The Chinese Government policies in cracking down on corruption have greatly affected the spending habits of top end Chinese buyers. This has affected Opal and jewelry sales and also Gambling habits in Macau. As stated by Wayne Sedawie from observation at recent Hong Kong Jewelry show in March 2015
The Hong Kong show was titled TREASURES
- Treasures of Nature
- Treasures of the Ocean
- Treasure of Craftsman
The show had many seminars to attend with the most interesting ones being about emerging markets in china and Dubai.
Dubai was very positive and reported sales increasing.
Seminars about china explained how anti-corruption polices had changed buying habits in last 6 months. Reports of jewelry retail sales crashing 25% to 65%
The seminar explained how jewelry shops in Shanghai are so expensive to operate that most do not make money but is branding for shops in tier two or tier three cites.
China trade shows
It is always very difficult to gauge how good shows are in china as no one wants to give confidential inside information away. But the general comment is that Anti-corruption policy has meant that people do not want to be seen buying extravagant jewelry or top end items like fashion bags etc.
Even the gambling Mecca of Macau has reported drop of nearly 50% in their gambling casinos. The general comment is that only one in four trade shows are profitable now in china.
Some Chinese companies that do trade shows each week , confirmed that sales were horrific in china and most shows they lose money on and maybe one in four has been ok.
Hong Kong show
Most sellers experienced slower sales from main land china buyers and most buyers preferred crystal opal and few collectors bought black opal specimens.
Many Gemstone sellers reported low offers from china mainland buyers
Established companies did good repeat business with customers but new sellers had no customer support and had low sales
Cost of Trade shows
Many Sellers did mention high cost of doing shows and that average booth selling $50,000 that costs are so high now and costing around 25% to sell at these shows ,and plus fact that’s 5 day show actually takes 9-10 days work for two people.
This really makes online selling a better option as costs to sell online are only 5to 10%. Top end buyers were at show but discreet as they do not want to be seen spending on high end items
The busiest booth was Japan Auction House. This company is selling second hand or estate opal and gemstone jewelry from Japan. They buy at auctions in Japan and many buyers would make comment that their prices are half of the opal sellers with many bargains to be had.
Another company had offers on diamonds and booth was always so busy with buyers pushing hard to get in front just to get served.
Tucson gem show
Comments from sellers who do Tucson show and HK show reported top sales to Chinese buyers last year ,but this year did not buy due to anti-corruption policies this year.
One seller reported record tanzanite sales last year from Chinese buyers and this pushed prices up
But Chinese buyers spent around 80% less this year and tanzanite sellers were surprised at such extremes in sales in 12 months.
In the last few years Chinese buyers have been strong in the opal and gemstone industry and this pressure has increased all over the world. From sapphires to tanzanite and opals as buyers have been strong at western trades shows all over the world.
Even online sales on Opal Auctions has seen many black opal buyers with Chinese names buying in Australia of USA and selling in china as private buyer or opal dealer
The big question is are we seeing a fundamental change in buyer patterns?
Retail sales in china jewelry now average us$ 150 to $200 so cost of the average opal or gemstone is only around $ 20 to $50
Chinese are now talking that buyers are in stage two
Stage one was excessive spending from boom days and corruption and that will never return and to prepare for stage three sales which is when low income 800 million farmers will start to buy jewelry at low end
Australian trade shows
Last season Chinese buyers were strong in shows at lightning ridge and Gold Coast and top sales were to Chinese buyers and will be interesting this year if these buyers return with same amount of cash?