27 Feb 2015
Diamond of the Orient
As a non-profit organisation, DFHK seeks to promote the diamond industry and protect consumers by rigorously upholding stringent industry standards. After launching the Integrity Pledge Scheme in 2000, DFHK is set to introduce the Natural Diamond Quality Assurance mark (NDQA) to provide further quality assurance and raise confidence in buying natural diamonds.
DFHK President Lawrence Ma, who is also the Chairman of the organising committee of this week’s HKTDC Hong Kong International Jewellery Show and International Diamond, Gem & Pearl Show, explains Hong Kong’s role as Asia’s diamond trading hub.
Tell us about DFHK’s role in promoting the industry in the city.
Historically, there were two associations related to the diamond industry in Hong Kong: the Diamond Importers Association, which was set up in 1957 to protect and promote the interests of the diamond industry as well as diamond jewellery consumers. The Hong Kong Diamond Bourse was established in the mid-1980s. Since Hong Kong has always been an important trading hub, there was a feeling that we needed to have a bourse to facilitate future development.
In 1997, since most members belonged to both associations, we decided to consolidate in order to enhance efficiency and effectiveness. By 2000, the two associations merged into the Diamond Federation of Hong Kong, which has three member categories from different segments in the local industry: diamond manufacturers, diamond importers and wholesalers, and diamond jewellery retailers.
Give us an overview of the diamond jewellery industry globally and in the region.
The United States remains the world’s largest diamond consumer, with over 20 per cent of the global market share. The fast-growing Chinese market makes up about seven per cent, followed closely by India. China is definitely a market with vast potential for diamond and jewellery sellers. Data shows that less than 30 per cent of people in Shanghai own a diamond product. While in a mature market such as Hong Kong, the figure is as high as 80 per cent. Considering the size of the market, including metropolitan cities such as Shanghai and less-developed third- and fourth-tier cities, there is indeed great growth potential in China.
Smaller diamonds are gaining popularity among jewellery designers as these enhance creativity in the field of fine jewellery. Designers are also putting diamonds into watches, transforming them into luxury jewellery pieces.
Another point worth noting is the diamond supply side. There has not been any major new discovery of deposit in the last decade and the projected aging in several existing mines will mean a gradual decline in supply in the foreseeable future.
Natural diamond, like gold, can preserve its values in the longer term, and in the most condense form. With the world economy under the cloud of deflation, the price of diamond has marginally softened technically since the second half of 2014. However, in the longer term, diamond is expected to hold its value well.
How has the sector been affected by the Chinese mainland’s anti-corruption drive?
The anti-corruption effort in China is a necessary measure to ensure long-term economic health as well as sustainable growth and social development. The outlook for the industry is therefore positive, despite the short-term effect on sales growth.
Tell us more about the new NDQA mark, which the Federation is about to launch.
The DFHK has worked closely with the Hong Kong Customs and Excise Department for years to ensure goods and services sold or provided in Hong Kong, whether it’s B2B or B2C, match with the product and service description. Under the Trade Descriptions Ordinance, it is a criminal offence for a seller to deliberately conceal or provide false trade description or sell synthetics as natural diamonds.
NDQA is designed to reinforce the values and integrity that form the basis of Hong Kong’s diamond industry by ensuring that the interests of consumers are protected. DFHK works relentlessly to bring transparency and strict compliance in the industry to ensure that consumer rights and benefit are served, social justice is protected, and the industry will continue to thrive.
How can the NDQA mark help further develop Hong Kong as the region’s diamond trading hub?
In the near future, we will expand the NDQA mark scheme to upstream suppliers to ensure full compliance throughout the entire supply chain. We are confident that these combined efforts in the pipeline will ensure a continuous and healthy growth in the diamond industry.
What can we expect at the March Hong Kong jewellery shows?
This year, we have more than 4,000 exhibitors from over 50 countries, an increase of 12 per cent from last year. We expect the number of buyers to increase proportionally from more than the 70,000 in 2014. In addition to the exhibition of the widest range of products from different parts of the world, the show also features more than 30 events over the seven-day period, including jewellery parades to showcase the newest designs, seminars to provide the most updated information to the industry members, and networking receptions to create business matching and opportunities.
With a substantial exhibitor waiting list and growing number of visitors from around the world, we are encouraged that the March Hong Kong International Jewellery Show is an event that no participant in the industry would want to miss.
Diamond Federation of Hong Kong