Hong Kong’s Bold Stroke

Everybody wants a piece of the emerging Chinese marketplace. At least it seemed that way to anyone jostling among the throngs of people attending the Hong Kong Jewellery & Watch Fair, held Sept. 21–25.

More than 40,000 visitors attended (18,707 from Hong Kong), which represents a 4.7 percent increase from the previous year’s figures, according to CMP Asia Ltd., the show’s organizers. The United States increased its presence by 15 percent.

The largest group of visitors outside Hong Kong came from mainland China, up 2 percent to 3,803, followed by Taiwan, up 2 percent to 2,018 visitors. The other countries in the top 10 in terms of numbers of visitors were Japan, India, Korea, Thailand, the Philippines, Australia, Indonesia, and Singapore.

The show’s growth has been dramatic. This year, nearly 2,000 exhibitors from 47 countries occupied almost every inch of the seven-story, 200,000-square-foot Hong Kong Convention and Exhibition Centre, spilling into suites and conference rooms and overflowing into hallways. CMP Asia Ltd. says there’s a waiting list of more than 800 suppliers.

The fair includes 15 international pavilions and seven pavilions dedicated to specific categories (e.g., jade; gemstones; equipment, packaging, and technology).

To meet the demand for exhibit space and the increase in visitors, next year’s trade fair will be held at two venues: the convention center and a new building under construction, Asia World Expo, near the Hong Kong International Airport.

LARGE CROWDS, STRONG BUSINESS

The second day of this year’s fair was by far the busiest. Hall 1, closest to the main entrance, was jammed with buyers throughout the show. Other areas of the massive convention center, which was sometimes difficult to maneuver because of multiple layers of security and unclear signage, experienced less traffic at various times. Exhibitors interviewed by JCK all reported good business, although a few in the less-crowded areas said privately they wished they were in Hall 1.

Larisha Budhrani, owner of Italian company Magia, located in Hall 1, said the first day was her strongest, but every day was busy. “We’ve had lots of orders,” she said. “September is busy because of the holiday season.”

Joyce Hui, marketing manager for Hong Kong’s Yat Sing Jewellery Co., described the crowd on the third day as, “OK,” adding, “It was quite crowded 15 minutes ago.”

Waddy Jewellery’s booth was so packed throughout the show that marketing executive Bonnie Chan barely had time to talk to JCK.

During a momentary lull in the action, Amanda Lai of San J. Jewellery said it was a “good show with lots of orders.”

GATEWAY TO CHINA

At an opening-day press conference, four representatives of Hong Kong’s jewelry industry said the worldwide jewelry industry is attracted to the friendly business environment that Hong Kong and China offer along with the growing wealth enjoyed by Chinese residents as the communist country embraces capitalism.

The speakers focused on Hong Kong’s free-port status, China’s low tax rate, and the increasing wealth of the country’s residents. They promoted Hong Kong as the gateway to the emerging Chinese market.

Edward Cheung, chairman of the Hong Kong Jewelry Manufacturers’ Association, cited Hong Kong’s free-port status as “a major factor” in the rapid growth of jewelry exports over the last three years. In 2004 exports increased 19 percent, and from January to July of this year they rose 26 percent to $13.2 billion. More than half of Hong Kong’s exports go to the United States (up 22 percent from January to July), but Cheung added that he is encouraged by the increased interest of European markets, particularly France (up 56 percent), Germany (33 percent), and the United Kingdom (up 14 percent) as well as Japan (up 11 percent).

“There is no import tax or sales tax,” he said. “Jewelry enterprises can operate without restrictions in conducting business in Hong Kong.”

The growing affluence of the people of China is creating new markets for jewelry within its borders. Cheung called the growth in this segment of the industry “phenomenal.” “Hong Kong is becoming one of the most important diamond centers in the world,” added Lawrence Ma, chairman of the Diamond Federation of Hong Kong, China. “The diamond industry, together with jewelry manufacturing, is prospering because of this.” He noted that the trade fair is the only place where jewelers and exhibitors can exchange product and money.

Charles Chan, chairman of the Hong Kong Jewellery & Jade Manufacturers Association, said consumers around the world are responding to the price and quality of jewelry manufactured in China.

“We are proud to say that we are performing well,” Chan said. “Innovative design and quality products are the components for creating our success in the Hong Kong jewelry industry.”

Leung Sik Wah, chairman of the Hong Kong Jewellers’ & Goldsmiths’ Association, said the growth of the industry is the result of Hong Kong’s open borders and the assurance that jewelry from Hong Kong meets industry standards.

Hong Kong has been known as a manufacturing hub, but several speakers cited efforts to turn it into an international design center. Among these efforts is the Buyers’ Favorite Jewelry Design Competition, which was held for the seventh straight year as part of the show. The Hong Kong Jewelry Manufacturers’ Association launched the annual event to enhance jewelry-design standards and arouse the interest of buyers from around the world. The competition aims to stimulate the creativity of local designers and inspire them to create appealing, original jewelry designs with market appeal.

LOCAL AND GLOBAL APPEAL

More jewelry designers and manufacturers from outside China are turning to the country to produce quality designs at lower cost. One jewelry designer from Italy opened up shop in Hong Kong to produce her designs.

Magia’s Budhrani said she was attracted to the city because she can produce her jewelry for less money than it would cost in Europe. “I can provide Italian designs at Hong Kong prices,” Budhrani said. “I can be more competitive.”

Magia, which is Italian for “magic,” specializes in contemporary Italian designs with a focus on color. Budhrani says she likes working with 18k white, rose, and yellow gold while using a variety of colored stones, such as orange, lilac, and green sapphires; moonstones; and jade to create trendy and colorful jewelry combinations.

Local companies were well represented at the show. Waddy Jewellery Co. manufactures and exports colored-stone jewelry in 9k, 14k, and 18k gold and platinum at various prices, said Bonnie Chan. The company produces about 200,000 pieces of jewelry per year in its production facilities in the Chinese manufacturing center of Panyu, near Hong Kong.

San J. Jewellery, with headquarters in Hong Kong and a manufacturing facility in Panyu, specializes in diamond jewelry, particularly jewelry with invisible settings. “You will not see any mounting between the diamonds,” said Amanda Lai. “No gold between the diamonds. We can do it on curved surfaces, not just flat surfaces. Excellent craftsmanship is required.”

Yat Sing Jewellery Co. specializes in diamonds and cubic zirconia jewelry set in 14k, 18k, and silver mountings. The company also works with some colored stones and with colored enamel.

The Hong Kong Jewellery & Watch Fair is billed as the biggest pearl fair in the world, and one of the pearl industry’s largest companies, Jewelmer International Corp. of the Philippines, had a strong presence at the show, hosting a variety of fashion shows during the five-day fair, culminating with a special event called The Ultimate Orient, featuring its latest pearl designs and music and fashion from the Philippines’ brightest stars.