- RESTEC JUNWEX

Transcription

- RESTEC JUNWEX

1
J E W E L L E R Y RU S S I A
№ (9) April, 2013
Official
REPRESENTATIVE
in Russia
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Contest
Recognition
of St. Petersburg
Russian
Jewellery Market:
Analysis of Customer
Behaviour
Russian Jewellery
Trade Club
me
o
lc ssia
e
W o ru
t
Ekaterina Chugunova
Senior Sales Manager
RESTEC JUNWEX Media-Holding
E
YOUR GATEWAY INTO
THE RUSSIAN JEWELLERY MARKET
XII International
Jewellery Show
XXII International
Jewellery Forum
Junwex
JUNWEX
29 May — 2 June, 2013
5–9 February, 2014
New Russian Style
All-Russian Exhibition
Centre, Moscow
St. Petersburg
IX Jewellery
Wholesale Trade Fair
Junwex Moscow
Junwex Watch
LENEXPO,
St. Petersburg
14–18 September, 2013
All-Russian Exhibition
Centre, Moscow
Media-Holding RESTEC JUNWEX
www.junwex.com
For further information:
+7 812 303 98 60
[email protected]
Necklace GRYOZY (Reveries)
KAST Jewellery Factory
St. Petersburg, Russia
Dear Readers!
L
Valery Budny,
Head of Media-holding RESTEC JUNWEX
et us introduce you the latest issue of international edition of JUNWEX Jewellery Russia Magazine – a project of RESTEC JUNWEX
Media-Holding, JEWELLERY RUSSIA Publishing House and RUSSIAN
JEWELLERY TRADE CLUB.
This issue includes the most interesting and actual for international
jewellery market information: analytical reviews, comprehensively characterizing jewellery business in our country, and articles about operational
experience of foreign companies on the Russian market, as well as interviews with representatives of the industry reflecting prospects of cooperation with foreign partners.
JUNWEX Jewellery Russia, established by the RUSSIAN JEWELLERY
TRADE CLUB and RUSJEWELLEREXPERT Consulting Agency is the most
distributed and reliable В2В edition in the Russian jewellery market. The
target audience of the magazine are investors, CEOs, commercial directors,
top-managers, heads of sales departments, commodity researchers, jewellery enterprises of small, medium and large scale, and everybody who is
interested in further development of business in the jewellery industry.
The magazine JUNWEX Jewellery Russia is distributed:
• By address base of RUSSIAN JEWELLERY TRADE CLUB covering more
than 7000 most significant jewellery stores in Russia;
• by address base covering all manufacturing enterprises of the jewellery
branch;
• Among participants and visitors accredited for all JEWELLERY RUSSIA
PROGRAMME Exhibitions;
• by VIP-mailing (state officials, regional administrations, business elite);
• by subscription.
The materials of this edition represent the whole range of information
relevant for jewellery business.
JUNWEX Jewellery Russia is a professional tool for establishing partner relations and effective promotion of business. We are sure that every
reader of the English edition of JEWELLERY RUSSIA Magazine will find on
its pages not just interesting but also necessary and helpful information
regarding the Russian jewellery market.
JEWELLERY RUSSIA Publishing House is a recognized leader in the market
of mass-media industry in terms of volumes of publishing: 2 500 000 hard-copies
of B2B JUNWEX Jewellery Russia magazine annually and this figure is constantly increasing. It also publishes B2C “The Best Adornments in Russia” magazine
(155 000 copies, 8 issues per year) which gives the key information about the latest trends in jewellery industry. In 2012 a new edition was launched — JEWELLERY BESTSELLER. It is a catalogue of the most demanded jewellery collections
on the Russian market, a indispensable directory for the retailer.
JUNWEX — Jewellery Russia Magazine
is the official media partner of CIBJO
(World Jewellery Confederation) in Russia
EDITORIAL BOARD
V. Budny,
Head of Jewellery Russia Programme
B. Borisov,
First Deputy Director of Russia Assay Office
O. Mironova,
General Director of RusJewellerExpert Consulting Agency
A. Gorynya,
Chairman of Russian North West Union of Jewellers
G. Kovaleva,
Chairman of Judges of a Jewellery Contest
within the Jewellery Russia Programme
G. Cavalieri,
President of CIBJO
D. Percossi Papi,
Jewellery Designer, Italy
T. Noskova,
Deputy Chief Editor
V. Puryguin,
Director of Jewellers Guild GOLDEN RING of RUSSIA
K. Avakyan,
President of FORMIKA Company
V. Meshalkin,
Federal Jewellery Holding GOLDEN STANDART
ESTABLISHER
Russian Jewellery Trade Club
RusJewelleryExpert Consulting Agency
EDITORIAL STAFF
V. Budny, Publisher
T. Noskova, Editor-in-Chief
I. Fedorova, Script Editor
J. Runova, International Department Editor
A. Dobrov, Art Director
J. Ribalova, Designer
V. Revelisov-Krumer, Project Director
L. Lebedeva, Proofreader
A. Vasilyeva, Subscription Department
A. Andronova, Circulation Department
I. Kadzhaya, International Department Manager
ADDRESS
12 Petrozavodskaya St., St.Petersburg, 197110, Russia
Tel.: + 7 812 303-98-60, +7 812 320-80-99
E-mail: [email protected]
www.junwex.com
Printed by ScanWeb OY,
Korjalankatu 27, 45 130, Kouvola, Finland.
5 000 copies.
Materials are not returned and not reviewed.
All rights reserved. No part of this publication may be reproduced
in any form without the written permission of Jewellery Russia Magazine.
Reference to the journal is required.
Jewellery Russia Magazine is registered by Federal Service for Supervision
of Legislation in Mass Communications and Protection of Cultural Heritage
in the Russia’s North-West Federal District.
Registration Certificate PI #FC2 — 8476.
Editorial
Events
4
6
18 30 40 JUNWEX St. Petersburg
Recognition of St. Petersburg Contest
JUNWEX Moscow
Russian Watch Salon JUNWEX Watch
JUNWEX New Russian Style
Jewellery Market
22 Russian Jewellery Market: Current Situation
and Analysis of Customer Behaviour
26 One Step Forward, Two Steps Back
51 Market Environment
Analytics
11
44
48
Golden Hopes of Jewellery Business
Where Next for Retail Chains?
Production Reacts to Demand
Expert opinion
Jewellery Trade
14 36 38 16
32
Gateway to Russia
This Will Happen, You Just Have to Wait!
Russians Have Good Taste
Mysterious Ways of the Jewellery Trade
4 | Events | JUNWEX Magazine
S T . P etersburg
The 21st edition of the “JUNWEX St.Petersburg” international jewellery exhibition
held recently in the Northern Capital — marking the industry’s first major forum
of the year — was the site of serious decision-making and the elaboration of
development plans for the immediate future.
Total expo area
26 000 m²
Number of exhibitors
639
Number of visitors
40 130
Number of trade visitors 18 932
(10% of whom were attending the
exhibition for the first time)
Events
T
he uncertainty typical of sceptics on the eve
of the exhibition was dispelled by the numerous buyers arriving at Lenexpo to take in the
city’s favorite jewellery show. “JUNWEX Petersburg” confirms: jewellery shops have a consumer,
though stiff competition and the increasingly
supply-packed market require new approaches
to that buyer. Certainly, the expo’s impressive
attendance figures were predicated on the unprecedentedly-broad advertising campaign organised by Media-Holding RESTEC® JUNWEX,
encompassing the involvement of almost one
hundred exhibitors.
Thus, the statistics indicate that there is indeed
demand. But is there supply? Of course there is —
and not just on the part of domestic enterprises.
This time, the Office of the Russian Jewellery
Trade Club emerged as the site of meetings with
the large delegation of Italian companies that
gave presentations of their capabilities for Russian partners. The series of briefs was kicked-off
by the company Jewels of Italy, which piqued
tremendous interest thanks to its platinum jewellery line. The Giansante brand demonstrated
specimens of “soft” bracelets made of metal elastics. Auraria unveiled some luxurious items at a
high price point. Energetic business negotiations
were held between the Italians and Russia’s major
market players on joint cooperation, touching on
the most pressing issues of price formation and
customs procedures.
The business program of “JUNWEX St.Petersburg” also encompasses the presentation of official awards to industry leaders from the Northwest
Federal District. The best companies received certificates of distinction from the General Director of RIA RusJewellerExpert, O. Mironova, and
Within the scope of the
exhibition, 170 people
representing 53 companies
from various Russian cities
underwent training.
the Chairman of the Northwest Jewellers’ Union,
A. Gorynya. This year, the honorary guest of the
official award ceremony was E. Fensky, Head of
the Northwest Inspectorate of the Russian Assay
Chamber.
This year’s exhibition was particularly abundant
in terms of festivities and fantastic gifts.
The forum’s event-packed program was
capped-off by the official award ceremony for the
winners of the XXI National Jewellers’ Competition for the Cultural Capital Prize “Recognition
of Petersburg”.
According to admittance-ticket proceeds, onethird more visitors registered at the 2013 expo
than last year.
Deemed a success was the circulation of
complimentary tickets on the official JUNWEX
expo website featured on the social networking
service vkontakte: roughly 1500 visitors, having
already picked out their favorite jewellery pieces
from among the new products showcased
on the group site, used them to attend the
exhibition.
|5
Recognition
of St. Petersburg
February 9, 2013 the award ceremony brought to an end
the work of XXI All-Russian competition for the jewellery industry
in the city on the Neva " Recognition of St. Petersburg 2013."
65 companies were involved in the final of the competition,
represented by 158 items. Work of the nominees were evaluated
by: Galina Kovaleva — Chairman of the jury of the Programme
"Jewellery Russia” competitions, the president of the International
Fund for Support of jewellers the "Form", Elena Ivanova — fine
art expert, head of the department of arts and crafts of the State
Russian Museum; Natalia Korovina — fine art expert, art critic,
Olga Kostyuk — Ph.D.in art history, senior researcher
of the State Hermitage; Larisa Peshehonova,
fine art expert, a senior researcher of the Moscow Kremlin,
Anna Ratnikova — fine art expert, senior researcher
at the Russian Museum of Ethnography,
Galina Smorodinova — fine art expert,
a leading researcher at the State
Historical Museum.
GRAND PRIX
Necklace GRYOZY (Reveries)
KAST Jewellery Factory
St. Petersburg, Russia
Events
|7
Jury strongly reacted to the choice of nominees, as the result, 48 of 158 products won prizes in 11 categories.
When analyzing various materials in presented works, the jury paid attention to the frequent use of colored gemstones by jewellery
companies. This season, the color palette used in products have become more intense and diverse, and the combinations more unexpected
and delicious. Jewellers began to pay more attention to rare stones. Mixing different facets and dimensions of stones in one product
allows you to create totally unexpected design solutions.
The jury is not always unanimous in choosing the highest reward, but this time Grand Prix was unanimously awarded by all the members
of the Jury to a unique piece of work — a necklace "Necklace GRYOZY (Reveries)", brilliantly executed by jewellers V. Ivanov and S. Sumenkov. Author’s design necklace of V. Chernova is one of the best works of the St. Petersburg School of Design. Diamond and gold lines
repeat or cross the wonderful rhythms of agate modules. Nature and man have created a unique graphic motives.
Bravo to the management of "Kast" company that provided an opportunity to its employees to create these masterpieces! Bravo to
golden hands of masters of St. Petersburg!
Exclusive products with colored stones
I place
Sets "Dawn", "Fire extravaganza",
"Beethoven"
The company "Diamonds of Kostroma"
(Kostroma)
I place
Sets Touch me..., La dolce vita,
The one, the collection "Marquis"
"Master Diamond" company (Kostroma)
Author: R. Vasiliev. Goldsmith: Maslov
Ring desing
Classics of XX century
II place
Collection "P.S. I love you"
The company "Miriada" (Kostroma)
II place
I place
I place
Ring with garnet "Facets of perfection"
Jewellery House "Alexandrov and Co"
(Barnaul)
Diamond rings of incomplete cut from
the collection Une Femme
Brand "RINGO" (Ekaterinburg)
Author: S. Korolev
Earrings "Choice", "Russian Beauty" from the collection of earrings
"Russian Fairy Tales"
Creative workshop "Dyko" (Kostroma)
Author: M. Moklokova
Goldsmith: I. Loktionov
II place
Set "Beep" from the collection "Russian Patterns"
The company "MUZ "Elite" (Moscow)
Jewellery experiment
I place
Collection Paleohit
"Workshop of Sahakyan"
(Moscow)
Author: Saakyan
I place
The composition "Him — Her"
Jewellery House "Chrysos"
St. Petersburg
Author: V. Demidov
Jewellers: V. Demidov, M. Shilin
The magnificence of jewellery
I place
Big Easter Egg "Presidential Jubilee"
Big Easter Egg "Presidential"
The company "Three A Gold" St. Petersburg
Authors: V. Josan, R. Kachanovsky, M. Ivanov;
Jewellers: V. Shvilpo, R. Korolev
I place
Dagger "Glimpse"
Author: A. Linnik,
Artists' Union of Russia
St. Petersburg
Fashion trends
I place
I place
Branded collection of rings
Jewellery House "Chrysos"
(St. Petersburg)
Set "Paradigma"
Earrings "Dream"
Jewellery House "Tulupov"
(Ekaterinburg)
Events
Best collection of mass production
I place
Collection of items with mother of pearl
and diamonds "Romantic elegance"
Jewellery Company "Cameo" (Moscow)
I place
Collection Bravo ("Bravo")
Jewellery Factory "Sanis"
St. Petersburg
The best piece of jewellery or a collection of the season
I place
Set "The Tale of the North"
"Simeh" (Yakutsk)
Author: G. Mahnachevsky
I place
Collections "Lace" and "Ocean"
"Rifesta-Holding" (Ekaterinburg)
I place
Collection Diamond Jeans
"Jewellery House of Kabarovskie" (Kostroma)
Author: A. Martynov
Modern historicism
I place
Set "Bliss" and decoration
on a velvet ribbon
Author: E. Kostrigina
St. Petersburg
|9
Religious items
I place
The image of Our Lady of Kazan
and the Cross "inviolable wall"
"Sofia embankment" (Moscow)
Authors: N. Sazhina, V.Cherkasov
I place
Lamp and icon of St. Nicholas
Authors: Dontsova and D.
Dontsov (St. Petersburg)
I place
Cross chest "Old Believers" and set "Early
Christian symbols"
"Workshops of Yuri Fedorov"
St. Petersburg
Author: Y. Fedorov
Jewellery and masonry plastic
I place
Souvenir "Great Russia"
Stand for pens "Quartet"
"Academy" (Taganrog)
Author: V. Ananich
Jewellers: А. Shebankov, O. Zavorin
I place
Interior decoration "For her..."
St. Petersburg Jewellery Factory
"Jewellers of the Northern Capital"
(St. Petersburg)
Authors: Kabukaev T., G. Grunberg
Jewellers: A. Skosogorenko, E. Vaganova
Analytics
| 11
Golden Hopes
of Jewellery Business
Growth in prices for metals has caused ripples on the surface of already
troubled waters of jewellery business: whether gold rivers run dry or not,
whether silver ones stay as affluent and whether or not the tributaries of
platinum or steel dilute them? Within the exhibition "JUNWEX St. Petersburg",
Analytical Department of RusJewellerExpert conducted their depth research
of jewellery production volumes, as well as established, where most often
the owners of jewellery factories moor — the gold or the silver coasts.
B
y February panic in the market retreated —
jewellers calculated last year's expenses,
weight risks and went to the exhibition with
cautious optimism.
More than half the jewellery companies are seeing an increase in the production volume in 2012 —
that was the answer of 58.5% of respondents. About
a quarter of respondents did not see any change —
27.3%. The decline of was admitted by only 14.2% of
the respondents. After the raging financial storm in
the fall it would be desirable to believe that the encouraging results show that the market is relatively
stable. Unfortunately, the statistics do not provide
full transparency: the deep waters of the jewellery
market hide many undercurrents.
World growth of prices for precious metals does
not stop: to replenish their gold reserves jewellery
plants have to invest more and more resources. In
other words, each new gold ring cost producers
more, and profitability is falling rapidly: cost part
is now growing faster than sales. The fact that
companies continue to boost production, proves
good accumulated reserves and sound business
strategy, but not of the occurrence of golden time.
It is also interesting to trace how and at what
items volumes of domestic jewellery production
increased, or rather, which metals Russian jewellery
factories prefer. A couple of leaders virtually have
no competition: gold and silver jewellery scored
39.6% and 31.2%, respectively. Non-standard solutions were supported by less than 20% — Russian
factories are not interested in the development of
market of palladium jewellery or steel. But high
quality jewellery has got its share of mind — it is
referred to 14% of respondents. It draws attention
the fact that manufacturers mention an increase
of gold range primarily, while an increase in the
market silver jewellery has been the main trend of
recent years. A similar trend can be noted in the
wholesale trade: 36.0% of representatives of retailers reported an increase in sales of gold products,
34.7% — silver. In order to draw the right conclusions from the growth of the production volume of
more expensive market segment, it is necessary to
consider the problem from different angles.
Silver outlook
How the Russian market of silver jewellery has
changed can be measured by the "silver" pavilion
at the February exhibition "JUNWEX Petersburg":
Things in a small building were humming, and the
list of participants in comparison to last year was
12 | Analytics | JUNWEX Magazine
% growth of silver jewellery
volume in 2012 compared to 2011
27,3
14,2
% 58,5
increase
decrease
no change
% growth of jewellery
volume in 2012 compared to 2011
gold
6,1
silver
which gave a strong impetus to the development
of the silver sector. Appeal to a more democratic
metal was not only an effective way, but also very
popular, having significantly raised competition
among producers of silver. As a result, a fresh solution gradually lost its freshness, which partly explains the slowdown in production volumes. Those
who would like to work with silver, has already begun to do so. In turn, increased competition hit the
"indigenous" silver market sectors — small business
initially specialized in more democratic products. If
large companies renew range, repeating their gold
collection in silver metal, small firms have to invent
more and more new models to stay competitive.
Opposing if not the expulsion, then to the pressure
from large jewellery factories, many companies are
forced to develop new market territories. Some
change technology, some are looking themselves
in private orders, and others are moving away from
silver to more democratic jewellery or even refuse
production, switching to wholesale purchases of
mainly imported jewellery.
These internal market processes do not affect
consumer preferences: According to RusJewellerExpert, 36.6% of respondents — visitors of
"JUNWEX St. Petersburg" came to buy silver jewellery — it is 12% more than last year. Silver jewellery
market remains very promising, although not so
easy, what seemed a few years ago.
If you really want ...
14
2 0,7
3,2
%
39,6
platinum
steel
palladium
31,2
non-precious metals
other
filled with many well-known names. This is not
surprising. During the last global crisis, silver has
become a lifesaver for many Russian companies,
The situation with gold sector is also difficult.
Rising prices for this precious metal is headache
for jewellers all over the world, and the international debate on the issue are more like a reception at the district hospital, where patients share
medical advices. For example, in a French pharmacy prescription first item are products made of
gold lower than 9 K. Due to the small content of
the actual gold metal in the alloy — 37.5% French
ironically call it "gold of the poor", those who can
not longer afford more expensive jewellery, but "if
there is a strong wish, it is possible". From 2011 to
2012 the quantity of bought products from gold
of 9 K increased from 1,6 million to fantastic 4,1
millions. The French statistics for certain reflects
Analytics
growth of popularity of a gold segment in jeweller
counters, however in this case it is impossible to
forget that all that glitters isn't gold.
Though in Russia gold of 14 K remains the most
popular, is undoubted that thoughts of domestic jewellers go in the same direction — towards
technological innovations which will allow not
to reduce production, but to reduce its cost. The
example of chain making jewellery companies is
demonstrative: Such large Russian manufacturers
as "Adamant", USS, Krastsvetmet actively rely on
the promotion of hollow gold chains. There are
less grams of gold in these products, so their cost
is lower and therefore production is much more
profitable. At the last moment of the last year, the
first hollow gold ring appeared in Russia — December 12, 2012 Jewellery Factory "Unigold" has
issued a patent for the innovation. In the future,
the production of rings of hollow form will reduce
the weight of the product by 40-50%, which will
result in significant cost savings.
Crisis hardening
Having survived the first impact of the global
economic crisis, and a few years of financial turmoil and uncertainty, jewellers have established
themselves in the thought that the crisis — it is a
long time. It is useless to try to sit it out, wait, suffer
it through, or do something else with the prefix
"re-". It's time to learn to live with it. This means
that temporary half-measures are not enough:
managers of jewellery plants are ready to bring
major changes in the technology and begin to
work with other metals, to develop new concepts
and advertising strategies — that is, to include the
crisis in long term planning. This is confirmed by
enhanced collaborative work of enterprises with
RusJewellerExpert.
The fact that more and more manufacturing
companies are thinking in the long term, going
beyond the next 5-10 years, is a good indicator of
the growing vitality of the market. The times when
the jewellery business brought fantastic returns
with relatively little investment, have sunk into
oblivion, and with them those of a shell companies, which saw the jewellery industry as a way of
| 13
Plan you to pass your business
to the descendants?
yes
no, it is a risk business
35,6
7,5
%
42,7
I wish, but the heritors
are not interested
early to think about it
10 4,2
other
soft snap and were not prepared for difficulties.
Crisis and rapid growth of prices for metals have
provided these difficulties: In order to survive in
the current environment it is necessary to be literate and multilateral professional with flexibility,
creativity, thoughtful and analytical approach,
and tempering precious metals, also temper a
character.
The seriousness of intentions of the Russian
producers in relative to the jewellery industry
was decided to test asking whether the owners
of jewellery companies plan to transfer the business to children? The survey showed that jewellery makers are very serious about their jewellery
mission: Almost half of respondents — 42.7% see
their name engraved in the eyelids and plan to
pass their jewellery business to descendants. Only
4.2% of respondents deprived their children of
an inheritance saying that the jewellery business
is longer safe. 10% chose "yes, I would, but kids
are not interested." A considerable number of respondents were at all outraged by our question:
about 7% of the respondents returned the questionnaire, assuring that are not going to die. Such
combative mood among the Russian jewellers is
the reason to rejoice!
14 | Expert opinion | JUNWEX Magazine
Your Gateway to Russia
I
n 2012, reports of a vast quantity of high-quality
diamonds resting beneath a Siberian meteorite
craterrocked the diamond and jewelleryworld.
Such quantities of diamonds, reportedly numbering in the trillions of carats, couldsignificantly
alter the world diamond supply — and diamond
prices — for years to come.
Later it was revealed these meteorite-made diamonds, while twice as hard as normal diamonds,
are not of gemstone grade and, therefore,
would have little impact on the diamond
market, and this forecast is proving true.
Despite uncertain worldwide economic
conditions, retail sales of diamond jewelleryin 2012 reached a new high, growing
18 percent from 2010.
Given the demand for diamond jewellery, it is no wonder trade shows such as
JUNWEX St. PETERSBURG, held annually
in St. Petersburg, attract a wide audience. In
2012, nearly 50,000 visitors attended JUNWEX St.PETERSBURG, one of more than 100
diamond andjewellery trade shows that take
place each year across the globe and one of
five international jewellery shows produced
by RESTEC JUNWEX throughout Russia.
These showsdraw suppliers, dealers, retailers and others from around the world who
want to grow their businesses and explore new
opportunities in the Russian jewellery market.
Your Gateway to Russia
One of the most promising markets for
diamond jewellery is Russia, an area traditionally considered a logistical challenge for
trade show exhibitors. “Some people have
the impression that exhibiting in Russia is too
complex,” says Anastasia Senotrusova, who
heads Brink’s customer service department
in Russia. “While there are unique regulatory
factors to consider, there are ways to work
within these requirements to penetrate
a new market that is virtually untapped
by foreign companies; a market hungry for
new designs and new suppliers.”
One of the ways exhibitors can take
part in the country’s lucrative diamond
and jewellery business is to work with secure logistics experts such as Brink’s to help them navigate
the complexities of exhibiting in Russian diamond
and jewellery shows. “Brink’s Global Services pioneered secure trade show service for the diamond
and jewellery industries,” explains Senotrusova.
“Brink’s is a certified member of the C-TPAT
program, a joint government business initiative
to build co-operative relationships that strengthen
overall supply chain and border security.”
The benefits of working with Brink’s Russia are
many. First, members of the C-TPAT, or Customs
Trade Partnership Against Terrorism, program receive a reduced number of inspections, which results in shorter border times, an assigned account
manager, access to the C-TPAT membership list
and an emphasis on self-policing. Further, Brink’s
knows the process. Leveraging decades of experience and knowledge of customs regulations
and requirements worldwide, Brink’s can help
exhibitors with a variety of trade show services,
from door-to-door secure pick-up and delivery
and on-site security at the show to trade show
insurance and overnight secure storage. “Foreign
exhibitors may be confused by the ATA Carnet,
the customs process that governs temporary importation of goods for exhibition purposes,” adds
Senotrusova. “Although Carnet prohibits exhibitors from selling their goods at shows in Russia,
Brink’s makes bringing goods into the country
for trade shows seamless so potential buyers can
feel and touch real goods — an important step
in building long-term relationships, finding new
business partners and signing contracts.”
Another benefit to using Brink’s as your gateway to Russia is trade show support. Brink’s staff
members are always on-site, usually at a Brink’s
booth, to explain and help with emerging issues
and offer advice to customers. “There’s no substitute for experience, and Brink’s has the diamond
and jewellery experience to make exhibiting
at Russian trade shows a simple decision,” says
Senotrusova. “The opportunity is tremendous,
the market is ripe for new and exclusive jewellery designs and, with Brink’s, the challenges
of bringing trade show goods into the country
are virtually eliminated.”
Expert opinion
Planning on exhibiting at upcoming diamond
and jewellery shows in Russia contact Brink’s.
A qualified trade show expert will help you
through the customs process and serve as your
gateway to the Russian market which hosts exciting opportunities for those in the diamond and
jewellery business.
| 15
e-mail: [email protected]
Tel: +7-495-234-08-74
Fax: +7-495-775-62-52
16 | Jewellery Trade | JUNWEX Magazine
North Western
Federal District
1223 shops
Central Federal District
2786 магазинов
Urals Federal District
520 shops
Volga Federal District
662 shops
Far Eastern
Federal District
286 shops
Siberian Federal District
520 shops
Southern Federal District
597 shops
I
n many countries professional associations play
a very important role: similar business associations serve as a link between business and government, not just performing public functions.
They are actively involved in the distribution of
investments and decisions that affect the interests
of the industry. Cooperating with the government,
they give full support to the policy aimed at economic development. In addition, their work brings
valuable to community results in such areas as
professional ethics, scientific and market research,
statistics and information support. The club "Russian Jewellery Trade" took on challenging mission
on unification of market players in the Russian
jewellery industry. It is founded by the Russian
information-analytical agency "RusJewellerExpert"
with the support of regional public organizations
of jewellers.
There are well known jewellery networks from
different regions of the country among the members of the Club: "Russian Gems", "Gold of Yakutia",
"Elana", "Alvamani", "Aquamarine", "Golden Rus",
"Phianit", "Zlato Rossov", "Zanzibar", as well as large
jewellery shops: "RossYuvelirtorg" (Omsk), "Pearl"
Today the Club is the largest professional
association in the industry not only in
wholesale and retail trade, but also
manufacturing companies, which are
interested in the formation of the modern
market mechanisms and the development
of business cooperation and partnership.
Official representatives
of the Club are opened today
in the Urals, Central, Far
Eastern, Siberian and Volga
federal districts, as well as
in the Republic of Karelia.
(Angarsk), "Russian Gold" (St. Petersburg), "Golden
Rabka" and "Agate" (Ekaterinburg), Gold Infinity
(Vladikavkaz), "Clementine" (Apatity), "My sun"
(Khabarovsk)," Diamond Yard" (Ufa), "Diamond"
(St Petersburg), "IFC Company" (Novosibirsk),
"Nizhny Novgorod Jeweller" (Kstovo), "Art Salon"
(Petrozavodsk), "Crystal of the Dream" and "Silver
World" (Moscow), "Golden Chain" (Krasnoyarsk),
"Russian Jewellery Company" (Kaliningrad) and
many others.
Why do Russian consumers prefer shop, which
is part of the Club, and not sale outlets of competitors around? Taking care of customers, the Club
supports only reliable companies. High customer
service standards and offer of high quality products have become the main principles of corporate
retail chain. Club membership implies the absence
of false information with intention to disorient the
customer, in particular offering huge discounts on
initially overly inflated prices and features of inserts.
Belonging to a leading industry association proves
the professionalism and stability of the company, so
participation in the federal action "Buy in sops of the
"Russian Jewellery Trade" club provides such shop
with unconditional trust of customers. It is no coincidence that the best jewellery factories and dealers
Jewellery Trade
| 17
From January to March, 2013 over three
hundred owners of "gold" cards and about
a hundred owners of "platinum" cards
obtained re-accreditation in the Club.
of foreign companies cooperate with the club shops — who are the participants
of major exhibitions organized by the media holding "RESTEC JUNWEX".
The club developed a "Business & Leisure" program, to be visited by experts of the world's most important forums in the framework of the official
Russian delegation. Each trip is a great opportunity to give a new impetus to
the development of the company and also learn about the culture of another
country. Italian expression, Hong Kong scale or ancient Istanbul — everyone
can choose a program to suit the taste, and, most importantly, goals.
Club membership has two formats, confirmed by "gold" or "platinum"
cards, which is awarded to companies that consistently work in the jewellery market of Russia, and confirms the importance of the enterprise and its
belonging to the elite professional associations.
"Gold Card" proves higher specialist status of the holder and ensures
comfortable working conditions in all exhibitions of media holding "RESTEC
JUNWEX", as well as various bonuses by PH "Jewellery Russia" and the Training centre "JUNWEX". "Platinum" card proves VIP— status of the company
under the Uniform exhibition program "Jewellery Russia" and is issued to the
"gold" card holders, stable on the industry market for at least three years. The
decision on the issue of "platinum" card shall be made by the Board of the
Club. The owners of this card are associated members of the International
Jewellery Confederation CIBJO. This is a personalized document with identification number, which has a high degree of protection against forgery. "Gold"
and "platinum" cards are subject to annual re-accreditation.
Another successful project of Club — Annual federal competition "Reliable
Partner". Each participant of the exhibitions of the "Jewellery Russia" program
may provide recommendation to the organizing committee of ten trading
partners, proven excellent join work. Companies with the highest number
of votes from different suppliers become winners. "Reliable Partner" is a
competition in which it is necessary to go rounds and fight for places. It is
enough to be a conscientious wholesale buyer and to have as many vendors
willing to vote for you as possible. Awards ceremony is traditionally held as
part of the September exhibition "JUNWEX Moscow."
The winners of the contest "Reliable Partner 2012"
1. Jewellery salon GOLD, SP, Voloshina N. P. (Lesnoy)
2. Network of stores "Russian gold", SP Fedorenko A. V. (Protvino)
3. Network of shops "Yuvelirtorg", JSC "Yuvelirtorg" (St. Petersburg)
4. Jewellery House "Crystal" (Lipetsk)
5. Network of salons "Golden Alliance", SP Nazarova O. V. (Volgograd)
6. Network of shops "Ruby", SP Onishchenko N. A. (Stavropol)
7. TH "Golden Rus", SP Shevelev E. K. (Khabarovsk)
8. Network of shops "Zolotnik", LLC "Triton" (Yakutsk)
9. Network of shops "Sapphire", SP Soboleva L. V., (Ulan-Ude)
10.Network of shops "Precious Orchid", SP Shvetsova L. A. (Perm)
For the first time salons of hour trading participated in the contest,
the leaders of which were:
1. TC "Slava" (Moscow)
2. TD "Polet" (Moscow)
3. Hour design bureau Timelounge (Moscow)
RUSSIAN JEWELLERY
TRADE Club
RUSSIAN JEWELLERY TRADE Club is the
biggest business association at the Russian
jewellery market uniting more than 6500
wholesalers and retailers from 806 cities of
Russian Federation.
Business activity
Buy at the stores of RUSSIAN JEWELLERY
TRADE Club — Integrated corporative action
for strengthening Club members’ competitive
ability.
Business Contacts Exchange — Establishment
of business links between manufacturers and
trade companies to arrange active supplies
to the jewellery stores of Russian Jewellery
Trade Club.
Regional project — Russian Jewellery Trade
Club supports regional shows within the
framework of Jewellery Russia Exhibitions
in Ekaterinburg, Kazan, Kalinigrad, Kostroma,
Makhachkala, Perm, Samara, Yaroslavl. The
main purpose is to represent the interests of
the Club members in regions by developing
and maintaining customers loyalty.
Cooperation with RUSSIAN
JEWELLERY TRADE Club
Buyer’s Programme — delegations of trade
visitors;
Direct-marketing — a program specifically
designed to build the booth traffic;
Match-making service — Business Contacts
Exchange — assistance in scheduling the
business meetings.
Tel./fax: +7 (812) 235 83 83
E-mail: [email protected] | www.junwex.com
M o s c ow
2012
Exhibition area
37 710 m2
Number 715 companies
of exhibitors
Total number
of visitors
39 347 people
17 961 people
Number
of trade visitors
Events
| 19
“J
UNWEX Moscow 2012” has tallied the results
of its annual JEWELLERY RUSSIA Programme,
setting the trajectory for future industry growth.
Participation in the exhibition represents a key
event for market players, demanding their concerted mobilization of all available resources. Aside
from the commercial tasks that were quickly addressed by the many exhibitors and invited trade
specialists during the first days of the expo’s work,
important factors determining the success of today’s business include open professional communication, the discussion of pressing issues, and the
formulation of a strategy for ongoing cooperation
within the retail-supplier system.
The attendance of trade representatives from
different Russian regions is the most objective
indicator of the current market climate: where
there’s demand for precious jewellery, the retail
sector tends to activate. In this connection, it was
particularly heartening to see some new faces at
the exhibition: this time, the proverbial address
book of the Russian Jewellery Trade Club was augmented with the contact information of almost
four hundred separate companies. A key role in
attracting regional market players to the federal projects implemented under the JEWELLERY
RUSSIA Programme, as well as in improving the
operating standards of individual jewellery stores
located in the country’s most far-flung corners, is
played by the Club’s representative offices. It would
be difficult to overstate, for example, the activities
conducted by the Ural branch headed by N. Lysko.
The results of this work were showcased by the expo’s now-traditional Ekaterinburg Jewellers’ Day.
Participants of the roundtable devoted to the
particular nuances of Far East trade advanced
an initiative geared towards facilitating the more
convenient coordination of regional chains via
relocation of the Club’s Far East representative
office from Yakutsk to Vladivostok, with office
operations headed by N. Tkachenko.
Worthy of increasing recognition is the Club’s international activity, namely the “Business & Leisure” programme. The
members of the Russian delegation, who were travelling to the
Hong Kong International Jewellery Show and had gathered at
the Club Office to discuss issues related to the upcoming trip,
were greeted by СIBJO President G. Cavalieri.
Alexei Shamaev,” CJSC Rubin (Volgograd):
“As a gemmologist, it’s extremely important for me to constantly improve my knowledge in order to
meet the highest professional standards, and the seminars put on by the Learning Center, particularly
those organised in conjunction with leading international institutions, help me to gain a well-rounded
understanding of the principles behind the appraisal of jewellery pieces. I was also attracted by the
opportunity to earn an IGI Diamond Grader certificate, which significantly boosts the market value of the
industry specialist. The classes fully lived up to my expectations. It was interesting to compare the Russian
and European work systems: our Western colleagues stand out for their deeply-professional, even
pedantic approach to diamond certification. What’s more, I learned a lot about the modern equipment
that our Western counterparts have been working with longer than we have.”
The business programme of “JUNWEX Moscow
2012” included events prepared by the organisers
and exhibitors alike. The conference entitled “The
Jewellery Industry: Marketing, Competitiveness”
served as the platform for a discussion of issues
related to the current state of the market. Production Alliance Kristall hosted not only a press
conference with the enterprise’s General Director
and Chairman of the Board of the Russian Association of Diamond Producers M. Shkadov, but also
Nadezhda Tkacheno, Mineral-1 (Vladivostok):
“I regularly take part in the seminars offered by the JUNWEX Learning Center,
and have always been happy with the results. The issue of training frontline
staff who directly interact with clients is particularly relevant to companies
based in the outer regions. Such classes make it possible to more effectively
pass on practical experience to local employees and elevate the overall
professional level of workers in the jewellery-sales industry. Complex
theoretical material is presented in a highly-accessible form and augmented
with vivid and memorable examples.”
a practical seminar in conjunction with Smolensk
Diamonds, devoted to the situation in the diamond
sector. The Gemmology Center at Moscow State
University organised a seminar entitled “Treating
Precious Stones,” while the Moscow Gemmological Center at the Russian State Assay Chamber arranged a presentation called “Reliable Assay-Chamber Certificate = Consumer Confidence.” Timed to
coincide with expo work were regularly-scheduled
meetings of the Board of the Jewellers’ Guild of
Volga-Vyatka Region and the Public Expert Council
of Federal Public Institution “Assay Chamber of
Russia at the Russian Ministry of Finance” on the
issue of “Strategic Objectives for Development of
the Jewellery Industry.” A presentation was held
by “ДГТС.РУ” (Certified Diamonds & Gemstones
Auction) — Russia’s first specialised Internet trading platform for the sale and purchase of certified diamonds, as well as other cut precious and
jewellery stones. In terms of its importance to the
Russian market for diamonds and precious stones,
this young yet ambitious project is comparable to
Diamond Dealers Automated Exchange (DIAMDAX). BigSoft hosted a complimentary information seminar entitled “Automation and Improving
Sales Effectiveness.” Aquamarin, in keeping with its
charted course, once again awarded its best partners with valuable prizes. The St. Petersburg-based
factory Russkiye Samotsvety organised a centennial. Prominent art historian and Senior Research
Associate at the State Hermitage O. Kostyuk introduced the expo’s participants and guests to the
best traditions of K. Faberge, which have found
their continuation in the artistry of the reknowned
enterprise’s distinguished masters. Retail buyers
visiting the company’s booth were treated to a daily
trivia contest held under the banner “Win a Prize
for Being Brand-Wise.”
The September session of the JUNWEX Learning Center also stood out for its phenomenal depth
and variety.
Events
The thematic range of seminars, training sessions and master classes encompassed issues related to visual merchandising and the nuances
of working with VIP clients, financial monitoring
and interacting with different oversight agencies,
conflict management and the relative effectiveness
of wholesale instruments, competition between
small shops and major retail chains, and counteracting consumer extremism.
The heightened interest of the audience was
captured by the special intensive course “Diamond
Diagnostics,” organised jointly by the Learning
Center and the International Gemological Institute
(IGI), at the end of which participants received the
official certificate IGI Diamond Grader.
Yet another fine tradition of the expo is Technologist’s Day. The events devoted to advanced innovation processes in the field of jewellery production
gathered a broad range of interested participants at
the Business Center of Pavilion № 69.
Artistry is an integral part of the jewellery industry. The most recent installation of the competition
entitled “Russia’s Best Jewellery” did more than
simply affirm the outstanding level of execution
mastery and sublime artistic taste of recognized
maestros of the jewellery arts — it introduced many
new and talented names as well. The official award
ceremony of the competition struck the final note
in the successful work of “JUNWEX Moscow 2012.”
The analysis of “JUNWEX Moscow 2012”
results and market monitoring conducted by
RIA RusJewellerExpert is thus far insufficient to
allow for a conclusion that the industry has finally emerged from the crisis. Yet, according to the
objective evaluation expressed by the majority of
expo participants and guests, “JUNWEX Moscow”
| 21
Jean-Mathieu Mangnay, Senior Instructor, IGI, Belgium:
“We are constantly expanding the Institute’s sphere of activity, and place
particular emphasis on the holding of courses and seminars throughout the
world, insofar as today, more and more people are interested in improving
their professional level in the area of gemology. The primary objective of the
three-day classes held within the framework of “JUNWEX Moscow 2012”
is to give Russian jewellers an understanding of our system of appraising
diamonds and the basic principles of working with them. This represents a
new operational format for us, and thanks to the exhibition’s fine organisation,
we were able to achieve significant success.”
Vyacheslav Darvin, Darvin Jewellery House (Kaliningrad):
“Our company is planning to start producing diamond pieces next year, which
is why I immediately responded to the Learning Center’s invitation to take
part in its gemological seminars. In order to speak the same language in
dealings with industry professionals, it’s important to immerse yourself in
the material and study the specifics of working with diamonds. I think I got
the most out of the time that I spent at the expo. The classes that I attended,
where theory was augmented with practical work, introduced me to a new
and fascinating world — one where I felt quite at home, despite the fact that I
was not a professional gemmologist. I was able to quickly and easily absorb
even the most complicated concepts thanks to repeated practical exercises.
The predictable difficulties in the translation of specific jewellery terminology
turned out to be quite manageable: the services of the standby interpreter
quickly became obsolete during the first lesson. As concerns the instructor, I was
completely dazzled by him. I’ve studied a lot in my life, so I’m in a good position
to evaluate the methodological level of instruction. Jean-Mathieu Mangnay is a
fantastic teacher, and I’m very glad that I participated in the training.”
was an indicator of the positive growth dynamic
of the jewellery industry as a whole. As indicated
by one exhibitor, the exhibition demonstrated
the converse law of the dialectic — the “shift
of quantity to quality”: whereas in recent years,
less was bought at a higher price point, quality is
now gradually shifting to quantity, the number
of consumers is steadily climbing, and the cost
of the pieces they’re buying isn’t falling!
22 | Jewellery Market | JUNWEX Magazine
Russian Jewellery Market:
current situation and analysis
of customer behavior
This market analysis was conducted by RusJewellerExpert on the basis
of polls and research done within the framework of the exhibition JUNWEX
Moscow-2012, Quarterly Reports of the Assay Chamber of the Russian
Federation and the Federal State Statistics Service, as well as materials
prepared by Executive Director of the Step by Step agency Olga Timofeicheva
for the Conference Jewellery industry. Marketing. Competitiveness.'
B
efore 2007, the jewellery market was one of the
fastest growing markets in Russia, with its annual growth up to 30%. The situation changed
in 2008. First decline in turnover was not significant,
but in 2009 the volume of production decreased
by 15%, mainly affecting the gold jewellery sector,
where the drop was 40%. A marked increase in production of goldware began only in 2012.
Jewellery of what kind of metal you prefer?
Non-precious metals
Platinum
Silver
Red gold
Gold
White gold
10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
According to the Federal State Statistics
Service, in 2011 they sold 20% more jewellery
than in the previous 2010, but this is in money
terms, solely due to increase in metal prices. At
the same time, the Assay Chamber registered a
decrease in the total number of manufactured
products by 9%, which in weight terms means
a 16% decrease in the volume of production.
Moreover, these figures were mainly due to the
changes in the sector of silver products, while
gold positions declined little — both by weight
and by number of pieces sold. During these
years, only production of palladium increased:
the volume of production in 2012 was 2 times
more than in 2008.
Jewellery does not belong to the category of
urgent products and is not a part of consumer
goods basket of the average Russian. Demand
for jewellery to a large extent depends on income, rate of unemployment and consumer
activity.
Reduction of income during the crisis
and entry into the Russian market by global
fashion market retailers have led to the fact
that the jewellery market came into a headon competition with the imitation jewellery
Jewellery Market
market. Before jewellery was considered to be
a good investment, now it only plays the role
of accessories.
Products of yellow gold 585° and silver 925° are
most popular jewels in Russia. People in Moscow
prefer white gold jewellery (according to poll conducted within the framework of exhibition JUNWEX Moscow-2012). In regions, they still prefer
products made of red gold (according to the data
from Russian Jewellery Trade Club).
As for the range of products, the bulk of the
market is occupied by jewellery without stones:
their aggregate share is 41%. The aggregate share
of products with stones is 37%; with most of them
are jewels with semiprecious stones, followed by
products with precious stones, while diamond
group products make up only 3% of the total. A
significant part is chains and bracelets — both in
terms of production volume and demand from
end customers.
According to surveys of Club members from different regions of Russia, the dominant positions in
the modern market of jewellery are low and low/
medium price segments; the share of high-price
and luxury segments is about 15 — 20% of the total
industry production.
For categories of jewellery, the ranking is as
follows: rings and earrings are still the leaders,
bought by 45% and 41% of customers respectively. Necklaces and pendants (30%) and chains
(28%) are less popular. 14% of respondents prefer
bracelets.
The study of demand revealed a growing demand for men's jewellery: cuff links, tie clips,
watches, and business accessories. However, sales
in this segment certainly cannot compare to the
sales volumes of women's jewellery.
On a geographical basis, there are two groups
of customer audience: metropolitan and regional
customers.
People in Russian province usually buy
stock-produced articles. These are people with
average income and traditional preferences.
Fortunately, they mostly rely on products of
Russian jewellery factories. Mass-market customer mostly likes lightweight casting products
| 23
(2.5 to 5 g earrings, rings, necklaces, pendants,
and chains).
The second group consists of those whose income is sufficient to evaluate not only the metal
the jewellery is made of, but also the brand and
exclusivity of products. These people more often
choose to buy imported products.
Rating of customer’s preferences
(by product groups)
9
28
18
Chains
%
19
Bracelets
Pendants
Earrings
26
Rings
Breakdown of retail sales in districts
of Russia
Far Eastern Federal District
6
11
%
12
33
North Caucasian Federal District
Northwestern Federal District
11
8
8
11
Age of buyers
10
4
22
20–30 years
%
33
Under 20 years
30–40 years
40–50 years
Over 50 years
31
Recently, the age of the customer audience
have changed. If seven years ago the main customers of jewellery stores were mature people
over 45, today the age limit is lower. According to
polls conducted in Moscow, this year the number
of buyers aged 20 to 30 years decreased to 22%,
and the number of buyers aged 30 to 40 years
increased to 31%; most solvent customers are 40
to 50 years old (33%). Survey taken by the Federal State Statistics Service has shown a slightly
different situation: 34% are young people aged
20 to 24 years; 29% are customers aged 25 to 34
years. Today's product mix in jewellery stores is
meant for all ages of clients ranging from birth (a
baptismal cross) to infinity! But most buyers are
people aged 20 to 50 years (86%).
How often visitors
What is the average sum of your purchases of exhibitions go
to jewellery shops
during exhibition
11
4
15
Under 1000 roubles
8
Under 5000 roubles
19
%
22
Under 10 000 roubles
29
25
19
%
Over 50 000 roubles
22
26
Once per month
Once in 2–3 months
Once in 6 months
Once per year
Once per several years
Jewellery Market
All this testifies that the audience is getting
younger, and the current generation is much
spoiled with a variety of attractive offers by brands
in other consumer goods markets. They receive
excellent service, bonuses, constant updating of
range by players in other markets, and increase
their demand. And we can only adapt to their
desire.
Market specialists call buying jewellery a
"low-frequency purchase". Thus, more than 50%
of customers buy jewellery once a year or less.
According to surveys of JUNWEX visitors who
certainly are the most loyal to this product, the
picture is somewhat more optimistic.
An important factor in the industry retail sales is
a high degree of seasonality of interest to the jewellery; the demand is high in pre-holiday days: New
Year's eve — Christmas and February 14 — March
8. These periods account for 80% of annual sales.
Traditionally, the lowest sales rates are in summer.
Jewellery market is a classic special case of the
"market of emotions". Marketing Agency Step by
Step offers classifying jewellery buyers by their
motivations.
According to RusJewellerExpert, design of jewellery is critical for 65% of customers. Almost 55%
of buyers, both women and men, pay much attention to price and workmanship.
According to marketing experts, main factors
affecting the client's choice of jewellery store
include:
• Location;
• Wide range of products;
• Quality of products;
• Promotional events/discounts available.
Jewellery trade loses to many other segments of
consumer goods market for strength and frequency of impact on a potential customer audience.
Manufacturers are reluctant to spend money on
advertising their products. Promoting jewellery is
mainly done by retailers. All sorts of promotions
and discounts are widely occurring in the retail
jewellery market. The technique of "discount" is
well accepted by customers and gives retailers the
opportunity to increase sales several times during
the campaign.
| 25
What influences on your choice when buying
jewellery?
Desire to invest
Preparations
for engagement, wedding
Necessity
of making a present
Giving a present
to the relative
Desire for which
I’ll try to find money
Availability
of free money
10% 20% 30% 40% 50%
On what do you pay your attention first of all?
Actuality
Design
Popularity
of the brand
Quality
Price
20%
40%
60%
80%
100%
One Step Forward,
Two Steps Back
A lot of things were expected of the year 2012 — an economic growth, a
leap in price of resources, an Internet revolution and a second wave of crisis,
a design breakthrough and a jewellery market restructuring after Russia's
WTO accession. Most expectations were not realized: through the last winter,
spring and summer the industry business was "put on hold", with a fragile
balance maintained. The recent years have taught Russian jewellers to save
money and energy, to exercise extreme caution and prudence, and to choose
proven promotion and advertising patterns. This strategy helped to overcome
the crisis, but did not lay basis for the future — jewellers continued to wait
for better times but in the end got a sharp drop of sales last fall.
Much ado about the WTO
One of the main amusements for industry
analysts last year was guessing about the fate of
domestic jewellery business after Russia's WTO
accession. Someone was preparing for emergence
of new competitors, and someone — for increase
in the cost of retail space. However, many experts
were sceptical about chances of success of Western
companies in the unfamiliar Russian market. The
most simple and obvious promotion pattern for
foreign jewellers is to find an authorized distributor who is familiar with the local context. This
promotion pattern has already been successfully
tested in Russia by many foreign brands.
Last August Russia finally became a member
of the WTO, but pulse of the jewellery market
remained equable. Perhaps the change is expected
in the following years, but now it is safe to say one
thing — no revolution in the market is going to
happen.
In first half of 2012, domestic jewellery business, in general, felt great security seeing no
threats. According to a survey traditionally taken by RusJewellerExpert in the JUNWEX exhibitions, most manufacturing companies have
found a way to restructure their work during the
crisis given the prevailing circumstances. 36% of
companies said the crisis had not had any material impact on them. Only 6% of manufacturers
said they had been fighting to come through the
adverse changes in the market. The biggest threat
for jewellers was seen in the growing raw material price — according to 50.4% of respondents.
42.2% were afraid of a decline in customer solvency, and 35.6% were afraid of a drop in demand
for jewellery. The fears were not idle: customers
did not have more money by the end of the year,
and the demand fell.
And the customers themselves were seeing
in 2012 with a fair share of pessimism. 45% of
respondents asked by RusJewellerExpert were
Jewellery Market
preparing for deterioration of their financial situation. 25% were going to save money, and 13%
— to invest in real estate. In both cases, jewellery stores were outside the financial interests of
customers. A huge proportion of spending was
pulled away by loans that are becoming increasingly popular.
How did your company survive in crisis?
Credit history
According to Sberbank statistics, this year retail
credit facilities increased by 41.6% as compared
to 2011. According to PF Ministry of Economic
Development and Trade, spending on apartments
increased by 22%, but they also need cars and summer residences; and foreign affordable resorts are
beckoning! Living on credit being well-proven
overseas draws people into a long-term financial slavery, and there is no place for luxury and
jewellery. Generational change among visitors of
jewellery stores can only add to the problem: loans
are more necessary and appropriate for young
people, while jewellery products are not promoted to young audiences as desirable and attractive
products.
According to RusJewellerExpert survey,
the "mass consumer segment" gave under the
most — 88.4% of respondents pointed out falling-off in sales. This blow was particularly painful for the companies: if demand for mid price
and luxury jewellery for the past few years had
been consistently low, it was the expensive jewellery that helped the producers to stay afloat
in crisis. Though the situation looked quite predictable, industry players were not ready to fight
for customers who can afford to buy jewellery
in theory.
Who is going to pay for the
lack of payment?
Customer behaviour has changed over the
past year: 77.6% of professional respondents said
the customer became more exacting. When assessing jewellery stores by a five-grade scale, as a
key buying factor, a good service was identified
by most customers (over 90%); less customers
(over 80%) mentioned a wide range of products
| 27
4
18
6
7
39
%
36
adopted
to new conditions
without any problems
heavily
still struggling
worst is still to come
other
Most actual problems for you in 2012?
Lack of employess
Bureaucratic barriers
High taxes
Lack
of operating assets
Low purchasing
capacity
Possibility of the second
crisis wave
Growth of prices
for raw materials
Decline in demand
0%
10%
20%
30%
40%
50%
Monitoring of labor market – mood of the buyers
13
Waiting for deteriorating
of situation
%
18
45
Saving money
Looking for a new job
in case of redundancies
Invest money
into real estate
25
Mass product sales in autumn 2012
8
4
decreased
%
increased
stable
88
Do you agree that branded product
can be sold for a higher price?
10
Yes
%
88
No
and (over 70%) a high-quality advice; while for
over 60% of customers, atmosphere in the store
was the bottom line. All this feedback relates to
the level of service — the Achilles' heel of the
Russian trade. But if more and more selling companies are ready to trade to put vases of flowers
and air fresheners in the display area, or bring
up adequate staff, the most relevant request of
the customer — to get detailed information —
often remains unsatisfied due to poor training
of salespersons. Only the best of the best trade
managers during the year paid attention to sales
staff development. And this is only 9% of jewellery retailers, an order less than, for example,
for makeup retailers.
On the prospects
of advertising
The jewellery business cannot be accused of a
total blindness: about 61% of specialist respondents from Russian Jewellery Trade Club said this
year the customer has become more responsive
to advertising. Manufacturers support retail: 88%
of factory representatives were convinced that
branded goods would be sold better than products
that were not advertised or promoted.
However, there is a huge gap between the
theory and practical steps. When asked about
promotion techniques manufacturing companies apply to their brands, the vast majority of
respondents (76.1%) said it was a discount policy.
Undoubtedly, price is a key issue in any business
relationships, but even a substantial discount
would not solve all the problems. Another poll
was very illustrative; factory representatives were
asked to name employees that were most important for the company, in their opinion. Maximum
number of votes were cast Operations Manager
— 73%, while for Sales Manager — only 23.2%.
Last places of the ranking draw a special attention: Marketing Consultant (9.6%) and Promotion
Manager (3%) were outsiders. This explains lack
of demand for training programmes proposed
by RusJewellerExpert for this specialist category.
Most believe that only salespersons should be
trained.
Jewellery Market
Advertising activity in brand promotion of businesses fell 30%: if in late 2011, 48% of respondents planed allocating more resources to brand
promotion, in practice only 21% of respondents
increased their advertising budgets. Consequently,
most magazines have lost their frequencies and
reduced their rather small numbers of copies to
a minimum, and if someone is still alive, this is
only through random donations. Advertising is a
spot advertising now. There is enough money only
for those magazines that are directly related to
exhibitions collecting the most likely buyers. Only
exhibitions and some good players can create an
advertising background to maintain the positive
image of a jewellery gift. The quality of advertising
is also doubtful: one-time infusions of money are
often just as ineffective as the complete lack of
investment in the promotion, since the problem
of advertising campaign is not only to create a set
of associations in the head of a buyer, but also to
make the brand recognizable, popular and widely
promoted.
Having assessed the advertising activity of
factories in the context of falling demand and
strengthening fight for customers, RusJewellerExpert through the Club Secretariat recommended
members of the trading community as anti-crisis
measure to pay attention to products of factories
with most recognizable brands.
Crisis of ideas
When describing most important personal
qualities of a successful manager, representatives
of the jewellery industry were unanimous in their
passion: the top three was hit by "professionalism",
"strategic thinking" and "the ability to create a
team", while fewer votes were cast for "creativity"
(10.6% of manufacturers, and 4.5% of retailers).
Unfortunately, for most business people, the term
"creativity" still means drawing red horses on
easels at the week-end, and not search for fresh
unconventional solutions. Meanwhile, the modern jewellery market lacks noticeably innovative
marketing ideas.
Restraint, fearfulness and tunnel thinking of
most part of the jewellery community can be seen
| 29
Who is the key employee in your company?
Head of sales
department
Chief accountant
Head
of production
CFO
Marketologist
Designer
Jeweller
0%
20%
40%
60%
80%
Marketing and promotion budget for this year
21
59
%
Increased
Decreased
20
in all areas — from product design to brand policy.
Customer feels this uncertainty unerringly, once
he or she steps over the threshold of jewellery
store. And then the customer makes the conclusion. Assay Chamber of the Russian Federation in
2012 noted import growth: for gold by 2%, and for
silver by 2.3%. This means, our customers do have
money for jewellery — and we must fight for it.
Stable
Union of watchmakers
and jewellers
F
or the third year together with the largest
jewellery wholesale trade fair “JUNWEX
Moscow” a watch salon "JUNWEX WATCH"
will be held. According to the participants, the
exhibition "JUNWEX WATCH" has proved itself as
the best place to work with wholesalers, of both
watch, and jewellery.
Russian watch salon "JUNWEX WATCH" is
a professional exhibition, which lasts less than a
week and works on the development of the hour
business 365 days a year. Due to the implementation of two exhibitionsin at the same time and on
the same site at once, trade representatives fill up
assortment in their watch and jewellery salons,
shops and networks.
The leading Russian manufacturers of watches,
as well as distributors and wholesale trade leaders
on the watch market participate in the III Russian
watch salon "JUNWEX WATCH" : Time & Technologies, Watch Company Romanoff, watch company
"Polet-Chronos", Sky Time the Office of the Time
Club, Sky Time Office "UTAH", the Trading House
"Polet", the Chic & Sauvage, the Trading House
"Slava", the Slim Group, OPTIM, TBN TIME, "Business and watch", "Polet Classics" (Denisov), "The
Storm", "North Watch Company", Wencia, OOZOO,
SH "NIKA", "Inter-Chas", "Chronoluxe", "Maktime",
"Anlina"," West Alpha", Fantesso and others.
The exhibition presents the following watch
brands:
Adriatica, Aerowatch, Aigner, Anne Klein, Appella, Bruno Sohnle Glashutte i.SA, Bulova, CASIO,
Charm, Christina Design, Chronotech, Citizen,
Clyda, Continental, Cover, D&G, ECCO, Edox,
Elite, ElleTime, Epos, Essence, FREELOOK, Gc, GL,
Guess, Hermle, Hip Hop, Hugo Boos, Ingersoll,
Jacques Bogart, John Galliano, Jеnnifer Lopez,
Just Cavalli, Kolber, Lancaster, Le Chic, Morgan,
Moschino, Nautica, Nina Ricci, OOZOO, OPEX,
Orient, Paris Hilton, Philip Lourence, Philip Watch,
Pilot Time, Police, PRIOSA, Petroff, RG512, Roberto
Cavalli, Rodania, Romanoff, Romanson, Salvatore
Ferragamo, Sauvage, Sector, Skagen, Storm, Ted
Lapidus, Tempus, Timex, Versace, Victorinox,
Wencia, "Denisov", "Derzhava", "Nika", "Polet",
"President", "Russian Time", "RFC", "Senator", "Slava", "Specnaz", "USSR"
Status of a leading industry business event in the
watch community firmly become permanent for
the exhibition "JUNWEX WATCH" due to the high
level of its organization, which meets all European
exhibition standards. That is, the union of watchmakers and jewellers has already taken place. And
the success of the alliance is confirmed with the
commercial results of exhibitors.
Russian Watch Salon 14–18 September 2013
together with JUNWEX Moscow Jewellery Show
Circulation: 7000 copies
Volume: 80 pages
Frequency: 6 issues per year
Distribution:
• among members and partners of Russian Jewellery Trade Club
• among the registered trade visitors, attending any event
of Exhibition Program «Jewellery Russia»
• through channels of partners of Publishing House «Jewellery Russia»
For further information and participation conditions please visit our website — www.junwex-watch.ru
For space reservation please call +7 812 303 98 60 or e-mail: [email protected]
To attend please call +7 812 235 83 83, +7 812 320 93 11 or e-mail: [email protected]
For advertisments please call +7 812 303 98 60 or e-mail: [email protected]
Media-Holding RESTEC JUNWEX | www.junwex.com
Mysterious Ways
of the Jewellery Trade
Everyone wants to start New year with a change: in 2013 some will launch a
new collection, while others will buy 3D-printer, and some will hold a drawing
among customers, when a fourth will ripe to expand to new market space.
Which way should the retailer turn on a broad Russian crossroads so that the
horse was safe, and he would find his destiny?
T
he overall growth in retail sales in 2012 increased
by 8%, which barely allows to keep abreast of
inflation. In comparison, not the most harvest
2011 brought a 16% retail growth — twice more reasons for optimism than in the current season.
Lack of data for the last three months allows
to determine the results as preliminary. It is not
clear what they precede. In theory, the average
Growth of retail sales in money equivalent
2012 year
2011 year
2010 year
monthly figure could be pulled by Christmas sales,
but jewellers speak about them with such sadness
that inadvertently the question raises "Was there a
boy?". Let us remind that not included in rankings
October and November were the most disastrous
period in a long time for the industry market.
Although there are enough reasons for pessimism, the majority of trade representatives are
set to carefully analyze the situation, to choose
a strategy of movement. The time for standard
solutions has passed long ago : to increase sales
and simply to survive in business, you need to look
for new moves. For example, to open new markets.
For many, the proven choice is a Central
Federal District: According to statistics of
Rosstat, the largest percentage of retail sales
(31%) occurs in Central Russia. A huge piece
of the pie belongs to Moscow: it is 39% of the city
and 3% of the Moscow region. While the capital
shows robust growth in 13%, CFD in general shows
a decline in sales by 2% compared to last year.
Good results are here in Voronezh and Belgorod
regions — by 33%, while other regions remain
almost at the old rates of sale or with worse results.
The most promising trend in 2012 was the
North: North-West Federal District showed
maximum thrust in 23%. In St. Petersburg, products of precious metals were sold for 33% more
than last year — in terms of sales of jewellery
Jewellery Trade
Northern Capital has demonstrated more impressive results than the official capital. A 30%
increase in retail sales occurred in the Republic of Komi, and by 19% — in Kaliningrad. Polar
Murmansk was an outsider here, where sales fell
by 5%: expectations of the "gas" money from the
development of the Shtokman field again were
not met, so the interest in the High North has
significantly fallen. As a result, sales of jewellery
in the Murmansk region are down together with
falling fish trade, which has long been the economic base of the region.
Ural and Siberian Federal districts emit
moderate optimism. The proportion of the total
number of retail sales increased in eastern Russia to
12%. In Siberia, the best performance was in Irkutsk
(8% growth) and Novosibirsk regions (4%), in the
Urals — the Sverdlovsk region (60%). At the general
black background it is really record figure — eloquent testimony of effective influence of the exhibition "JUNWEX Ekaterinburg" to a prompt supply
of stores in the region for new jewellery production.
In 2012, the next stage of development of the
project "JUNWEX Ekaterinburg", added to the
"Jewellery Russia" program, opened new vistas for
media holding "RESTEC JUNWEX». In the result of
consultation with leading players and interviews
with industry experts Organizing Committee has
decided to hold another — spring exhibition in
Ekaterinburg from 11 to April 14, 2013 The participants of the November exhibition noted urgent
need to communicate with regional wholesalers
for efficient and stable operation of the local jewellery chains.
Taking into account the prospects of the region,
this step seems logical and correct. The new exhibition will complement the November one, providing cyclical delivery at the local level and the
ability for wholesalers to complement the range
in anticipation of the summer season. According
to estimates of RusJewellerExpert, sufficient supplies of products can provide (among enterprises
of the region) at least eighty known in the industry
plants, a list of which is planned by the Organizing Committee. Their mission is to offer to retail
traditional assortment of jewellery and novelties,
| 33
Retail sales ratio in different regions
of Russia
5%
11%
31%
11%
8%
12%
11%
11%
Ural Federal District
South Federal District
North-West Federal District
activating the spring-summer trade. In the period
between exhibitions prompt delivery is to be provided by the main wholesaler in the region — the
company "Gold standard", on the basis of which
the representation of the "Russian Jewellery Trade"
Club works. This scheme is tested and completely
proved its value in previous years. The April show
is an addition to the existing supply chain, the need
for which was confirmed by the experiment itself,
and exhibitors — suppliers of jewellery collections
in the region. Experience in supporting the formation of a large wholesaler, received in Ekaterinburg,
will be used by the Club in planning the new steps
of development to the East — in Novosibirsk and
Vladivostok, which will allow full use of the potential of these areas and will have a positive effect on
the growth of retail sales.
Although the share of the North Caucasian
Federal District in relation to sales across the
country rose from 8% to 9% growth in the region
slowed — especially after the decline in sales in
Dagestan. Unfavorable political and economic situation affects not in the best way here: for 2012, the
volume of retail sales fell by 5%. Trade by precious
products in Karachaevo-Cherkessia and Chechnya
also significantly declined, but the Stavropol territory begins to play increasingly important role in the
district, the amount of sales of which grew by 30%.
Change in retail sales in 2012
(in comparison with 2011)
2011 year
2012 year
Responding quickly to the situation, calculated by RusJewellerExpert, the "Russian Jewellery
Trade" Club has also decided to use in the region
successful experience of increasing sales and development of local market, obtained in Ekaterinburg. These measures are aimed at unification of
interests of jewellery business in the post-recovery
space, restoration of business links between the
players considering new market realities.
Economic ties
Central
North-West
Volga
South
North Caucasian
Ural
Siberian
Far Eastern
Federal District Federal District Federal District Federal District Federal District Federal District Federal District Federal District
The drop in sales in the Caucasian republics is
unpleasant factor, since jewellery traditions are
strong right here: jewellery is still the main indicator of status and wealth, and a significant part of
the population is involved in the jewellery business.
The example of Adygea may serve as indirect confirmation of the fact that the interest to the jewellery is constrained by only adverse political conditions, although it formally belongs to the southern
Federal district, in fact, it remains the Caucasian
Republic. For 2012, the level of sales in Adygea has
increased by 80% — it is the result of many years of
stability, security and the powerful development of
tourism, which gives a rare opportunity to see the
beauty of Caucasus without risk for life.
The Southern Federal district regained its
position a bit, however, growth in 6% after last
year's fall by 27% is hardly convincing. Rostov
region showed good data — 18% increase. The
lion's share of sales is still owned by the Krasnodar
Territory (62%), but every year the lions become
smaller, threatening to turn into kittens. In 2012,
sales growth in the region was only 6%, which is
too small, given the large financial flows coming
out of the capital to Sochi, as well as an aggressive
advertising campaign of the Black Sea resorts.
The dependence of sales on the economic disturbances shines in every research report, so the
results of jewellery ranking are especially interesting to compare with the well-being indicators in
the respective districts.
Agency "RIA Ranking" conducted a regional
study, which identified the leaders on 64 indicators: the scale of the regional economy and its
efficiency, the development of entrepreneurship,
income level of the population, demography, development of fiscal and social spheres, the degree
of development of the territory, etc. As the result
single index was derived reflecting the level of the
region as a whole. Dispersion of indicators on the
territory of Russia was significant: If Moscow it is
82 points out of a possible 100, the worst performance are in North Ossetia — "unlucky" 13 points.
In general, jewellery results are correlated with
general economic. The top ten of both ratings
is made up of the same elements: The caravan
is predictable headed by Moscow, St. Petersburg,
Tyumen and Sverdlovsk regions, Krasnodar Territory. However, the economic rating is interesting
not by confirming the obvious, but the assessment
of the prospects.
Examining a regional map of Russia — is an
exercise in vigilance and attentiveness. If you do
not stare at large megacities you can see many
curious facts on bright as a patchwork, map. So, we
have already turned to the low rates of jewellery
sales in the Central Federal District. Rosstat's data
show that in Orel, Vladimir, Kaluga and Tambov
regions jewellery sale is from bad to worse: their
position in the ranking — 49, 60, 61 and 66 places
respectively. However, it is not so clear in the ranks
Jewellery Trade
Breakdown of retail sales in Central Federal District
13
5
1
39
%
9
2
1
5
2
4
2
3 12 3 2 3
4
of jewellery outsiders: when you put at one fell
swoop skid regions in the black list, there is a great
risk of missing "dark horses." Total integral rating
leaves some regions a chance. While the Tambov
region flounders somewhere in the middle of the
overall economic ranking, and Orel entirely falls
below the water line, it is more fun in the Vladimir
and Kaluga regions — 34 and 28 places of the
economic rating respectively.
Positive changes have occurred over the past
few years: Kaluga began to produce more cars,
in Vladimir enterprises for the production of
household appliances appeared, and in 2012 the
major production plant for nanomembranes began operating. Trickle of money flowing into the
regions, for now skirts jewellery industry, but if
the pace of development continue, the jewellery
"drought" will end.
Trust, but check
you must
However it is dangerous to exaggerate dependence of jewellery industry on the economic
development of the region. The belief that our
business is enough to follow the "ski", paved by
Belgorod region
Moscow region
Bryansk region
Orlov region
Vladimir region
Ryazan region
Voronezh region
Smolensk region
Ivanovo region
Tambov region
Kaluga region
Tver region
Kostroma region
Tula region
Kursk region
Yaroslav region
Lipetsk region
Moscow
automobile or light industry, is popular because of
its simplicity and accessibility. Oil derrick is built
on the hill — and the dinner at local restaurants is
served on the golden plates, and at the entrance to
a jewellery store queues. The co-relation of oil, the
economy and the volume of retail jewellery really
exists, but it is not as unconditional, as desired.
The example of the Kostroma region is demonstrative, whose 73rd final position in the integral
ranking is easier to find from the end, armed with
a microscope. Nevertheless, the region occupies 18
th place on the level of retail jewellery sales. This
position does not reflect the leading role in the
production of jewellery, but the gap of two options
still raises the question. And the Khanty-Mansi Autonomous Area is the reverse example. RIA "News"
awarded the bronze medal and third place in the
list of the most economically successful regions to
the region. Nevertheless, while sales of gold and
silver there are not too success: 2012 — complete
failure with reduced sales by 23%.
Statistics is like a compass: useful thing, but it is
necessary to use it wisely. Even following the most
accurate map, you can fall, if you have your nose
in there and do not to watch where you step to.
| 35
This Will Happen,
You Just Have to Wait!
W
ithin the business program of the exhibition “JUNWEX
Moscow 2012" 17 September, the VI International Trade
Conference "Jewellery Industry. Marketing. Competitiveness " took place, which brought together not only the
jewellery business professionals, but also representatives of the
expert bodies in the field of marketing technologies. Speakers
and participants discussed the most pressing industry issues,
ranging from questions of law and ending with the fall in consumer demand.
The president of the club "Russian Jewellery Trade" S. Vedovskiy opened the meeting, then granted permission to speak to
V. Mospan, Director General of the Association "Jewellers Guild
of Russia." The speaker dwelt on the shortcomings of the existing legislative system, in particular raised the issue of the new
draft of the law on precious metals and precious stones, such a
discussed one in the recent past. He stressed that the country
could become the world leader in the production of jewellery,
you just need to remove administrative barriers and modernize
outdated regulatory framework.
The president of the World Jewellery Confederation Gaetano
Cavalieri told of the fact that Russia tipped to achieve unprecedented heights in the global jewellery market He assured that
in the next twenty years we will witness the most impressive
shift of economic powers in the history of mankind, in which
the level of purchasing power of the overwhelming majority of
the world population will increase .
Analyzed the current financial performance of developing
countries and states — the leaders of the jewellery market, Cavalieri admitted that it is impossible to call the current economic
Chairman of the Union of Jewellers NWFD
A. Gorinya
situation too favorable,
but he sees a lot of reasons for optimism. All
countries show slowdown of the economy,
but for India and China,
President of the World Jewellery Confederation
it can play a positive
Gaetano Cavalieri
role in neutralizing the
symptoms of "bubble", of
which experts say anxiously. In these circumstances, the recent
entry of Russia into the WTO will lead to a more active involvement of the country in international relations. Along with India,
Brazil and Japan Russia will approach the global superpowers.
If the report of the President CIBJO presented the global
world trends analysis, A. Gorinya report was focused on Russian market situation. The assessment of the current production
base of jewellery industry and its potential was heard. Having
chosen the starting point in 1991, Alexander Sergeevych noted
a fourfold increase in growth of technological advancement
and the level of production in the last twenty years, with a
significant imbalance of production of gold products in favor
of silver. This is evidence of lack of both of working capital in
jewellery small and medium-sized businesses and the development potential of the industry as a whole. "I see the positive
side of the situation — said the speaker, — after taking into
account the rapid growth of new markets, pulling away buyers from the jewellery business, even holding former position
is a success!" Among the most important achievements of the
industry in recent years, the chairman of the Union of Jewellers
NWFD highlighted progress in automation of all production
sectors and the overall growth of technical equipment of enterprises — according to these criteria the country is now above
world average level. Many companies have moved production
from the major cities in provincial centers, where work force
is cheaper, and the threshold of administrative difficulties is
lower. With regard to business problems, the most dangerous
of these is the outdated legislation, which is not consistent
with modern market demands. "We have all the prerequisites
for development — optimistically concluded his statement A.
Gorinya — therefore, if it is complicated, we will start to work
faster, increasing productivity".
Read full version of the materials at the conference
website at www.junwex.соm.
All you need is ...
junwex.com
Russians Have Good Taste
Interview with the President
of Roure company
Frederick Kare
Please share with us your impressions
of the show.
"JUNWEX Moscow" is a direct reflection of the
Russian market. In what state is the jewellery market in Russia, you can see by visiting the event.
Organizers have taken on a very important mission — to promote the development of the domestic jewellery business, and they have successfully
cope with this challenge. Industry managed to
keep the tradition of jewellery that has always
been famous for the Russian masters. I saw a
lot of interesting companies with
their own creative style, vibrant collections, beautiful stylish stands ... quite
active work of exhibitors to promote their
brands.
Would like to see
in the exhibition
Expert opinion
attended by more European brands, which could
bring fresh ideas to the Russian jewellery market .
Many foreign brands are likely to fear the
complexities of exhibition work in Russia?
Yes, of course. Unfortunately, a number of formalities makes the job difficult, but it can be overcome.
Moscow is an international metropolis, it meets
international standards. I believe that Russia deserves much more attention from foreign manufacturers of jewellery.
We did not plan to sell the products at exhibition at retail. But buyers interest has forced us
to think of such a possibility in the future. All
pre-scheduled appointments with customers took
place, new trade representatives from different
cities of the country appear, we are looking for
ways of cooperation with them, actively negotiate.
I have collected a lot of business cards, contacts
which i have to work out after the show.
Our main goal is to find partners to distribute
products in Moscow, St. Petersburg, Ekaterinburg,
Volgograd, Novosibirsk, Surgut, Novokuznetsk,
Krasnodar and other cities.
How do you feel about the fact that the
global jewellery industry is subject to fairly
aggressive expansion by China?
I think this is a serious problem that did not
arise yesterday, and, unfortunately, applies to all
members of the jewellery market. More and more
companies manufacture their products in China
to get a very cheap, but, alas, a very low quality
product. This has a direct impact on European
markets, resulting in overproduction and, as a consequence — to the crisis. Not to mention that, as
a rule, production made in China — is a copy of
famous brands.
But with all the dominance of Chinese goods
jewellery luxury will always find a buyer. I am
convinced that the French jewellery products that
was popular in the world for hundreds of years
will remain a favorite, demanded by buyers.
Active growth of the Russian jewellery market allows us to suppose that in your country the
problem of illegal copying will be resolved.
I watch how the worst, dishonest, weak players
are sifted from the Russian retail sector . As shop
also is responsible for the products that it offers
to the customer. Why would it knowingly sell defective goods? Russians have good taste, they are
well versed in fashion jewellery.
| 39
JUNWEX New Russian
It is noteworthy that
“JUNWEX New Russian
Style” posted the solid
product-shipment results
this year. The Russian
Jewellery Trade Club
registered 12% more
wholesalers and retailers
in attendance than in 2012.
Thus, “JUNWEX
Petersburg” (February),
“JUNWEX New Russian
Style” (May), “JUNWEX
Moscow” (September)
have formed a system
that makes it possible
to load-up on products
at the exhibition and make
the necessary inventory
replenishments during
the periods in between.
Events
| 41
Style: Constant Growth
W
orthy of special mention is the exposition
put on by MACEF, which for the first time
this year was organised within the framework of “JUNWEX New Russian Style.” As noted
by O. Mironova, General Director of RIA RusJewellerExpert, “this proximity is good for both projects.” “In particular, jewellers are gaining new
growth opportunities: the presence of companies
specialising in design helps in the positioning and
sale of gold not merely as a metal, but as an integrally-precious part of the individual image and
style marketed to customers.” With each passing
year, the JUNWEX exhibitions are attracting an
increasing number of interested companies from
abroad. These include both those visiting Russia
for the first time and those attending the expos for
some time and keeping an eye on the local market.
For them, the deciding factors are the authority of
the organisers — Media-Holding RESTEC® JUNWEX — and the constant expansion of related
projects that they see with their own eyes. Thus,
this year’s “New Russian Style” featured a number
of consultations on the formation of an international exposition at “JUNWEX Moscow 2012.”
Among other things, the Embassy of the Republic of Sri Lanka expressed its intention to create
Expo by the numbers
24 800 m2
Number of exhibitors
559
Number
of visitors 28 559
Number
of trade visitors 6603
Leading Russian producers
of gold jewellery:
• ADAMAS
• DIAMANT
• TOPAZ, Kostroma Jewellery Factory
• Krasnoyarsk Non-Ferrous Metals
Plant (Krastsvetmet)
• ESTET Jewellery House
• Region-Kostroma Jewellery Factory
• ADAMANT Jewellery Factory
• PLATINA Jewellery Factory
• Bronnitsky Jewellery Factory
• AQUAMARIN Jewellery Factory
Leading Russian producers
of silver jewellery:
• Krasnoselsky Yuvelirprom
• Krasnaya Presnya Jewellery Factory
• Adamant Jewellery Factory
• Severnaya Chern Jewellery Factory
• Intersilverline Silver Factory
• Diamant Jewellery Factory
• Bronnitsky Jewellery Factory
• Sidan Jewellery Factory
• SP G.G. Gusev
a national expo stand. The Organising Committee
was also approached by major enterprises from
Greece, India and the UAE wanting to showcase
their exhibits in September.
Organisers were deeply honored by the participation in the official opening ceremony for
“JUNWEX New Russian Style” of a representative
of leading exhibition operator UBM Asia — UBM
Asia Director of European Affairs J. Essink, and
L. Chow — development director of the jewellery
group. Media-Holding RESTEC® JUNWEX already
has a number of agreements with UBM concerning
the organisation of buyers’ programs. At present,
the operators’ joint plans call for further cooperation expansion in that direction within the scope
of the Hong Kong Jewellery & Gem Fair.
The exhibitions held under the Jewellery
Russia Programme have always been a welcome
occasion to improve the qualifications of company employees thanks to the events put on by the
JUNWEX Learning Center.
The exhibition also served as the backdrop for
the traditional awarding of the best Russian jewellery producers with the honorary distinction:
“2011 Industry Leader.”
The official award ceremony was continued
by “Jewellery Russia” Publishing House, which
presented honorary certificates for long years
of productive cooperation, high professionalism
and active assistance in the formation of a civilized Russian jewellery market. Laureates included
Gulidov Krasnoyarsk Non-Ferrous Metals Plant
(Krastsvetmet), “Aquamarin,” “Sidan,” “Northern
Events
Capital Jewellers,” “Style Avenue,” “Samorodok,”
“Kostroma Diamonds,” “Master Brilliant,” Jewellery Factory “Karat,” the Navell retail chain,
“Region Yuvelir” Group, “Elana,” Trading House
“Adamant,” the “Bronnitsky Jewellers” retail
chain, Fidelis, the “Sergey Slotin” retail chain,
“Yuvelia,” “Russkoe Zoloto-Art,” and the “Almaz”
retail chain. Saint Petersburg Mint “Goznak” was
presented with a special diploma for its highly-professional approach to the promotion of a
trademark combining the best traditions of the
reknowned enterprise with the bold trends of
modern advertising.
| 43
Where Next
for Retail Chains?
R
ecently, prices for precious metals have been
trending upwards, real estate and rents have
risen in price, and interest rates on credits have
gone up considerably. At the same time, consumer
demand leaves a lot to be desired. Companies in the
sector have been paying more attention to the sustainability of their retail chains than to expansion.
A marked increase in costs has inevitably promoted
a strategy of consolidating past achievements. Today
it is becoming obvious that the rapid development of
a retailer — an increase in retail space and territorial
expansion of the retail chain — can either increase
capitalisation or lead to a serious internal crisis, manifested primarily in delays in payments to suppliers.
Key regional evaluation criteria:
1.population in shop catchment area
2.percentage of potential buyers (this
figure is calculated based on the
retailer's format and their price
positioning). It signifies what percentage
of consumers from the total population
can be expected to regularly visit
the planned shop and make purchases there
3.penetration — the expected frequency
of visits to the shop
4.the potential size of the market basket;
5.an evaluation of competition in the region
chosen for expansion.
In these conditions, some chains are continuing
to develop in the regions, others are holding out,
freezing regional expansion, while others still have
simply scrapped these projects without comment.
Which position is the most correct? World market
experience shows that under no circumstances
should development be discontinued! But given
the increase in the cost of credit, the active development of new territorial markets is currently
quite expensive; so it is extremely important to
decide which criteria to use to select regions for
expansion, and how to develop a proper development strategy for these regions.
To make initial forecasts and evaluate a region’s
potential, it is important to know retail sales figures, the population level and its income. RusJewellerExpert has analysed the key regional evaluation criteria on the basis of data received from the
Federal State Statistics Service, which was correlated with data from other official sources, and
has ranked them from the point of view of their
appeal to retailers in the sector. Jewellery sales volumes were calculated based not on quantity but on
the rouble equivalent, as used by the Federal State
Statistics Service in its record-keeping.
In 2011, jewellery sales in the Russian Federation
amounted to almost RUR 144 bln., up 16% from 2010.
Unfortunately, it is not possible to create a more
detailed picture of sales, broken down into various
precious metals, as these statistics are not available.
The situation in the Russian regions varies even
within the borders of the same federal district: in
some places sales fell, while in others they increased.
The leader in the regional rating is the Central
Federal District (33%), followed by the Ural Federal
Analytics
Despite the fact that in rouble Jewellery retail in regions
terms, jewellery sales in 2011
6
were up year-on-year, the
11
actual volume of jewellery
sales by weight fell 4.8%.
District (12%) with the Siberian district in third
place, followed closely by the Southern and the
Volga districts.
Altogether, sales in the Central Federal District
increased 23.6% to RUR 48 bln. Sales in Ryazan
region increased 84% from 2010, in Kaluga and
Bryansk — 50%, Lipetsk — 34%, Smolensk — 30%,
Ivanovo — 24.5%, Voronezh — 23%, and Kostroma practically 130%! Sales in Oryol and Tambov
regions remained almost unchanged. For several
years in a row, growth in sales in Belgorod region
outpaced all others in the Central Federal District,
but in 2011 sales unexpectedly fell 4%. Sales in
other regions in this district increased 15–20% on
average.
As regards jewellery sales, 33% all sales in the
Central Federal District are accounted for by Moscow, 13% — Belgorod and Moscow regions, 10% —
Voronezh region, and 8% — Bryansk region. The
remaining 25% is divided among other regions.
The most insignificant sales volume was in Tambov region, which accounted for 0.03% of the total.
Sales in the Northwest Federal District increased 16% to RUR 11.4 bln.
National rating of regions:
1.Moscow (11%) and
Moscow region (4%)
2.Krasnodar territory (7%)
3.Tumen region (6%)
4.Sverdlovsk region (4%)
Total sales in Moscow and Moscow
region account for 15% of the national
total, which is more than the entire Ural
Federal District.
33%
%
12
11
8
8
| 45
11
This growth is primarily attributed to a 36.5%
increase in sales in Kaliningrad region (this region
accounts for 10% of total jewellery sales in the
district) and 31% in Novgorod and Arkhangelsk
oblasts. Sales in St Petersburg, as well as Pskov and
Vologda regions remain constant (in particular,
St Petersburg accounts for 40% of the total for
the Northwest Federal District, but only 3% the
national market). Komi Republic accounts for 20%
sales of the district.
The situation in the Southern Federal District is
quite depressing — with a 27% drop in sales to RUR
15.875 bln. The worst situation was in Krasnodar
territory: the volume of the local jewellery market
fell by 38%. There was a similar picture in Adygea
and Volgograd region, with a drop of 19%. Unlike
their neighbours, jewellers in Rostov and Astrakhan regions saw growth in sales of almost 30%.
Sales in Kalmykia remained unchanged.
Krasnodar territory has always been the sales
leader in the district: In 2010, its share of the local
market was 76%, but the current figure is a little
more modest — 66%. Nevertheless, it is still second
in the national sales rating (7% of the total volume
of jewellery sold in the country) after Moscow and
Moscow region.
Their interest piqued by the atypical situation in
Krasnodar territory, RusJuwellerExpert carried out
a survey among representatives of the local retail
trade. It is significant that the respondents' opinions were frequently very different. In particular,
we spoke to three owners of companies whose
shops are located in one small town, Slavyansk-onKuban. One emphasized a marked fall in demand
for jewellery, the second noted a considerable
increase in consumer activity (especially in summer), and the third refrained from commenting
the sales, saying: “People have no money at all!”
However, all of them admitted that the number of
jeweller's shops in the city had increased steadily,
and the main items in demand are still inexpensive lightweight articles and hollow chains. The
survey demonstrated the need to “sink or swim”.
Retailers that strive to work efficiently, regularly
change window displays, carry out various original promotions and spend enough on advertising
etc., are happy with sales. And it is well know that
where there is no pain, there is no gain.
Sales in the North Caucasian Federal District
increased 16% to RUR 11.232 bln. However, these
figures were only reached due to a 2.5-fold jump in
sales in Ingushetia. In Alania and Kabardino-Balkariya the figures were a little higher than previously;
and in Chechnya the market fell 2.8%.
N.Guseynova (Dealer-Jeweller, Makhachkala):
The number of articles sold fell, but revenue remained
the same, as gold prices increased constantly. I can
confidently state that our sales are steady all through
the year and there are no significant surges or falls in
demand. This is primarily connected with tradition —
local people love gold: our weddings, engagements,
birthdays are all celebrated with precious gifts. The
best gift to an oriental woman is gold. When a baby
is born, its mother should be presented with a piece
of golden jewellery, and if the baby is a girl, it should
also get some. Our national custom is that a girl can
be engaged for rather a long time — two or three
years. And in this period, she is to be presented with
golden jewellery. Of course, our jewellery prices differ
significantly from those in Moscow, and so does our
standard of living. However, even people on relatively
small salaries give quite expensive precious gifts.
The maximum share of sales (66%) in this district is accounted for by Dagestan, with 16% from
Stavropol territory.
Sales in the Volga Federal District increased
18.6% to RUR 15.877 bln. In this district the highest year-on-year growth was in Udmurtiya (a gain
of 40%), Penza region (33%) and Yaroslavl region
(31%). The lowest growth was in Nizhniy Novgorod region (21%), Orenburg (25.5%) and Tatarstan
(21%). Sales in the Republic of Mordovia remained
unchanged. Sales fell only in Chuvashiya — by 19%.
The sales leader in the Volga Federal District is
Tatarstan (17%), followed by Perm territory (13%),
with Nizhniy Novgorod region (12%) in third
place. The Republic of Bashkortostan was in third
place in 2010.
Among the federal districts, the most rapid
growth was in the Ural Federal District, where
sales have doubled (RUR 17.162 bln.). In many respects, this increase was due to the work of the
Ural office of the Russian Jewellery Trade Club and
the JUNWEX Ekaterinburg exhibition, held with
its support, which considerably improved the efficiency of deliveries of collections to retail outlets
in the region. Very good results were achieved by
retailers in Khanty-Mansi (a four-fold increase in
sales) and Yamalo-Nenets Autonomous Districts
(an almost three-fold gain), as well as in Tyumen
region (3.7-fold). In Sverdlovsk region, jewellery
sales in roubles increased 40%, and in Chelyabinsk
region — 30%. In this district, only Kurgan region
saw a decline — with jewellery sales down 38%.
The leaders in the Ural Federal District are
Tyumen region (38% of the local market), Khanty-Mansi district (26%) and Sverdlovsk region
(24%). Sverdlovsk region used to be the leader in
the district, accounting for half of total sales in the
entire Urals; however, today it accounts for 4% of
national sales, having been overtaken by Tyumen
region, whose share increased to 6%.
Sales in the Siberian Federal District increased
11.2% to RUR 16.37 bln. The largest growth was
in Tuva (34% growth), Omsk region and Krasnoyarsk territory (31% each). Sales dropped only in
Novosibirsk region (19%): in 2010 this region was
Analytics
the leader of the district, accounting for 32% of the
market; today its share is 23%. The present leader
is Irkutsk region, where the share of sales in the
district went up from 24% to 26%. In third and
fourth place are Omsk region (15%) and Krasnoyarsk territory (14%), respectively.
Sales in the Far East Federal District increased
14.5% to RUR 7.87 bln. This is the only district where
absolutely all provinces demonstrated positive sales
growth dynamics (only Sakhalin region remained
unchanged). Market distribution in the federal district has also remained practically the same: Sakha
Republic (Yakutia) 43%, Khabarovsk territory 23%,
Primorye 14%, and Sakhalin region — 11%. Sales
grew 35% in Magadan region and 43% in Amur region, but their share of total sales in the district is
small; therefore, they have not affected the overall
result. Moreover, the website of the Federal State Statistics Service of the Russian Federation published a
rating of regions according to the following criteria:
the size of individual incomes; migratory appeal of
the area; the survival rate for children under one
year; safety; development of service markets; and the
availability of jobs. As a result, the top ten included:
• Moscow;
• St Petersburg;
• Moscow region;
• Belgorod region;
• Khanty-Mansi Autonomous District — Yugra;
• Krasnodar territory;
• Tumen region;
• Republic of Tatarstan;
• Yamalo-Nenets Autonomous District;
• Lipetsk region.
We can see that growth in jewellery sales is not directly dependent on the standard of living. In Belgorod region, in which is high up on the list, sales fell;
in St Petersburg, ranking second, the sales remained
the same, and in Krasnodar territory, which is also
among the leaders, sales fell drastically. The only
exceptions are Khanty-Mansi and Yamal-Nenets
Autonomous Districts, where the high standard of
living corresponds to high jewellery sales.
So, the RusJewellerExpert statistical analysis
has made it possible to receive a comprehensive
| 47
picture of the situation in different areas. Based
on the standard of living in different regions of
the Russian Federation, jewellery sales volumes in
each of them, and the development dynamics in
particular territories, retail operators can make a
precise evaluation of the potential of a particular
market and select the right development strategy
for the company.
As regards the future, RusJewellerExpert experts
expect retail trade development to move from large
cities to smaller ones, as well as from well-developed central regions to peripheral ones in the near
future. In many areas, there are practically no retail
chains, due to problems with logistics and the absence of suitable real estate, but local consumers
already expect up-to-date retail trade.
I.Minakov (Independent Trader
I.M Minakov., Kazan):
In comparison with the previous period, sales remained steady; with active demand for cubic zirconium jewellery, the average purchase amounting to
RUR 5,000-10,000. I have not observed the opening
of new jeweller's shops as there are quite a lot of
them in the city and the market is oversaturated;
buyers feel lost when the choice is so large, and the
standard of living has not gone up. Our buyer is a
representative of the middle class. Sales peak on
holidays and in summer. The prolonged winter and the
resulting bad mood do not stimulate buyers to go to
jeweller's shops to buy some jewellery. But I am sure
that success in sales depends mainly on the person
standing behind the counter.
Y. Semyonova, 'Golden Fleece' jeweller's showroom
(Nyagan, Khanty-Mansi Autonomous District):
Our shop is relatively new, it was opened about three years ago; therefore it is
difficult for me to assess the situation yet. In my opinion, sales have improved by
about 20%. However, we will see a usual outflow of buyers in summer as people
go on holidays. Nevertheless, the increase in the standard of living cannot but be
felt. Now the city is undergoing large-scale state-funded construction, with the
building of large shopping centres and malls. As regards current market trends,
I would mention the purchase of jewellery on credit: as a rule, these purchases
are made by people of advanced age, even pensioners.
Production
Reacts to Demand
A
Rating of regions
by volume of jewellery output:
Kostroma region (47%).
Moscow (15.3%) and Moscow region
(6.15%).
Krasnodar territory (6.8%).
Vladimir region (5.7%).
St Petersburg (4.4%).
Sakha Republic (2.8%).
Ivanovo region (2.7%).
Sverdlovsk region (1.23%).
Republic of Dagestan (1.13%).
ccording to the Federal State Statistics Service, the Central Federal District leads in
jewellery production in Russia.
Kostroma region accounts for more than a half
(60%) of jewellery products manufactured in the
Central Federal District. This situation is traditional: Kostroma goldsmiths were second to none
since before the Revolution. Today the province
accounts for 47% all jewellery manufactured in
Russia.
Stoneless jewellery
In 2011, stoneless jewellery, accounting for 41% of
output, was the most popular group among Russian
jewellery companies. What’s more, production of
this jewellery is increasing from year to year.
Breakdown of production by region
4
8
9
2
1
2
1
1
1
5
2
5
4
2
%
%
75%
2010
78%
2011
Analytics
Breakdown of jewellery production in Central Federal District
6
7
4
22
3
20
1
1
%
8
%
8
58%
60%
Belgorod region
Bryansk region
Vladimir region
Voronezh region
Ivanovo region
Kaluga region
Kostroma region
Kursk region
Lipetsk region
Moscow region
Orlov region
Ryazan region
Smolensk region
Tambov region
Breakdown of jewellery production in Russia
2,7
2,8
1,2
3,94
1,11,1
4,4
5,7
%
6,15
47
6,8
Kostroma
Dagestan
Moscow
Rostov region
Krasnoyarsk region
Smolensk region
Moscow region
Chelyabinsk region
Vladimir region
Udmurtiya
Saint-Petersburg
Kaliningrad region
Sakha Republic
Tatarstan
Ivanovo region
others
Sverdlovsk region
15,3
Diamond jewellery
Most of the diamond jewellery manufactured
in the country comes from the Central Federal
District (72%).
In 2011, production of this jewellery increased
16%. The increase was mostly due to companies
in Kostroma region: diamond collections account
for an increasingly large share of their range from
year to year, with a 36% increase in 2011. With
other companies in the Central Federal District,
the situation with diamond jewellery has taken a sharp downturn: Vladimir region has seen
a drop in production of almost 90%, Ivanovo
region — 80%, and production in Moscow and
| 49
Breakdown of jewellery production
by product groups
5
19
with brilliants
3
%
41%
32
with insets
without insets
wedding rings
gold and silver chains
Moscow region has practically halved. The Southern and Ural Federal Districts have also seen a
30% decline.
A positive dynamic was noted among jewellers in Yakutia, who increased diamond jewellery
production 40%, as well as their counterparts in
Nizhniy Novgorod region (up 30%), Yaroslavl region (26%) and St Petersburg (20%).
Wedding rings
In 2011, domestic production of wedding rings
fell 7% year-on-year. This decline was for objective reasons, and was caused by overproduction
of these goods in previous years. As a result, a
number of companies had to halt wedding ring
production.
Chain jewellery
•Rating of regions
by production of diamond
jewellery:
•Kostroma region (59%).
•Moscow (12%).
•St Petersburg (9.6%).
•Republic of Dagestan
(6.6%).
•Sakha Republic (6%).
•Chelyabinsk region (2%).
Production of diamond jewellery
in other regions is insignificant
and does not influence the national
market.
In 2011, production of gold and silver chains
fell 22%. The main manufacturing capacities of
this market segment are concentrated in the Central Federal District (76.5%), particularly Vladimir
and Moscow regions, and the Siberian Federal
District (18.9%) — particularly companies in Krasnoyarsk territory. However, both these districts
experienced a 26% and 7% slump in production
respectively.
An opposite trend was noted in the Northwestern Federal District, where there was 50% production growth, particularly in St Petersburg.
Inset jewellery
In this segment of jewellery production, the situation has remained unchanged from the last year.
The overwhelming majority (77.6%) of this
jewellery is manufactured in the Central Federal
District (Kostroma and Ivanovo regions), with the
North Caucasus (Republic of Dagestan) accounting for 11%.
Jewellery Market
| 51
Market Environment
The Russian jewellery market is the most developed part of the jewellery
market in the post-Soviet space and dominant from the point of view
of the development of the jewellery business in this part of Europe.
T
he infrastructure of the Russian jewellery market is a well-developed market system, with a
minimum of administrative intervention of
the state bodies and with the maximum of the
market mechanisms. Most of the participants of the
jewellery market (not less than 99%) is a private,
family and public (OAO, ZAO, OOO) enterprises. And number of such enterprises registered in
Russia is about 25 thousand! The leading jewellery
manufacturers can be attributed 10-15 enterprises,
in the aggregate, producing no more than 12–14%
of the total Russian production of jewellery.
The fall in purchasing power in the Russian
Federation, caused by the crisis passed a minimum in 2009-2010. Today in monetary terms the
volume of sales is fully restored, which positively
characterizes the Russian market in comparison
with the majority of the countries of Europe and
the United States. And this is despite the significant
growth of prices for gold and silver.
Data on the number and mass of pieces hallmarked and stamped
for 2000–2012
ARTICLES OF GOLD
Year Total: Quantity
Mln
pieces
2000
9,74
2001
13,15
2002
17,63
2003
22,09
2004
26,94
2005
32,31
2006
37,32
2007
48,51
2008
46,68
2009
27,93
2010
33,96
2011
33,77
2012*
35,24
*11 months of 2012
mass
tons
24,60
33,66
42,70
55,72
68,48
88,18
96,82
130,32
126,92
68,23
78,13
77,00
76,66
including foreign
products of art
Quantity mass
Mln
tons
pieces
0,26
0,70
0,08
0,20
0,11
0,59
0,19
0,95
0,40
1,66
0,83
3,99
1,57
6,20
2,85
11,74
2,78
10,39
1,08
3,81
1,73
4,81
2,06
2,06
1,56
4,34
ARTICLES OF SILVER
Total:
Quantity
Mln
pieces
7,56
9,30
12,19
16,51
21,43
23,17
24,98
32,79
41,97
49,20
56,24
49,91
46,29
mass
tons
35,44
47,89
60,37
87,60
121,83
150,48
155,3
223,24
268,83
224,98
240,43
193,17
180,47
including foreign
products of art
Quantity mass
Mln
tons
pieces
0,73
3,40
0,85
4,38
1,66
10,09
2,86
17,80
4,32
28,03
5,42
37,20
6,09
43,91
8,12
63,70
10,65
79,90
7,85
52,03
11,39
69,00
11,06
58,41
10,97
54,27
ARTICLES
OF PLATINUM
ARTICLES
OF PALLADIUM
Total:
Total:
Quantity
thousand
pieces
22,94
16,48
19,56
29,40
17,80
22,95
24,04
23,41
29,39
12,30
11,30
13,36
mass
kg
104,2
84,03
109,3
160,74
96,42
135,49
157,41
163,03
211,1
83,39
83,77
105,76
Quantity
thousand
pieces
0,10
0,33
0,90
4,37
8,88
5,99
6,74
6,25
6,78
24,33
23,33
13,06
mass
kg
0,30
1,13
6,11
22,97
38,82
26,85
30,30
31,44
48,15
75,25
94,00
47,48
The base of the growth of purchasing power
is the mass reindustrialization civil industries
(construction, metallurgy, automotive industry,
shipbuilding, aircraft construction, car-building,
consumer goods, powerful injection of money into
the Military-industrial complex and agriculture,
updating and development of energy infrastructure, capacity of small and medium business.
Well-developed jewellery market infrastructure,
huge precious materials resources make Russia one
of the most prospective countries in the world
jewellery market.
Russia holds the first place in the world in explored diamond resources and ALROSA JSC holds
the first place in diamond production. Russia holds
the fifth position among the 20 countries of the
world producing brilliants.
Russia holds the world fourth place in gold
mining and is in fact a monopolist in resources of palladium-platinum group metals.
The highest developed centers of jewellery production are Moscow, St.Petersburg, Ekaterinburg
and Kostroma where the leading jewellery plants
are concentrated and primary professional training of specialists is realized, large staff resources are accumulated. Meanwhile Russia jewellery
industry makes up only 0.01% of GDP and the state
does not understand its priorities. The forthcoming Russia’s entry into the WTO shall open the
largest distribution market for foreign companies.
The growing demand for adornments, gifts and
watches in the Russian market caused by the economic development of the country and growth of
public wealth, establishment of the ‘middle class’
provides new prospects for sales increase.
The prospects of Russia today especially brightly expressed the presence of a number of Russian
buyers at all of the world's jewellery and watches
exhibitions.
Competitive environment
of exhibition services
in the jewellery sector
• The peculiarity of the Russian market is concentration of exhibitions in large cities — Moscow,
St.Petersburg. Approximately 80% of all exhibitions are held in these cities.
• Competition type — tough.
• Before 2004 Jeweller (Moscow, organizer — RosUvelirExpo) and Junwex (St.Petersburg, RESTEC) were the largest exhibitions in the Russian
jewellery market.
Steps done to optimize business in conditions of crisis
52,60%
Increased production of silver jewellery
Increased shipments of products to the regions
Increased staﬀ salaries
Launched a new line for production
of lightweight products
Created new jobs
Reduced the production volume of jewellery with
precious stones (diamonds, sapphires, emeralds etc)
Reduced the part of employees
Reduced the salaries of employees
37,00%
22,20%
31,90%
28,90%
11,90%
8,10%
0,70%
Jewellery Market
• Since 2005 JUNWEX Exhibition programme
organized by RESTEC JUNWEX media-holding holds the leading position in the exhibition
services for the jewellery market. The ratio of
its equipped exhibition area made up 1 to 10 in
2011 (5,500 / 52,000 sq.m accordingly).
The exhibition included in the Jewellery Russia
programme — Junwex — St.Petersburg (February),
New Russian Style (May), Junwex Moscow (September) bear the most large-scale character and
are the most demanded in the Russian jewellery
market.
The main venues for the Jewellery Russia Programme are All-Russian Exhibition Center — in
Moscow, and Lenexpo Gavan in St.Petersburg.
These exhibition grounds are the most modern
venues in Russia provided with the highest service
level corresponding to the international level with
the appropriate transport infrastructure. There are
no halls in Russia able to compete with those used
for the Jewellery Russia Programme exhibitions by
the basic range of parameters, including administrative support of Moscow and St.Petersburg heads.
By the results of 2012 total area of RESTEC
jewellery exhibitions made up over 50,000 sq.m
netto (stand space). The exhibitions of the Jewellery Russia Programme organized by RESTEC
JUNWEX media holding with the support of the
Russian Jewellery Trade Club acquired the status of
the leaders and totally deprived the former competitors of significant positions.
Retail market of Russian
jewellery products
34 mln. golden jewellery items, approximately
50 mln. silver and 1,3 mln. diamond items were
sold in Russia in 2011. Total volume of sales is estimated at 10 bln. dollars a year. Comparing to 2010,
production of diamond jewellery items increased
by 13,8% in 2011, according to the data of RusJewellerExpert and Russian Federal State Statistics
Service. The demand for lightweight and hollow
golden and silver jewellery items in all products
categories is growing steadily. Meanwhile, the customer becomes more sophisticated while choosing between such products.
| 53
Number of jewellery retail stores of five
leading companies
585 Jewellery
Retail Chain
347
337
201
240
240
Yaxhma Zoloto
172
Almaz-Holding
Adamas
130
MUZ
282
200
218
170
165
2009
169
170
2011
2010
199
Federal retail in the Ural, Siberian and Far
Eastern Federal District
% from the total quantity of jewellery shops
0
60
120
Moscow
St.Petersburg
Local Jewellery Retail
Federal Jewellery Retail Chains
Volume of retail sales of jewellery products
in Russian regions
6%
11%
33%
%
12%
11%
8%
8%
11%
Jewellery manufacturers’ breakdown
by federal districts (2010)
2%
2% 1%
2%
5%
4%
9%
%
75%
Russian jewellers learned a number of lessons
from the decline in consumer demand in 2009–
2010 and from current conditions of globalised
economy.
Firstly, large companies gave up their ambitious
plans to enter foreign markets overloaded with diverse jewellery products at dumping prices. Export
consignments are relatively small and carried out
in testing regime.
Secondly, jewellers have quickly reacted to the
slump in world prices of gold, silver and precious
stones. Trying to adjust to the prices typical of
jewellery stores, they started to use less gold and
more diamonds as well as even more silver and
semiprecious stones to produce jewellery items.
Thirdly, the crisis blasted the sphere of jewellery
design which has previously been primitive and
backward. Together with their own experience,
Russian jewellers creatively approached and used
ideas and solutions of others (luckily, the Internet
provides the widest opportunities in this direction).
Fourthly, “jewellery pipeline” containing five
components (design — production — wholesale —
retail — secondary market) become flexible and
strong allowing manufacturers to adjust quickly
to the seasonal changes in customer’s demand.
Finally, jewellers significantly raised advertising and PR activities in competition with other
products within the niche from 1000 to 10 000
roubles (mobile phones, gadgets, fashionable perfume, luxurious linen), thus, ensuring additional
advantage and making themselves more preferable
in customers' eyes.
According to the survey “Retail jewellery chains”
conducted by RosBusinessConsulting, in 2011 the
volume of retail jewellery market of Russia raised
by 19% in monetary terms. Adamas, Almaz-Holding, Moscow Jewellery Plant, 585 Jewellery Retail
Chain Co and Yashma Zoloto form the list of five
leading companies in jewellery retail by the number of stores.
Large retail jewellery chains of federal level
are still strengthening their positions at the most
prospective markets from of the Volga, Central
and Southern Federal Districts. Abundance of local operators at the Russian trade market, entry
of manufacturing enterprises to the market with
their own retail goods and reinforcement of price
competition are the factors deterring the development of federal retail in the Ural, Siberian and Far
Eastern Federal Districts.
Following the results of the year 2011, according to the data of Russian Federal State Statistics
Jewellery Market
Service, the growth in the volume of retail sales of
jewellery products in the Russian regions amounted to a little more than 16% in comparison to the
year 2010. The largest contribution to the total income from jewellery trade was made by: the Central Federal District (over 30%), the Ural Federal
District (approximately 12%), the Siberian Federal
District (over 11%), the Volga Federal District (11%)
and the Southern Federal District (11%). It should
be stated that the indices of the official statistics
do not include individual enterprises and small
companies, the number of which is quite large in
all regions of the Russian Federation.
The shop of federal domestic jewellery chain still
remains to be the most popular place of buying
jewellery items: as a rule, 55,6% of customers buy
jewellery there. The incorporated chain of Russian
Jewellery Trade Club holds the strongest positions
in the regions. This indicates that customers trust
jewellery chains more due to certain services quality standard, the range and discounts provided.
State of Russian jewellery
industry
Only two of all trade manufacturing enterprises — Moscow Special Alloys Processing Plant
and workshops under the Administration of the
Russian President — are state-owned. Therefore,
there is nothing to hide in the fact that the forthcoming entry of Russia into the WTO makes heads
of jewellery plants worry. They would like to obtain certain fringes from the authority for a long
term transitional period. Presently this problem
is being actively discussed. The final decision is
expected to be taken in summer of this year. In
fact, Russian jewellers have already come down
from generalities to detailed business planning
under new conditions.
Leading manufacturers of gold jewellery:
• Adamas
• Diamant
• Krastsvetmet
• Topaz
• Bronnickiy Jewellery Factory
• Platina
• Estet Jewellery House
| 55
Jewellery manufacturers’ breakdown
by federal districts (2011)
4%
1%
1% 2%
1%
5%
8%
%
78%
• Krasnoselskij Jeweller
• Adamant
• Kameya
Leading manufacturers of silver jewellery:
• Krasnoselskiy Jewellerprom»
• Krasnaya Presnya
• Intersilverline
• Sidan
• Severnaya Chern
• Russkiye Samotsvety
• Adamant
• Bronnickiy Jewellery Factory
Major tendencies of the Russian market
1. The Russian market has saved its strengths for
a bound forward. This potential will be realized
during 2013–2018.
2. Foreign players are expected to generate significant activity at the Russian market, particularly
in the sphere of retail (this activity is caused by the
decrease in customer demand in European Union,
the USA and Japan).
3. Having weakened during the crisis of 20082011, pseudo-oligarchy will contribute to more
favorable competitive environment.
4. Fight of law enforcement agencies against
corruption, even if it turns out to be temporary
measures, will help Russian business environment
notably recover and attract many foreign investors.
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