The competition in the gems and jewellery industries around the world has been growing rapidly. The Thai gems and jewellery industry feels that it must be strong enough to face competition. Expanding into new countries is one of the main factors in furthering the Thai industry. It needs to advance the manufacturers’ abilities, upgrade and develop new technology, reeducate workers as well as understand and manage the laws of the international trade.

The Thai Gem & Jewelry Traders Association (TGJTA) has a plan to advance the Thai gem and jewellery industry mainly to two countries – India and China. Boonyong Assarasakorn, Chairman of Advisory Board of TGJTA and Prapee Sornkraikitikul, Vice-President of TGJTA, detailed further information regarding this plan. %% {{Why China & India:}} %% Prapee revealed that the main markets of America and Europe, over the past ten years, have been dropping. Investing in the new market is crucial for expanding Thai products as well as increased income. China is one of the destinations for investment. China has a population over a thousand million, and its economic growth is stable – about 9% per year. Two million of its population can afford luxury products like jewellery. Though it is a small group of people, they require high quality jewellery. %% Boonyong expressed his reasons of choosing India with over one thousand million population with its economic growth being second in Asia. India has signed the Free Trade Agreement for gems and jewellery since September 2006, expanding the colored gemstones and jewellery industry in India, the biggest manufacturer of jewellery in the world.

The Projects’ Progress:

Prapee disclosed that the first phase in the expansion of Thai gems and jewellery industry to China will be complete by the end of this year, or latest by early next year. when the Olympic Games will be held there, then Thai gems and jewellery will register an image there. In addition, the World Expo will take place in Shanghai in 2010, further expanding the market base %% Chairman Boonyong spoke regarding Thailand’s market share in India that it has been implemented while others are in progress. Negotiations with the President of the Gems & Jewellery Export Promotion Council and collaborative efforts expanding their markets into the global market are finalized. Recently TGJTA participated in India International Jewellery Show (IIJS). A Thai Pavilion was organized in which Thai manufacturers displayed and promoted their branded jewellery. Many projects are in the planning stages which are soon to be in operation. An example is to join the trade show syndicate in various Indian cities such as Kolkata, Chennai and Hyderabad; negotiate tax reduction and non-tariff; collaborative efforts between Thai and Indian manufacturers. %% In India, the VAT is not an obstacle to expand the market. It has been free since last year. Boonyong cited the importance of developing the Thai brand image in order to substantiate Thai products’ pricepoints.

Market Expansion in Two Countries:

Both Prapee and Boonyong share the same idea that expanding market in the two countries is an important factor to support and develop the industry. In India, it will especially support colored gemstones trade and jewellery supply chain. %% Chairman Boonyong disclosed that the aims of market expansion in India are to increase colored gemstones exports, to supply various colored gemstones, expanding the Thai market brand to other cities in India, apart from Mumbai, in collaboration with the GJEPC and to promote the Thai market share, thus to support Thai SMEs’ efforts.

Three Thai Advantages:

There are three things according to Vichai which are keeping Thailand more competitive than other markets of the world. Firstly, techniques of heating, secondly, technology of cutting and lastly, the network which has been developed over the years.

‘CHINDIA’ – Future Market:

According to Vichai Assarasakorn, CEO, Bangkok Gems and Jewelry Fair, “After withdrawal of the GSP benefit on Gold Jewellery of Thailand, the market share of Thailand in US has fallen. Now Thailand looks towards four growing nations, China, India, Dubai and Russia as its future markets.” %% When asked whether they face any fear from China and India after withdrawal of GSP on gold jewellery, Vichai said that they have to work hard, work more on their production, manufacturing and have to be more efficient. Competition is part of business, they have to face it and we believe that in long term world would benefit. He also added, “We do not see India and China as competitors rather they have been making efforts to cooperate and work as they see ‘Chindia’ as future potential markets.”

Krik-krai Jirapaet Emphasizes Thai Superiority:

Speaking at the opening ceremony of the 40th BGJF, Krik-krai Jirapaet, Minister of Commerce, said Thailand has played a crucial role in the international gems and jewellery trade. %% “In fact, there is no better place than Thailand to look for colored gemstones. The Kingdom handles about 80% of the world’s gemstones trade and a centre for gem polishing involving more than 300,000 craftsmen.” %% Krik-krai underlined the importance of gems and jewellery to the Thai economy and export drive. Gems and jewellery exports from Thailand last year exceeded US$3.6 billion, up 12.7% from the previous year, ranking 7th on Thailand’s export lists. In the first seven months of this year, Thailand’s gems and jewellery exports grew 5.41% year-on-year to $2.18 billion.

Reaching New Markets:

Meanwhile, the Commerce Minister and TGJTA executives have talked about Thailand’s bid to diversify its export markets beyond the traditional outlets such as the US which accounted for about 40% of its entire exports. %% TGJTA President Pornchai Chuenchomlada stated that Thailand is making a concerted effort to penetrate larger emerging new markets such as India, China, and Russia, in addition to expanding markets like the Middle-East and Scandinavia. %% “Establishing new markets will enable Thailand to expand its export volume and at the same time enlarge the global market for gems and jewellery”, he said.

India-A Partner:

According to Krik-krai, Thailand is seeking to enter those large emerging new markets, especially India, as a collaborating partner, rather than a competitor. %% “We feel that the industries of both countries can pool their resources and capitalize on their strengths to capture the extensive market potential which India has presented,’’ he explained. %% While India is endowed with raw materials and well-established production network, Thailand, on the other hand, is renowned worldwide for its distinctive expertise and excellent craftsmanship in jewel making”, he added.

Less Taxation, More Income!

Director General of Department of Export Promotion, Rachane Potjanasunthorn, observed that taxation is one of the industry growth’s obstacles. Tax structure of Thai gems and jewellery import and export is adverse compared to Hong Kong. Tax reduction helps to expand the market share and raise income, but the impact of reduction may affect other organizations and authorities, hence it needs careful consideration. The Commerce Ministry is now setting up the Committees both in private and public sectors to find a solution. One recent accomplishment of the committee- it has succeeded in tax-free pearl importing.

New Projects to Promote Industry:

The Director General revealed the current project to promote Thai gems and jewellery brand and industry in India. They attended the India International Jewellery Show and also signed an agreement on stage to market Thai colored gemstones jointly. %% Besides opening its retailing centre in China, it is promoting Thai gemstones, particularly colored gems there. %% Thailand has also been invited to collaborate in mining exploration in Pakistan and China. The explorations for gold, copper and silver are going on. The explored materials will be used in the gems and jewellery industry.

Expansion of Thai Gems & Jewellery into New Markets:

Rachane expressed that expanding market share in the new countries is a strategy for increasing Thai products. Yet it needs to analyze economic conditions of those, particularly economic stability and demand for luxury products. Organizing Thailand exhibitions is to advance Thai brand image and to be accepted by the customers. %% It should not neglect the old markets of Japan and America; instead it needs to rebuild the credibility, particularly the quality and standards of Thai gems and jewellery.

Trend of Thai Gems & Jewellery Exports in 2008:

Rachane further said that the trend of exporting Thai gems and jewellery is declining. Sales are down in USA which is one example. It needs to expand the exports into the new markets, thus exports may increase by 10%.