J K Diamonds Institute of Gems & Jewelry organised a successful Convocation at The Lalit, Mumbai. The convocation was preceded by Knowledge series and panel discussion on Domestic and Export Jewelry markets.
This blog covers the presentation on the jewelry export market which was presented by Mr. Viral Kothari, Managing Director at Fine-Jewellery, an established jewelry export house @ SEEPZ, Mumbai.
Gems & Jewelry Export Segmentation
India is one of the highest exporters of the gems and jewelry industry. The overall net exports of gems and jewelry stood at US$ 35.59 Bn during FY2016-17 registering a growth of 9.07 percent over FY 2015-16 (Source: IBEF). The exports of cut and polished diamonds constitute the highest among the total exports from India followed by Gold jewelry.
With respect to jewelry exports, Seepz, located in Mumbai is a Special Economic Zone (SEZ), wholly focussed on the manufacturing of export-oriented jewelry. Below data extracted from SEEPZ gives you a clear picture of the important countries where Made in India jewelry is exported. The USA is one of the major markets for diamond jewelry wherein 40 percent of the diamond jewelry is consumed.
SEEPZ is not the only manufacturing zone in the country. Others include Surat (diamond manufacturing/polishing units), Noida (small jewelry manufacturing units) and Jaipur (Gemstone polishing and trading).
EMERGING EXPORT MARKETS
Apart from major markets for jewelry such as US, China, etc. as covered above, there are several emerging/upcoming markets for jewelry consumption.
|South America||Mexico and Brazil|
|Eastern Europe||Poland, Romania, Czech Republic and Scandinavia|
|Far East Asia||Singapore, Indonesia and Malaysia|
These are among the fastest growing economies, apart from India itself. The rise of per capita income, especially the rise among the middle-income group coupled with the millennial splurge on luxury purchases is driving growth in these markets.
EXPLORING MARKETS: ENTRY STRATEGY
There are several aspects to be considered before you commence manufacturing for a particular market. Understanding the country’s culture, macroeconomic conditions prevailing, customer preferences etc. is essential for a successful penetration.
- Country research
Before entering a market for exports, research on certain economic attributes such as GDP, average income, and gender ratio gives a better perspective of the scope of luxury purchases in the country. This information can be availed via basic desktop research/web analysis.
- Entry Barriers
A thorough research must be undertaken on government compliances in the country of export. These would include duties and taxes such as import duty, the due dates for payment of such duties among others. An attempt should also be made on finding out the local manufacturing presence and their market share. This would assist in understanding the scope for gaining market share.
A survey must be conducted to identify the main players in the jewelry industry, from a supply side as well as retail/eCommerce sides. This will also help in identifying prospective customers.
An analysis of the product mix should also be undertaken, including gold purity, diamond qualities generally preferred by end customers and design preferences. Every region has its own uniqueness in terms of design and understanding the same can be path-breaking.
The next ideal step would be to approach prospective customers that have been identified from the above research. LinkedIn contacts can be leveraged in this case. Hence, it is important to keep an active and updated LinkedIn profile as it is one of the best ways to connect with professionals across the world.
However, the most suitable way of building contacts would be to attend and participate exhibitions and workshops that take place in the target market. Several wholesalers and retailers generally attend such events with the motive to source quality products as per customer preferences.
Once contacts have been established, an introductory email along with the product portfolio should be sent to the prospective customers requesting a meeting with them. An important point to note here is that the product portfolio should NOT generic but should be specific to the country or region based on the research on product mix and design preferences. This will make your approach more relevant to the receiver.
- Risk Management
Background checks on customers have become as important as bagging new customers, if not more. This should be done before commencing work on a new customer. In light of the recent scams hitting the jewelry industry, background checks are necessary to understand the creditworthiness of the customer. Few references that can be used for such checks are D&B reports, Hoovers, Societe.com among others. Part advance payments is one of the options to mitigate credit risk.
GLOBAL TRADE SHOWS
There are several important jewelry shows across the globe. Few important shows conducted on a large scale are tabulated below. Visiting these B2B trade shows not only helps build contacts across the jewelry value chain but is also a great learning in terms of understanding the world markets and their cultural impact on jewelry designs.
Depending upon the target market and one’s own manufacturing capabilities, it may be a good starting point to attend or even participate in these exhibitions depending upon budget constraints.
Part 2 of this blog will cover Domestic Markets (India perspective). Stay Tuned!!
The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.