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24 February 2012 0 Comments
Posted in Jewellery & luxury goods, Opinion

Entering into the Dragon’s Den. Stephen Welfare, partner reports back from the Hong Kong International Jewellery Trade Show

Posted by , Partner

2012 is the year of the Black or Water Dragon in the Chinese Stem-Branch Calendar system.

The image of the dragon in Chinese legend is mystic, blurred and untouchable. Following on from attending at probably the UK’s largest trade show, The Spring Fair at Birmingham NEC earlier this month, I travelled across the globe to see how it’s done in the Far East, and discover if there are any trade secrets to be learnt. I joined those Brits exhibiting and visiting the Hong Kong International Jewellery Show (“HKIJ”). Royds enjoys the patronage of many jewellery businesses as clients.

China has longed been viewed as the worst enemy of European design; the malevolent dragon that shamelessly copies the originality and creativity of western designers. How frequently have we seen “made in China” stamped on cheap copy products flooding worldwide markets devaluing brands and denying growth and/or wealth to individuals and design companies? So is exhibiting at a trade show in China a case of walking into the Dragon’s Den and asking to get burnt?

It may well be; given that cheap copy products continue to pour out of the factories in China for shipment around the world, with much of it passing through the vast container port at Hong Kong. But for the UK companies who took stands at the HKIJ it was an opportunity to showcase their goods to the Asian market. As European economies choke and stumble in and around recession, the Far East continues to enjoy growth. China and other Asian countries are seeing a burgeoning consumerism off the back of the commercial strength of their manufacturing success. Perhaps it’s time for western businesses to claw something back by selling goods and services to these newly rich and consumer goods hungry customers?

Possibly few items represent wealth and prosperity more readily than fine jewellery. It is a pure luxury; so jewellery sales ought to be a suitable barometer for measuring the success and wealth of Chinese and other Asian consumers. My advice is pack up your samples and head off to Hong Kong. With more than 3,000 exhibitors from 48 different countries the HKIJ Show is huge. Exhibitors come from all over the world from Brazil to Kenya, to Thailand, to Australia but only 11 from the UK. I consider the small number of exhibitors from Great Britain to be disappointing. It seems we Brits are yet to be convinced that the Chinese want to buy British design rather than copy it!

I was able to meet and talk with most of the British exhibitors and generally they were optimistic about future business with Chinese retailers. China’s shops want to stock global brands and quality items, and they have the purchasing power that the Europeans do not. If there should be any doubt about Chinese interest in designer goods have a look around the shopping malls of Hong Kong Island and Kowloon. Despite the plethora of vendors offering knock off items on the streets and in the night markets the cash rich Chinese queue up outside the brand stores.

As well as those European companies exhibiting at HKIJ Show there were many hundreds indeed thousands of European visitors. The Far East is arguably the premier location for jewellery manufacture on a significant scale. Looking for the right partner to make their designs, to supply materials and manufacturing services brings UK businesses in large numbers to Hong Kong and Bangkok, Thailand alike.

Royds’ client John Stewart Jewellers were there. What the next trend will be they wouldn’t let on, if they knew!

Distribution business and agency KM Jewellery was at the show looking for lines to compliment the current consumer desire for glitzy ball and crystal bracelets and the, for now, continuing love affair with beads and charms. It was no surprise to me that US bead company; Chamilia, were exhibiting once again as it looks to take its range and brand of bead bracelets to the Asian market. Is it stealing a march on rival Pandora who wasn’t exhibiting? Whilst Pandora is visibly trading in Hong Kong through its own retail stores, how far is it selling to mainland China retailers? Julie Forte, global account development director at Chamilia was certainly aiming for her company to do so.

As for trade secrets I wasn’t able to determine anything significantly different in the approach of the Hong Kong show to that in the UK jewellery shows save for the scale. The Chinese are buyers with cash, and no longer merely low price manufacturers. The dragon that I encountered was benign and potentially benevolent.

If you have comments on this blog please contact Stephen Welfare, Partner in Litigation on 020 7583 2222 or sbw@royds.com

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