Western jewellery market looks East for new sales

Chow Tai Fook has about 1,500 stores and has an annual growth rate of 60 percent. (Getty)

All eyes on China as European green shoots prompt growth discussions.

As the watch and jewellery industry showed signs of recovering from the downturn, one of the key topics of discussion at a buoyant BaselWorld this year was export. The deflated state of the European export market has prompted many to look at the growth opportunities offered by emerging market China.

Italian jewellery exports have been hit hard over the past 12 months as soaring gold prices resulted in inflated costs and exports fell 20.6 percent in the first semester of 2009.

Germany’s jewellery export market has also suffered and Alfred Schneider, the country’s representative on the BaselWorld advisory committee, said 2009 had brought “the most significant fall in five years”.

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Watches appear to be faring slightly better with Swiss watch exports showing signs of recovery. In January exports rose 0.7 percent year on year after 15 months of decline and François Thiébaud, who sits on Swatch’s executive group management board, said that prospects for Swiss watch exports in the coming months look encouraging.

But the overall weak market has prompted the European industry to look east for future growth. After years of representing a threat to the watch and jewellery industry, China, and its booming middle class, is now seen as key to future development and recovery for both brands and retailers.

In 2009 China was the number one importer of Swiss watches and exports of Italian jewellery to China rocketed 79 percent. Last year, Chinese consumers bought US$8 billion (£5.37 billion) of diamond jewellery, and with 9 million couples marrying each year the wedding market has huge potential.

Gems and Jewellery Trade Association of China vice-president and secretary-general Sun Fengmin said: “China’s jewellery industry has had a late start but it’s increasing rapidly. It’s one of the biggest manufacturers and most important consumers.”

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