jewellery industry in hong kong

8/12/2019 Jewellery Industry in Hong Kong

1/6

India in the Global Context

The size of the global Gems and Jewellery industry was estimated at US $ 146

billion at retail prices in 2005, and is estimated to have recorded US $ 170 billion

in sales in 2008. The industry has grown at an average Compounded Annual

Growth Rate (CAGR) of 5.2% since 2000.

India is one of the eight key world markets, the others being the USA, UK, Middle

East, Turkey, Japan, Italy and China. India is the also the largest consumer of gold

in the world, and is estimated to hold nearly 16,000 tones of gold, accounting for

nearly 12-15% of the worlds cumulative above ground gold stocks. India is also

the largest diamond cutting and polishing centre in the world.

While a predominant portion of gold jewellery manufactured in India is for

domestic consumption, a significant portion of rough, uncut diamonds processed in

the form of either polished diamonds or finished diamond jewellery is exported.

The manufacturing and processing of Gems and Jewellery is distributed across

several countries in the world (i.e., the African continent dominates the mining

space of diamonds whereas India is the dominant player in diamond processing).

Apart from being a major market, India primarily forms a part of the polishing and

jewellery manufacturing part of the industrys value chain in addition to increasing

traction in the organized retail of jewellery.


2/6

Jewellery Industry in Hong Kong Hong Kong's jewellery industry is dominated by the precious jewellery sector. Its

development has been facilitated by the expansion of the local market, including

sales to tourists.

Jewellery production in Hong Kong encompasses a wide range of medium- tohigh-priced products. Hong Kong manufacturers are good at producing small

stones fashion jewellery. Hong Kong is leading in the production of pure gold

items, and has long been recognized as a major centre for the production of jade

jewellery. It has also evolved into a leading trading and distribution centre for

pearls in recent years.

Although high value-added processes are still retained in Hong Kong,manufacturing processes are increasingly shifted to the Chinese mainland, mainly

to Shenzhen and Panyu, by means of building factories or outsourcing. Meanwhile,

more manufacturers have made use of computer-aided design to shorten the time

cycle for product development.

Under the Mainland and Hong Kong Closer Economic Partnership Arrangement(CEPA), the mainland has given all products of Hong Kong origin, including

jewellery, tariff-free treatment starting from 1 January 2006.

Industry Features*

Hong Kong's jewellery industry can be broadly classified into two sectors:jewellery made of precious metal and imitation jewellery. In terms of value, some

86% of Hong Kong's total exports of jewellery are made of precious material.

Hong Kong's jewellery industry is known for its flexibility in accommodating

customer needs. Production of fine jewellery encompasses a wide range of medium

to high-priced products. The most popular product category is gem-set jewellery,


3/6

particularly diamonds set in 14K or 18K and yellow/white gold. Hong Kong

manufacturers are good at producing small stones jewellery with elements of

contemporary fashion. Their gem-setting skills and design capability are

competitive compared with world-class European manufacturers. Hong Kong has a

highly skilled and productive labor force capable of handling small orders and

making elaborate designs at reasonable prices. The overall technology level of the

precious jewellery industry is perceived by manufacturers to be above competitors

like Thailand but below the world leaders such as Italy and Japan. Most notably,

Hong Kong is leading in the production of gold items. Although high value-added

processes are still retained in Hong Kong, manufacturing processes are

increasingly shifted to the Chinese mainland, mainly to Shenzhen and Panyu. Hong

Kong has long been recognized as a leading centre for the production of jade

jewellery. Major items are bangles, rings and pendants. Hong Kong has also

evolved into a leading trading and distribution centre for pearls in recent years,

partly due to the fast emerging Chinese and South Sea pearl industry and the recent

decline of the Tahitian pearl industry.

Performance of Hong Kong's Jewellery Exports^


4/6

Despite the global economic slowdown, Hong Kongs exports of precious

jewellery remained resilient in recent years. Yet after expanding by 35% in 2011,

export growth moderated to 14% in 2012. While prices of precious metals and

stones have surged, exports in volume terms actually registered only a mild

increase. The US and the EU remained Hong Kongs dominant markets for

precious jewellery, accounting for some 47% in 2012. But their market shares have

decreased from some 57% in 2010, as sales (in value terms) to these two markets

have been slower than average. By contrast, Hong Kongs exports of precious

jewellery to India saw remarkable expansion these years, growing by 531% and


5/6

101% in 2011 and 2012 respectively, amid Indias emergence as a jewellery

producer which subcontracts to the Chinese mainland. Besides, exports of precious

jewellery to UAE also saw impressive growth of 48% and 85% in 2011 and 2012

respectively, as UAE has developed into a diamond hub for the region. On the

other hand, Hong Kongs exports of pearls, gem-stones and rough diamonds

dropped 8% in 2012, after strong growth of 31% in 2011. Hong Kong's jewellery

exporters are facing intensifying competition from suppliers in the Chinese

mainland and other countries, particularly India and Thailand. This, together with

the price fluctuation of precious metals, diamonds, precious stones and materials,

has somewhat trimmed down their profit margins. Yet, compared with other

industries, jewellery makers are already in a better position to pass cost increases

onto buyers and end users if they are caused by price surges of precious materials,

which make up the most part of a jewellery article's value. On the other hand,

overseas retailers and importers often press Hong Kong suppliers for extended

credits, exchange for unsold items, shorter delivery lead time and better designs.

The impact of the RMB's appreciation on the precious jewellery industry is modest

compared with other industries because mainland content only accounts for a

relatively small part of a jewellery article's value, compared with costs of precious

materials, which are primarily imported into the mainland for export processing.

On the other hand, Chinese governments policy on encouraging consumption will

continue to shore up the purchasing power and import appetite of Chinese

residents, and facilitate the sales of jewellery articles to the mainland, as well as

retail sales in Hong Kong contributed by Chinese visitors.

Hong Kong is the world's second largest exporter of imitation jewellery after the

Chinese mainland. In 2012, total exports of imitation jewellery amounted to


6/6

HK$8.9 billion. Unlike fine jewellery, imitation jewellery is rarely domestic-made

but re-exported from origins outside Hong Kong, notably the Chinese mainland,

which accounts for 93% of all exports from Hong Kong. In 2012, exports of

imitation jewellery dropped 1%, after increasing by 7% in 2011.

jewellery industry in hong kong

Documents