Agni CZ Jewels holds starry event at Oberoi Mall

The event saw stars from the film Dum Maaro Dum speaking about Brand Agni

Post By : IJ News Service On 04 May 2011 12:10 PM
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China and India are endeavourig to claim supremacy with more and more focus being laid on the Chinese market. India, which is yet to make a mark in the jewellery sector, stands in contrast with China which by far a more established jewellery manufacturer. India has set out to become world leader in jewellery too as China moves to woo Indian traders with attractive policies, trading platform, professional and productive labour force. Will India set history amid these challenging market forces is something we have to wait and see. Meanwhile, {{Diamond World}} takes a closer look at the Chinese market that boasts of a productive infrastructure and a high market potential...
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China with a huge consumer market has opened doors to a wider business opportunity after the new trade policy. The gems and jewellery industries of China and India took off around the same time a couple of decades ago. India captured the diamond sector while China put its best foot forward in the jewellery sector and lately has been making waves in the international market. Many of the jewellery designs created in China are in vogue in the US and other advanced countries. But there is no comparison between China and India when it comes to diamond cutting and polishing. %% India, which boasts of a rich cultural heritage and passion for jewellery has yet to make a mark in the global arena. So far India contributes only a meager 2% to the jewellery markets.
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Many manufacturers are flocking to China for greener pastures in the wake of the rising market potential there. The {{Hong Kong International Jewellery Show 2005}} witnessed a gamut of manufacturers of gems, diamonds and jewellery from several countries displaying their goods. More than 30 manufacturers and diamond dealers from India also participated in the Show. %% India, has so far been a major player in the diamond sector, but lately it has been putting in efforts to take off in the jewellery sphere too. Jewellery designing in India has been more traditional and less contemporary that sells well in the US and other markets in Europe. %% China, on the other hand, has taken up contemporary designing. %% The finish and quality of jewellery from India takes a back seat when compared with China, an oft repeated statement in the international market.
Finishing Better in China
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"We see a lot of potential in the Indian and Chinese markets," says {{Tony Mehta}} of {{Diasqua International Ltd}}, who basically deals in polished diamonds. In the late 90s, the company turned to jewellery production. It is also undertaking the production of diamond and fine jewellery watches besides selling loose diamonds. "We also create a watch line which is assembled in China using the Swiss knowhow," said Tony Mehta. %% The company has an established set up in China with a unit producing diamond and gold jewellery. "We are also manufacturing jewellery in China with a workforce of 150 artisans in our factory here," he said. %%{{ But why China? }}
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"China has better finishing and the designing part is better than India," states Tony Mehta candidly. %% Besides Chinese craftsmanship, the labour cost in China is much higher compared to India. It is the cheap labour cost of India that attracts most manufacturers abroad". Tony agrees to the fact that the labour cost in China is much higher but the per capita productivity is higher too.
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There is also a major shift in the marketing strategy with manufacturers tapping the consumer potential directly through retail sales. Having achieved an optimum in the diamond exports sector, India is now moving into the local market which hold promising returns.
China too holds a large potential with more and more people opting for diamond and gems-studded jewellery when it comes to occasions like weddings, engagements or any other festivals. "India and China hold a large consumer potential," says the Diamond Trading Company, which has been promoting consumerism through its Supplier of Choice policy in the last three years.
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Consumers are more aware of what they buying especially where diamond jewellery is concerned. The Indian Middle Class which by far believed in saving has become more spend-thrift. It is the precious market that holds a tremendous potential and of course the youth too who view jewellery as a fashion statement. %% The Chinese, on the other hand, had closed their doors to diamond as being inauspicious. "But now if you want to get married get a diamond ring," says {{Carol Cheung}}, a Chinese delegate who visited India recently. %% In this changed attitude, the Hong Kong Jewellery Show was a big success. %%{{ Hong Kong Show 2005 }}%% The international jewellery show attracted a total of 26,753 buyers from 124 countries and regions, up 7.39% when compared the Show in 2004. %% In additional to local and mainland buyers, most of the buyers were from the US, Taiwan, Japan, Thailand, the Philippines, Korea, Australia, India and Italy.
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According to an independent industry survey conducted by {{Oracle}} during the Show, industry players are optimistic about jewellery exports in 2005. %% Jewellers expect a 10% sales growth this year. They also expect a bullish sales growth of 16% in emerging markets, such as the Chinese mainland, Russia, India and Eastern Europe.
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At least 88% believe that the global jewellery market in 2005 would be better than or same as in 2004 - a year that Hong Kong experienced a 19% growth in jewellery exports.%% Hong Kong Jewellers are planning to further grow their businesses by expanding sales inn the US and Europe (26%), developing original design business (24%), selling into emerging markets such as Chinese mainland, Eastern Europe and Southeast Asia (20%) and establishing brand business (15%).
No Labour Union Problems in China
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More than 400 workers have been employed into jewellery manufacturing at {{Komal Gems Ltd}}. in China. Komal Gems operating for the last two years is a wing of DTC Sightholder {{Laxmi Diamonds Group}}. "We manufacture jewellery in the range of US$100 to $1000 and cater mainly to the US market," says Raju Shah of Komal Gems Ltd. %% "We are not selling jewellery in the local market of China at the moment. We mainly sell loose diamonds in the Chinese market," he said.
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Manufacturers in China have to work on the ready stock basis. "We being diamond manufacturers we are at a better edge. We take the orders on the basis of our diamond production and then get to producing jewellery. But other jewellery manufacturers could face problems. They take jewellery manufacturing orders first and then source diamonds for it. Since the price is very unstable, the manufacturer has to bear the risk." %% The domestic consuming markets in India and China are growing very rapidly since the income of the middle class is increasing and they are willing to spend more now.
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"The major benefits of manufacturing inn China are quality production, timely delivery, no labour union problems, etc.," said {{Raju Shah}} in a lighter vein.%% "In fact the labour is expensive but the productivity is good. And for the Hong Kong show the response is good, but the prices are very high. "The buyer is a bit insecure on the price point of view."
Local exhibitors believe that joining trade fairs here in Hong Kong or in major markets is the most efficient and effective way to market their products. Hong Kong jewellers pay keener attention to creative designs and branding business than ever. %% Half of them will develop branding business in the next two years, mainly via building new brands, or acquiring established brand through licensing or co-operation. %% At present, local jewellery companies employ 7.2 in-house designers in average. They plan to employ 1.4 more in-house designers in the next 12 months. This is 50% more than in 2003 (4.8 in-house designers on average). %%{{ Indian Manufacturers in China }}%% In the last couple of years, Indian manufacturers in China have been flourishing, thereby attracting other manufacturers who are at the end of the road where diamond business is concerned. Most small and big manufacturers alike feel that with growing shortage of rough diamonds and the changing trend of designer jewellery it is "{{more sensible to get into jewellery making}}."
India has Brains, China Experience
Another veteran from India in China is {{Sanjay Kothari}} of the {{KGK Jewellery (HK) Ltd}}. The {{KGK Group }}is almost a century old. It commenced trading of precious stones in Rangoon, Jaipur and Chennai. The Group not only deals in cut and polished diamonds but is now also manufacturing gold and platinum jewellery studded with diamonds and precious stones. %% The Group which has won export awards from the Gem & Jewellery Export Promotion Council for eight consecutive years has forayed into many countries, including Japan, Israel, Belgium, Thailand and others. %% "We ventured into China long time back. We are in fact now expanding into jewellery and diamond operations in China." %% "We are also in the process of constructing one more factory with an additional 10,000 sq. ft. area in our diamond section in Shenzen in China. At least 850 people are working in our operations in China," disclosed Sanjay Kothari. The KGKs are not lagging behind in retail sales. "We have got four retail outlets in China. We plan to set up 18 more during this year," he said. In India, it is more of a B2B level rather than retailing. %% Also into branding, KGK jewellery is sold in China under the brand name 'Entice'. %% Talking about the advantages of establishing in China {{Sanjay Kothari }}stated the following: $${[Though labour is expensive in China, "but the productivity, that is, the output of each worker is definitely more than India." ]["Today India has all the technology and brains to work; it is just a matter of experience. China has more experience in the manufacture of jewellery compared to India. The jewellery sector of China is far ahead. Workers are far better and experienced." ][There is 17% VAT applied on local selling in China. There are companies that buy with bills and pay full VAT especially in Beijing, Shanghai, etc. ][The retail segment is stronger in China. "There are retailers who do all official business. It is too big to tap so we are catering to that area." ][ A law is also likely to come up in China whereby foreign companies can invest directly into China. "Thus, all our operations would be fully in our control." ][ In both the Chinese and Indian markets, local consumption is increasing at a very high rate. "But I find it easier to sell in the Chinese market. The Chinese are new to diamonds and so the profit margins are much higher. While India is a very mature market and are very well aware of diamonds." ][ In China the design factor is not so high. "The main focus is now on diamonds of a standard quality. Solitaires are more preferred. But in India there is a vast difference from north to south and each area is determined by a different design factor." ][ While China is a mass consuming market, the design and the quality is more or less the same in the whole country; so it is easier to work there. ]}%% "The production of jewellery is divided into two segments - the middle segment and the lower segment. While the lower segment is manufactured in India, the middle segment is produced in China. %% "If there is demand for very high quality and the client is prepared to pay the price, then we also get it made in Hong Kong. In India we do more mass production and cater to the US market. We sell high-end jewellery in the range of US$20,000 to $200,000 to the Middle East and Gulf markets," said Kothari. %% Speaking on diamond manufacturing, Sanjay says that there is no comparison between India and China where "diamond manufacturing is concerned. China is far behind."
During the Hong Kong Show {{Diamond World}} spoke to some of the Indian manufacturers in China who participated in the Show. %% Throwing light on the exhibition Tony Mehta of Diasqua International Ltd. said: "The Hong Kong Show turnout has been very good. The first two days were fantastic. The main attraction in this has been that there were maximum buyers from India. Many retailers from Delhi and other regions visited the Show. It is very good that they are getting into imports". %% "Labour in China is not cheap but more efficient. Hence, the output is better. This makes the nett cost per piece lesser," explained Tony Mehta. %% "We are trying to promote our jewellery and watches in India. Though I am not so confident about jewellery making a big success there but watches have a big market. We are also working on the lines of a tie-up with people in India who will market our watches in the country," he concluded.
India and China Biggest Markets:
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The Karp Group another stall holder at the Hong Kong Jewellery Show, is a major player in the diamond market for over three decades and an ISO-certified company. Ramesh Virani of Karp Jewellery Manufacturing HK Ltd. was highly optimistic over the future of trade in Asia. "Asia has a great future since all the international companies are focusing on Asia in a big way," he said. %% "India and China by far are the world's biggest markets for jewellery as far as consumption in the future is concerned." %% With all focus centered on tapping this market, Karp has eight retail showrooms in Hong Kong, two in China and four in Taiwan.
"We are manufacturing high-range jewellery in China. We basically manufacture fancy diamonds and use the same in our jewellery too. The craftsmanship is better here as they have been manufacturing jewellery for over two decades. We also make client-specific jewellery in the range of US$1,000. More than 200 people are working at our factory in China targeting Asia and the US high-end market. We believe in quality production and the Chinese professional labour provides it. Then we have 10 exclusive designers in our jewellery unit. %% "As far as expansion is concerned we are also in the process of setting up a big factory for jewellery-manufacturing in Surat in Gujarat. We also manufacture TRISTAR cut of diamond which is a patent cut. We have also opened one showroom in Hyderabad by the name of TRIA," he added.

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