Russia’s place in international jewelry shows

By Tatyana Pototskaya

Global Overview

An exhibition, especially an international one, may be regarded as a functional model of the market for two reasons. First, all sectors of the industry are represented. In the jewelry industry, that includes the following: Precious and semiprecious stones; precious metals; finished gold, platinum or silver jewelry set with diamonds and precious stones; costume jewelry; fashion accessories; watches; equipment for the jewelry industry; jewelry packaging; and advertising.

Second, representatives of all parts of the “pipeline” attend exhibitions, including manufacturers, dealers and consumers. This makes exhibitions a convenient research setting for jewelry industry analysts, since good information on behavior, market dynamics and leading companies is otherwise difficult to gather.

For this study, we collected and organized comparable data on all significant international jewelry exhibitions—a difficult task, due to the lack of information on the subject in the Russian technical and trade press. We tried to answer five basic questions:

1. Who? Which companies regard participation in jewelry exhibitions as a component of their marketing strategies?
2. Where? Which regional markets are a priority for trade show participants?
3. How are jewelry exhibitions important for them? Which exhibitions provide the most powerful organizational opportunities to promote goods on the world market?
4. What is the market structure for jewelry exhibitors? In other words, which goods are most in demand on each regional market?
5. Why? What factors create the situations and trends that we can observe on the regional jewelry markets?

At present, there are more than 230 jewelry exhibitions in 37 countries. Of these, 84 exhibitions held in 25 countries (30 percent of the total) have significant international participation. We found that more than 51,000 companies from 87 different countries took part in these international exhibitions.

Jewelry exhibitions tend to follow a system. The first standard element is organizational: a select group of companies helps organize shows in many different countries. The second standard element is periodicity: many of the trade shows we examined are “semi-annual,” taking place two or more times a year. Third, there are specialized exhibitions for different sectors of the jewelry industry, such as “B2B” (business-to-business) and “B2C” (business-to-consumer) oriented shows, although some cater to both types of company. B2B formats tend to be narrowly focused. With their professional attendees and compact size, such exhibitions are an optimal setting in which to seek new business partners or conduct research on the market and the competition. B2C shows offer good opportunities for advertising and marketing by companies focused on the mass market, though there is a risk involved, as it is difficult to predict in advance the exact demographic makeup of the attendees. Conducting retail sales at such exhibitions can be very expensive.

In conducting our survey, we at OIS Krystall decided to focus our analysis on the jewelry exhibition organizers’ efforts to promote loose polished diamonds and finished jewelry. Our preliminary results show that regional jewelry markets have different characteristics: The North American market is largely consumer oriented; the Latin American market potentially more industrial; the Asian market is industrial and potentially consumer (with both “new industrial” and  “pseudo-advanced” characteristics); and the European market exhibits stability and a high degree of saturation.

Each region also has its own distinct place in the international jewelry exhibition sector. Thus, European jewelry exhibitions focus on fashion jewelry, Asian exhibitions highlight diamonds and precious stones, and North American jewelry exhibitions are essential for those engaged in promotion of retail consumer jewelry.

Of the 40 European countries, only 10 (25 percent) regularly hold jewelry exhibitions—Italy, Germany, France, the United Kingdom, Spain, Switzerland, Portugal, Poland, Belgium and the Czech Republic. The total number of exhibitions held in these countries is 26; Italy hosts the greatest number, eight, followed by France with four, and Germany and the United Kingdom with three each. If we examine certain basic statistics, such as the number of companies participating and the number and proportion of participants arriving from different countries, Italian, Swiss and British jewelry exhibitions take pride of place. The jewelry exhibition sector in Europe is very active compared to other regions of the world, but only a relatively small number of the exhibitors represent the diamond and diamond jewelry industries, and these products make up a comparatively small part of the commodity structure at the exhibitions.

While other exhibitions are also important, Basel World may be regarded as the absolute regional leader, except as regards diamond jewelry, which is displayed alongside loose polished diamonds at the exhibition and is therefore difficult to analyze separately. International Jewellery London, Iberjoya, and Spring Fair Birmingham are significant trade shows for the promotion of loose polished diamonds and diamond jewelry. VicenzaOro 1, VicenzaOro 2 and  OroGemma are important as leaders and harbingers of new fashions in the jewelry industry.

The jewelry exhibition sector in Asia is characterized by two peculiarities: first, it is very active, having the greatest number of countries organizing exhibitions; and second, it has the highest proportion of foreign participants in the world—twice as large as in Europe and four times as large as in America. This demonstrates the present attractiveness and good future prospects of the Asian jewelry market. The region is vital for those wishing to promote diamonds through the jewelry exhibition system, as proven by the large number of diamond companies that exhibit at the Asian shows and the leading role that diamonds play in the commodity structure of these exhibitions.

Among the 38 Asian countries, only 10 (26 percent) host jewelry exhibitions on a regular basis—Japan, China, Thailand, South Korea, Malaysia, India, the United Arab Emirates, Turkey, Lebanon and Bahrain. The total number of exhibitions held in the region is 30. China hosts the majority of these shows—11 are held on the “mainland” and five in Hong Kong. The United Arab Emirates host five and Malaysia hosts four shows.

Due to Hong Kong’s unique history and status, it makes sense to analyze its jewelry exhibitions separately from those held elsewhere in China. From the standpoint of the number of different companies and countries taking part, Hong Kong’s jewelry exhibitions set the pace for Asia. However, when it comes to the proportion of foreign participants, Bahrain, the United Arab Emirates and Malaysia are the leaders.

The most important Asian jewelry exhibitions are undoubtedly the Hong Kong Jewellery & Watch Fair, the Hong Kong International Jewellery Show, International Jewellery Tokyo and International Jewellery Kobe (Japan). Nevertheless, trade show activity in the rest of China and other Asian nations is on the rise.

Of the 35 countries in the Americas, only four (11.5 percent) regularly hold jewelry exhibitions—the United States, Canada, Brazil and Chile. There are 24 international jewelry exhibitions in these countries, the great majority of them (20) in the United States. From the standpoint of the number of different companies and countries taking part, U.S. jewelry exhibitions set the pace for the Americas. However, when it comes to the proportion of foreign participants, Chile ranks first. This superficially surprising piece of information is easily explained by the fact that the United States has such a well developed jewelry industry, while Chile lacks one altogether.

The international jewelry exhibition sector in the Americas has a number of unique characteristics. First, it is concentrated primarily in one country—the United States. Second, it is strictly systematized (there are absolutely no “single” exhibitions). Third, the level of activity is relatively low compared to Europe and Asia, a fact which is easily proven by certain key statistics—the relatively small number of countries represented in these trade shows and the relatively low proportion of foreign companies—although there is a surprisingly large number of purely domestic U.S. jewelry exhibitions, without significant international involvement. Fourth, loose polished diamonds and diamond jewelry are energetically promoted at these trade shows, as we can see from the large number of diamond and diamond jewelry firms that participate in them, and from the great importance these companies have in the commodity structure of the exhibitions. The most significant jewelry exhibition organizers in the United States are JCK, with shows at New York, Las Vegas and Phoenix, and GLDA, with shows at Tucson and Las Vegas.

Russian Exhibitions

Jewelry exhibitions are regularly held in only seven countries out of the 15 former republics of the USSR: Russia, Ukraine, Moldova, Lithuania, Latvia, Uzbekistan and Armenia. The number of exhibitions is constantly growing and is now approaching 50. Russia hosts the greatest number of these shows—30—and Ukraine hosts another seven. The five other countries host only one or two annual jewelry exhibitions apiece. Although this sounds like an impressive number of exhibitions, most are oriented toward the domestic market, and only four can be classified as truly international based on the proportion of foreign participants: Jeweler (Moscow), New Russian Style (Moscow), Junwex (St. Petersburg) and Jeweler Expo Ukraine (Kiev). Jeweler has the largest number of participating companies (table 1), while New Russian Style and Jeweler Expo Ukraine boast the largest proportion of foreign participants. In 2004, the unequivocal leader in international involvement was New Russian Style, where foreign companies made up more than 60 percent of corporate participants. This achievement was the work of the Reed Exhibition Group, the world leader in organizing international jewelry exhibitions.

Table 1. Comparative characteristics of international jewelry exhibitions in Russia

Exhibition	City and Date	No. of Companies	No. of Countries	Proportion of Foreign Companies	Commodity Structure
Jeweler	Moscow, September 2003	273	8	14% overall Italy – 8% Turkey – 4%	Jewelry with precious stones – 36% Equipment – 14%Diamonds – 9%Other goods- 41%
New Russian Style	Moscow, May 2004	202	12	61% overall Italy – 24% India – 5% Germany – 23%France – 15%
Junwex	St. Petersburg, February 2005	144	2	1% Armenia	Jewelry without precious stones – 39% Jewelry with precious stones – 38% Equipment – 8%Semiprecious stones – 3% Diamonds – 3%Other goods – 9%

Foreign companies taking part in Russian jewelry exhibitions mostly display either jewelry manufacturing equipment (mainly Italian firms) or low-priced jewelry items (mainly Turkish and Indian firms). This reflects the distinctive structure of the Russian jewelry market: Rapid development combined with low consumer purchasing power. However, in 2004 New Russian Style proved that distinct subsectors for various goods and services are now emerging on the Russian market—i.e., there are now separate markets for precious, semiprecious and synthetic stones; jewelry; raw materials for manufacturing jewelry and the decorative arts; jewelry manufacturing equipment; hallmarking of items made from precious metals; watches; accessories; souvenir production; packaging materials; design services; publishing houses; research and educational activities; advertising services; financial services; expert valuation of gems and jewelry; engraving; software; and quality control for everything from wholesale manufacturing to branded and exclusive items. Another encouraging development at New Russian Style was the high profile of foreign exhibitors from Italy, India, Turkey, Australia and Thailand, all of which were novelties on the Russian market.

Russian Presence at International Exhibitions

Russian participation in international jewelry exhibitions outside Russia is extremely low. In 2004, Russian firms took part in only 18 of the 84 international jewelry exhibitions we surveyed (only 21 percent of the total). Russian companies took part in shows in only 10 foreign countries (fig. 2). Moreover, only 32 companies out of more than 3,500 active in the domestic Russian market said they were also involved in the international jewelry market.
There was some variety among the Russian firms that did participate in international exhibitions. Among them were producers of high-quality diamonds and precious stones for the B2B market—ALROSA, OIS Krystal, and R & R Gemstone Limited; companies active in the B2C sector—Almaz – Holding, Amber – Plus and Orchid – Design; watch manufacturers Salut, Chaika, VOLMAX and Moscow Watch Salon; manufacturers of exclusive items, such as Vikart Russia Moscow; manufacturers of mass market jewelry, few of whom cater to the domestic Russian market; trade media—Jewelry Review, Russian Jeweler, Jewelry World and Russian Jewelry Net; Russian exhibition organizers Restek and ROSINEX - Russian International Exhibitions; trading companies and more. It is difficult to say whether any of these categories stood out, since Russia is just beginning to enter the world jewelry market and Russian firms are still trying to understand the basic rules and decide whether it is even profitable to participate in the global market. However, even a glance at the growing list of Russian jewelry firms that have chosen to participate in international exhibitions in the past two years leads to the conclusion that interest in this kind of activity is growing. In the first four months of 2005 alone, Russian companies took part in a greater number of international jewelry exhibitions than ever before, due to the development of jewelry exhibitions in Poland (Amberif), Lithuania (Amber Trip), the United Arab Emirates (IFJA and IWCF) and Turkey (Rotaforte), and the strengthened Russian presence in Italy (MACEF Spring).
The most attractive exhibitions for Russian companies in 2004 were shows held in the United States, Hong Kong, Thailand, Switzerland and Ukraine (table 2). On the positive side, that reflects Russian jewelry manufacturers’ growing awareness of the most significant international jewelry exhibitions (Basel World, the Hong Kong International Jewellery Show, the Hong Kong Jewellery and Watch Fair, the Bangkok Gem and Jewelry Fair, GLDA, and Diamonds by JCK). On the negative side, the Russian exhibitors are still viewing their choices fairly narrowly; they seem to prefer “status” exhibitions. While it is a good thing for Russian jewelry firms to gain exposure to world fashion, technological, marketing and advertising trends, their cautious approach is preventing them from using exhibitions to figure out how to break into new markets. The Swiss, Hong Kong and Thai exhibitions can hardly be considered as promising training grounds for Russian firms seeking to market their rough diamonds and finished goods, since these events tend to showcase high-end jewelry and don’t help the newcomer learn much about the local markets in the countries in which they are held.
The U.S. exhibitions are an exception to this rule, since they are capable of addressing both national and global issues. Companies displaying their products in the United States are doing so with the express purpose of breaking into the most important jewelry market in the world today – the American market. The lack of clear regional and product focus by Russian exhibitors highlights the fact that the Russian industry as a whole is still in the early stages of its attempt to break into the world jewelry market.

Table 2. Russian presence at international jewelry exhibitions, 2004-05

Exhibition	Country	City and Date	Number of companies	Number of countries	Proportion of foreign participants	Number of Russian participants
Basel World	Switzerland	Basel, April 2004	2186	43	67%	4
VicenzaOro 1	Italy	Vicenza, January 2004	1639	26	22%	1
VicenzaOro 2	Italy	Vicenza, June 2004	1534	29	16%	1
MACEF Spring	Italy	Milan, January 2005	2638	42	15%	2
Inhorgenta Europe	Germany	Munich, February 2005	1212	38	33%	6
Amberif	Poland	Gdansk, March 2005	430	17	10%	2
Amber Trip	Lithuania	Vilnius, March 2005	106	9	46%	9
International Jewellery Tokyo	Japan	Tokyo, January 2005	1323	34	36%	2
Hong Kong International Jewellery Show	China	Hong Kong, March 2005	1547	40	40%	1
HK Jewellery & Watch Fair	China	Hong Kong, September 2004	1959	41	49%	2
HK Jewellery & Watch Fair	China	Hong Kong, June 2004	730	26	31%	1
HKIJ Manufacturers Exhibition	China	Hong Kong, December 2004	197	14	22%	1
China International Gold Jewellery & Gem fair	China	Kwangchow, June 2004	181	15	36%	1
Bangkok Gem & Jewelry Fair	Thailand	Bangkok, February 2005	979	16	15%	1
Bangkok Gem & Jewelry Fair	Thailand	Bangkok, September 2004	926	16	15%	1
India International Jewellery Show	India	Mumbai, July 2003	609	14	5%	1
Rotaforte	Turkey	Istanbul, March 2005	842	26	32%	2
IFJA & IWCF	UAE	Dubai, March 2005	116	28	81%	1
GLDA Tucson	USA	Tucson, February 2005	127	18	45%	1
GLDA Las Vegas	USA	Las Vegas, June 2004	367	28	51%	2
JI Showcase	USA	Miami, January 2004	531	19	10%	1
Diamonds by JCK	USA	New York, September 2004	209	8	22%	1

Tatyana Pototskaya is a geographer, assistant professor, and expert market analyst with OIS Krystall’s marketing department.