for the jewelry industry. It started developing its Vacuum Wax Injector in 1980, which was marketed globally starting from 1983. In 1991, the company commenced exports of its casting machines. Three years later Yasui launched its electric Rotating Burnout Furnace. In 2002, the casting expert released its Digital Vacuum Wax Injection System. Ten years later Yasui rolled out its third-generation wax machine, ALTIMA.

“Yasui’s casting solutions, starting from the wax injector, were seen as pivotal in the mass production of jewelry, which consequently made jewelry accessible and affordable to many. This spurred on demand, triggering a ripple effect across precious materials suppliers, gemstone and jewelry manufacturers, wholesalers and retailers. These innovations changed the way jewelry was marketed and sold,” said Albert Cheng, a member of the JNA Awards judging panel and an advisor to the World Gold Council.

Shouzui Yasui said he couldn’t have been more surprised and delighted to be the recipient of this year’s Lifetime Achievement Award.

“For 44 years, I have dedicated my life to the development of casting solutions for the jewelry sector. I am thrilled and deeply thankful for this significant recognition. This accolade represents what decades of hard work and determination can accomplish. It is a great honor to be the recipient of JNA’s Lifetime Achievement Award,” said Shouzui Yasui.

The fifth edition of the JNA Awards is led by Chow Tai Fook, Gemfields and Rio Tinto Diamonds as Headline Partners, with Diarough Group, the Israel Diamond Institute Group of Companies, Shanghai Diamond Exchange, Guangdong Gems & Jade Exchange, and Guangdong Land Holdings Limited as Honoured Partners. 

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Asia’s Fashion Jewellery & Accessories Fair Attracts Nearly 4,000 Buyers

Asia’s Fashion Jewellery & Accessories Fair, held at the AsiaWorld-Expo center in Hong Kong, attracted 3,878 buyers from 84 countries and region, according to UBM Asia, which owns and operates the trade fair. More than 75 percent of buyers were from outside the Hong Kong region.
 
The four-day event, which ended February 21, was held earlier than its usual March schedule in order to suit the international trade event calendar. The Top 10 visiting countries (excluding mainland China and Hong Kong region) were the United States, Australia, the United Kingdom, Italy, Spain, Japan, Korea, Germany, France and Russian Federation. They accounted for 34.6 percent of total visitors.

“We are happy to note that the United States was the source of the biggest number of visitors, which accounted for 10 percent of total visitors,” said Celine Lau, director of Jewellery Fairs at UBM Asia.

The exhibition space near the Hong Kong International Airport was expanded by 17.6 percent from last year’s edition, UBM Asia said. It housed 386 exhibitors from 17 countries and regions, an 18 percent increase over the 2011 edition of the trade fair. The exhibitors were from Australia, Canada, mainland China, India, Indonesia, Israel, Korea, Nepal, Netherlands, the Philippines, Samoa, Thailand, Turkey, the United Kingdom, the United States and Hong Kong and Taiwan regions. More than 80 percent of them are from outside Hong Kong region.

Asia’s Fashion Jewellery & Accessories Fair is held three times per year. Upcoming dates are: June 21 – 24, September 19 – 22, and March 4 – 7, 2013.

First Impressions of the Hong Kong Jewellery & Gem Fair

HONG KONG—From the lion dance welcoming visitors to the second part of the two-tier event, to the mad scramble at buffet tables during the evening reception, the September Hong Kong Jewellery & Gem Fair kept me very busy. Unfortunately, I didn’t see much jewelry. That will come tomorrow.

The weeklong event, held in two venues (September 19-23 at the Asia World-Expo near the Hong Kong International Airport for diamonds, colored gemstones, materials and equipment; and September 21-25 at the Hong Kong Convention & Exhibition Centre for finished jewelry) is now the world’s largest fine jewelry fair, according to event organizers, UBM Asia. After attending the show Wednesday, I have no reason to doubt them.

Trade fair organizers and trade association leaders at opening day press conference.

The first two days of the fair attracted 15,000 buyers, a 32 percent increase from last year, Jimé Essink, president & CEO of UBM Asia Ltd., said during the opening day finished jewelry press conference Wednesday. “It is beyond our wildest dreams,” he said. “With (an expected) 45,000 buyers from 135 countries, it cements its standing as the world’s number one jewelry event.”

Letitia Chow, UBM Asia director of Business Development - Jewelry Group, and Wendy Pang, senior marketing manager - Jewellery Fair, at the evening reception.

Why has this tradeshow attracted so much attention in recent years? Two words: China, India.  While much of the world labors under an economic slowdown, the economies of these two countries are humming along. This is where the strongest growth in attendees is coming from, as buyers try to take advantage of consumers who are more than willing to spend their newfound wealth on jewelry. People from Mainland China now accounts for 32 percent of all attendees and for the first time has overtaken Hong Kong as the top visitor group.

Hong Kong, with its international port, strong business environment and its ideal location, is considered the gateway to China and much of Asia. Designers and manufacturers from around the world are flocking to this show to get into these strong markets. More than 3,300 vendors from 46 countries represent an 8 percent increase over last year, ensuring that the 1.4 square-feet of combined exhibition space is fully occupied. Planned expansion to the two massive centers won’t be ready for at least four years, leaving the organizers with the unusual task of being unable to grow further. But as Essink told me: “It’s a good problem to have."

The official toast at the evening reception.

I last attended this event in 2005 and I have to say to say that moving unfinished jewelry vendors to a second location has certainly made the convention center much easier to navigate. Security checkpoints are fewer and I can actually walk through the hallways and exhibition areas of the five-story convention center without running through a sea of bodies. Layouts are much easier to understand. Silver jewelry and other lower cost finished product have its own area. The International Premiere Pavilion features exhibitors showcasing luxury jewelry from about 20 countries in a dedicated space. Top Hong Kong brands have their own pavilion.

As I said previously, I will be talking jewelry tomorrow.

Hungry people