Do you remember, a roaming representative of my editorial team assessed Dubai as the emerging next Hong Kong of the precious world? Well, on a closer look during my February visit, I found that Dubai needs more kudos. It has not only been registering rapid growth by measured leaps and bounds, but has also been undergoing a transformation of sorts - from being the {{Gold City}} to becoming the '{{Gold and Diamond City}}' in the foreseeable future. Dubai Gold Group is spearheading the fast-track progress under the dynamic helmsman's ship of {{Tawhid Abdullah}}. For witnessing the unfolding of Dubai's ambitious plan.

I went there in February, 2005 on a four day visit which including attending the third {{City of Gold Conference-2005}} held there on February 21-22 as well as meeting a cross-section of Indian and other notables who determined together to hitch Dubai's wagon to the stars. %% The 3rd {{Dubai City of Gold Conference-2005}}, now recognized as one of the most important global events, concluded with the announcement of integrated global jewellery marketing plans. The {{Dubai Gold & Jewellery Group}} announced its commitment up to US$ 1 million towards global jewellery marketing, subject to the involvement of resources and leadership of marketing bodies, miners, bankers & other beneficiaries from the industry. The one and a half day Conference that attracted many of the world's most powerful gold and jewellery representatives came to a close with the launch of a committee that will be responsible to collect funds from various sources and promote jewellery globally as a single category. %%{{ Collective Initiative: }}%% The Committee chaired by {{Dr. Paul Walker}}, Chief Executive Officer, {{Gold Field Miners Services Limited (GFMS) }}will help position the category to achieve future growth by effectively positioning jewellery against other lifestyle options. This is for the first time that a jewellery marketing focused initiative has been established and the need to market jewellery as a single category including gold, diamonds and pearls has been endorsed by the panelists representing the industry.

Beeline to Dubai!

Indians, shrewd businessmen as they are, have noted the writing on the wall. Yes, it is agreed, a very fruitful future belongs to Dubai, the fast-track gems and jewellery emirate of West Asia. Consequently a beeline of Indian precious traders to Dubai has already started.

"Most of the 300-odd Indian diamond companies operating from Antwerp already have their offices here and may of the Indian firms of Mumbai have a base here too", according to {{Harshad Mehta}} of {{Rosyblue}}, Dubai. %% In 2003, the rough trade from Dubai was US$ 1 billion. In 2004, this figure was around US$ 1.2 billion. It is gateway for rough into CIS and nearby countries with exports equaling those of South Africa, Namibia and Angola. Polished figures may be in the same region, if not more. %%{{ Attracting More Diamantaires: }}%% Dubai is a strategically located business hub that links the East to the West. Logistics and time zones are in its favour. It is also a gateway to the economically strong Gulf region, with Saudi Arabia already being described as the third largest market in the world. %% In 2006, the Almas Tower will be ready, which will be the culmination of an initiative taken by the DMCC to promote the infrastructure for diamond trade. This, along with other government-supported moves, will bring still larger players into the country.

{{Free Zone Guarantee: }}%% The Government is doing its best to invite businesses to flourish here and takes care not to create any hurdles for legitimate businessmen. %%{{ Tax benefits are guaranteed for 50 years in the Free Trade Zone. }}%% All these factors play a crucial role in the growth of the diamond industry in Dubai and people from Antwerp, mostly Indians, will be moving here in a big way. This is already being felt in Antwerp and has been openly spoken about by the industry organizations there. %%{{ Congenial Environment for Indians: }}%% More Indian are expected here since Dubai offers better business environment and it is more close to India. An added benefit is that the lifestyle here reflects Indian tastes in many ways.

The working group including senior industry representatives such as: {{Tawhid Abdullah}}, Chairman, Dubai Gold and Jewellery Group; {{Philip Olden}}, Managing Director, Marketing & Jewellery, World Gold Council; {{Dr. Gianluca Zucchi}}, Chief Executive Officer, UNOAERRE, {{Nick Speyer}} also from UNOAERRE; {{Jonathan Chippindale}}, Marketing Director, Gulf Diamond Trading Company, De Beers Group, {{Dr. Gaetano Cavalieri}}, President, CIBJO; {{Rian Raghavjee}}, Projects Manager (Marketing), AngloGold Ashanti and {{Jean Daniel Pasche}}, President, Swiss Watch Federation will form a 'Quasi Business Plan' to take the initiative forward. %% Dr. Cavalieri, President of the World Jewellery Confederation (CIBJO) has extended wholehearted support and has endorsed the need of the formation of a unified body. %% The Conference was hailed by participants as a huge success. Representatives attending from different parts of the world, outlined how the event offered a unique opportunity for all segments of the gold and jewellery value chain to come together and interact for unifying the industry's commitment to quality development. %% Announcing conditional commitment of upto US$ 1 million towards global jewellery marketing initiative, Abdullah said, "There is a need for wider consensus and there is a willingness from all sides. We invite others to assume leadership to capitalize individual resources. It has to be a common effort and general commitment from all partners."

Brand-the path for Success

{{Andrea Broggian}} - President, Club degli Orafi and CEO Broggian SPA, spoke at length about the branded jewellery thrust that has overtaken the global jewellery sector. He claimed that the current market rewards the brand, therefore the path for success is BRAND. Nevertheless the identify of brand is confused with brand image. Currently the jewellery people are spending only a meagre 0.1% of the value of sales of jewellery on publicity, while luxury goods enjoy 10% expenditure and watches 6%. %% He went on to enumerate the essentials for creating a successful brand: $$ {[ Create an excellent product. ][ Adopt Strong Marketing Culture. ][ Employ great entrepreneurship. ][ Be clear about its strategy. ][ Ensure significant financial backing. ]} %% He advocated placing jewellery in the center of a system that conveys style and value. %%{{ Italian Advance: }}%% He also disclosed that keeping the essentials in focus, Italy is poised to launch new brands of steel jewellery!

Global Strategy:

"This Committee will develop a Global Strategy, which uses our collective resources to create a campaign & a positioning that builds a relevant as well as an appealing image to younger audiences and modern consumers," he added. %% "The Committee has been constituted a assist the industry to put in place the specific industry infrastructure required to add value to our respective businesses," says Dr. Walker. "We are all here with a unified purpose - to convene, interact, debate and, as a result, to set new global standards in production, marketing and regulation across all areas of our business. I feel that we have succeeded to do all this over the last couple of days and are now in a position to consider the creation of a worldwide jewellery marketing body," he added. %%{{ DTC Assurance: }}%% "Every single person in the value chain is thinking about innovation - a responsibility that should be assumed by the industry as a whole. I'm more than delighted to participate in this initiative and as a group DTC is willing to create a platform for the benefit of all," commented Jonathan Chippindale. %%{{ Branded Jewellery Lagging: }}%% On the second day of the Conference, while speakers were focussing the need to boost jewellery, one of them revealed the surprising fact that so far branded jewellery claims only a 5.5% (US$ 7 billion) share of the nearly $ 130 billion global jewellery sales, while perfumes and watches have switched over to branded varieties by 80%! %%{{ Jignesh Shah}} M.D. of Multi Commodity Exchange of India briefed the Conference about India's experience about multi commodity dealings. %% Highlighting the strategic importance of this event to the jewellery industry, key sponsors included WGC, Standard Bank and global industry leaders including American Express, DCB, Diamond Trading Company, Fiera Di Vicenza, Perles de Tahiti, National Bank of Dubai-Scotia Mocatta and UNOAERRE. It was organized with the support of the Dubai Metals & Commodities Center.

Expanding Jewellery Horizons....

After observing Dubai's current precious position, I went about assessing its progressive future prospects. In this exercise I found Rosy blue's Harshad Mehta very well-informed and helpful. He views the future of Dubai optimistically and foresees progress by leaps and bounds. Somewhat surprisingly he predicted that soon this fast track Emirate will be known as not only the Gold City but also 'Gold and Diamond City'.

Cavalieri Lauds Abdullah's Initiative

{{Gaetano Cavalieri}}, President of CIBJO, The World Jewellery Confederation, has praised the pledge made by {{Tawhid Abdullah}}, the head of the Dubai Gold and Jewellery Group, at the Third Dubai Conference to raise the equivalent of US$ 1million to advance an integrated, global plan for marketing jewellery in the luxury product consumer markets. "This is a tremendous step forward in the global effort to promote jewellery sales worldwide," Cavalieri stated. "As the President of CIBJO's Marketing Commission, which was formed at the CIBJO Congress in 2004, Abdullah has shown great leadership. %%{{ Committee for Global Initiatives: }}%% At the third Dubai City of Gold Conference participants agreed to establish a committee that would endorse a single, focused initiative to help in market jewellery effectively. Paul Walker, CEO of Gold Field Mineral Services, was selected to chair the Committee, which was charged positioning jewellery against other lifestyle options in the market and achieving real growth. The Conference agreed that a unique opportunity had been presented for all segments of the precious metals, gemstone and jewellery value chain to act together. %%{{ Emphasis on More Publicity:}}%% Cavalieri was one of the main speakers in a session dedicated to "Global Jewellery Marketing." In his speech, the CIBJO President warned that the new-and often quite young-consumer markets may need special attention, in order to convince its consumers to purchase jewellery. "In this information age, the younger consumers especially may be losing interest in jewellery products. Not only are they being enticed by other products that are highly appealing to them but they may not even find the marketing message of jewellery appealing enough," Cavalieri noted.

Harshad Mehta predicted that up to 2007 more diamonds will be sold in Dubai than India through tourist business. Here retail business is very flourishing. Out of 800 retail jewellery store 60% are now offering diamond jewellery. %% He revealed that diamond jewellery is retailed cheaper in Dubai compared to USA or any other place. The credit available to the jewellery manufacturer on diamonds is from 6 to 9 months but the money involved is secure. %% Harshad Mehta opined that gold jewellery in Dubai has purity, good designs and competitive, the margins are limited, hence customers get good value; the retailers also have more turnover.

Much More Advertising Needed

Realizing that traditional gold jewellery in losing ground gradually, the big wigs of the sector had to sit up and take note at Dubai, to fuel a global remedial thrust. One may ask - Why is drastic action needed? Because if they don't act today, the potential customers of tomorrow will be lost to the luxury goods industry forever, confining gold to history as a relic of a bygone age. %% The problem is young Indian women. Traditionally, this group has driven the world's gold jewellery industry. At weddings, Diwali and birthdays, Indian damsels aspire to receive as much ornate jewellery as their friends and relatives could afford. %% Jewellery makers have assumed this passion for precious metal would last forever. It has not. Abdullah is the first to admit that his chain of gold shops is struggling to attract customers in the 15 to 25 age bracket. %% He says that globally, the gold jewellery business spends 0.1 per cent of its revenues on advertising. Compare that with the likes of Louis Vuitton who spend around ten per cent of their revenues on advertising - 100 times more than jewellers! %% The World Gold Council has run a global marketing campaign specifically targeting younger women. And the industry is designing contemporary jewellery in 18 and 22 karat gold - less yellow than the pure 24 karat gold cherished by older generations of Asians - to win over a younger audience. %% It has enjoyed some success. Figures from the Council will show that global jewellery demand increased in 2004, for the first time since 1997. But still jewellers must not get complacent and believe that the job is done.`

According to Harshadbhai, Indian jewellery has no market in Dubai, because local jewellery is better than Indian products. Additionally, jewellery from Turkey and Italy is also coming to Dubai, with which India is not in a position to compete.%% Harshad Mehta expects Dubai to be the next main diamond trading center which would also sell rough from various sources to diamantaires. In this context he noted that most of India's rough diamond buyers travel to distant Antwerp. But after Dubai's {{Almas Tower}} is commissioned and rough is offered to them here, Indian buyers would prefer to fly to Dubai which is only 3 hours away from Mumbai by air. He added that Dubai is destined to achieve much more than presently foreseen. The present {{Capital of Gold}} is to become the Capital of {{Gold and Diamonds!}}

Fabulous Royal Purchases!

Harshad Mehta revealed an interesting exceptional fact of the growing diamond jewellery trade in Dubai. He recalled that the Royal family places huge orders amounting to millions, sometimes for as many as 50 or 100 sets of diamond jewellery! Whenever there is a birthday celebration or some other function in the Royal household, diamond jewellery sets are gifted to near and dear ones to commemorate the occasion and share the joy generously. %% He added that because of the growing diamond market; Indian nobles like Super Gems, Rosyblue, J.B. Jewellery, Diasqua, etc. have already branched out to Dubai and many more are planning to join the expansion.

Gradual decline in gold as the dominating commodity has been noticed lately. Much gold used to be smuggled to India from Dubai. Additionally the large number of Indians employed in Dubai used to carry gold when returning home. But lowering of duty on gold in India has reduced the price differential, therefore demand for gold has declined sharply, with the result that those dealers who were offering only gold jewellery, had to take on diamonds & colored gems studded jewels for survival. %% I also had a chat with a dealer of the Gold Souk area, who has started retailing diamond jewellery as well. He disclosed that most of his customers are Europeans. When they find the price level cheaper here, they prefer to purchase diamond jewellery. He added that the publicity undertaken by De Beers since last year has boosted diamond jewellery sales. {{Deven Vakil}} of {{J.B. Jewellery}} was happy to report that his jewellery sales have doubled over the last 2 years.

Good Going on the Business Front

{{Ashok Sakariya of H. Vinod Kumar & Co. }}who has been running an office in Dubai for the last 3 years, said that in Dubai his firm's main focus is jewellery made in India and Thailand. We doing very good business and our customers too are very satisfied. We are selling mostly to wholesalers. We are selling commercial range. In Dubai we are getting good facilities. Every year we are increasing our sales", he told me. %% Our current plans are to develop jewellery manufacturing with new technology. %%{{ New Factory }}%% He added that in India they have just started a factory with 150 workers. This number will eventually go up to around 400. They are exporting to Europe also. %% "In Dubai we are selling diamonds on credit basis while jewellery is offered on cash terms", he said. %% Hareshbhai Sakariya is the Managing Director of H. Vinodkumar & Co. while Dinesh Sakariya is managing the Dubai office.

Indian jewellers at Dubai generally acknowledged that they are fearing keener competition with jewellery from Lebanon and Turkey because their jewellery designs are more Arabic which appeal to the connoisseurs of Dubai. Jewellers here generally stock two categories of good. One category for catering to European taste moves in wholesale business. The other conforming to Arabic taste is exclusive, of high range and best quality. It is for the Royal family or sold at selected stores at malls. Jewellers selling Arabic jewellery here are usually those who are also doing jewellery business at Kuwait, Abu Dhabi, Muscat, Qatar, etc. In Saudi-Arabia, these big operators have about 15,000 showrooms & enjoy brisk jewellery sales.