“Greetings from UnderWorld” - BaselWorld 2016 Meeting (Modest) Expectations

Market Analysis
22/03/2016 14:42

Over halfway through BaselWorld – still the number one appointment in the global luxury watch and high-end jewelry industry – the warm spring sun and blue skies of the first days in Basel have given way to a cool 6 C° and bland, grey skies. Much like the temperature, the mood has dropped significantly as well. Last year, after five years of consecutive growth, Swiss watch exports fell 3.3% globally, echoing the struggle the entire luxury segment has been experiencing for the past year and a half. Throughout the various Halls at BaselWorld, the gloomy pre-show forecasts seem to be confirmed; less foot traffic and slow business are par for the course. The Diamond Loupe takes stock of BaselWorld from a diamond industry perspective and looks at how the prevailing low sentiment is reverberating upstream in the diamond pipeline.

Several BaselWorlds

While the multi-million-dollar, multi-level, architecturally top-notch exhibitor structures – the terms ‘booth’ or ‘exhibitor stand’ simply don’t do them justice – of the world’s high-end watch and jewelry brands certainly catch the eye and are virtually impossible to ignore, there is more to see at BaselWorld than watches alone. One might even say there is more than one BaselWorld.

Hall 1 is obviously UpperWorld, while Halls 2 and 3, which are home to (smaller) international jewelry brands and the stones & pearls section, constitute MiddleWorld. Hall 4 definitely fits the title UnderWorld, considering this exhibition space is not only physically detached from BaselWorld (and hard to find for that matter, as printed maps were seemingly unavailable, particularly for Hall 4.U), but is also different in every way from the quality you find across the street. This is especially the case in the new 4.U Hall in terms of execution (cheaper-looking booths) as well as concept (a disorganized mix of loose diamonds, gemstones and jewelry manufacturers combined with a strikingly large amount of absentees). In every sense, the grandeur of UpperWorld is (too) far away.

What is also clear is that as you go lower on the rungs of these BaselWorlds, the number of visitors decreases rapidly, and a significant amount of people, like specialized press and visitors who only spend a day or two at the fair barely make it beyond UpperWorld.

Continuity

The Antwerp diamond companies present in the Hall of Elements (Hall 3) acknowledge that traffic was on the slow side, but being present at BaselWorld does hold significant added value, for veterans as well as for first-timers. Raphael Rubin of the eponymous diamond company Rubin en Zonen: “It is the first time we have had a booth here, but Basel has been a fixed appointment on our calendar for the past 30 years. Regardless of the mood on the market, it is and remains the number one fair for the European market, an excellent occasion to meet with existing business partners and build your network.”

Rosy Blue, participants at BaselWorld for over a decade, says it is all about consistency and quality. “BaselWorld, with its atmosphere of luxury and high quality, ties in perfectly with what we do, it aligns with what Rosy Blue has to offer”, says Raj Mehta, Director of the Antwerp-based diamond company. “It is true that trade has been slower in the past year. But we are in it for the long run and we do not base participation on short-term circumstances.” For the Antwerp diamond companies, the BaselWorld fair is a matter of confirming existing or establishing new long-term relationships as a supplier.

For Rare Diamond House – a company that specializes solely in D Flawless diamonds that are 10 carats and larger, manufactured only in Antwerp – the decision to participate for the first time proved to be a wise one. Oded Mansori says the company prides itself on its uncompromising choice for absolute perfection and quality, and as such, being at Basel was the natural thing to do. “Basel is all about the high-end, top segment, and what we offer fits in perfectly with that vision. Not only because our diamonds are exceptional, but also because they represent a very solid store of value for people who are interested to diversify their investment portfolio. That is something visitors have clearly noticed”, Mansori says. Based on the buzz around Rare Diamond House’s booth, differentiating oneself from one’s competitors by focusing on a well-defined niche does indeed seem to attract more attention from visitors.

The Verdict

If there were any negative comments to be heard by the Hall 3 exhibitors, this would be about the trend towards ‘fair cannibalism’; jewelry and gem fairs have mushroomed over the past year and are following up one another other too quickly. Raphael Rubin: “You can’t expect that the same buyers who have just visited a fair in Hong Kong will turn up again just two weeks later at another fair to do business. People need the time to digest their purchases before they decide to place new orders.”

In Hall 4.U, the basement of the detached Hall 4 which in past years was the area designated for equipment exhibitors, participants reported traffic was slow, which they claim could have been better if this section of the BaselWorld fair were to be promoted properly. Most visitors who did eventually find the tucked away floor agreed that it took them quite some time to actually find the place. Or, as one Hall 3 exhibitor said, “I tried to go there, but I simply couldn’t find it, there is no signage at all, nothing to point people in the right direction and a map simply couldn’t be found.”

If the BaselWorld organizers are planning to continue the concept of an additional, lower – but still very pricey! – threshold hall for diamond and gemstone companies, which would be especially welcomed by smaller and medium-sized diamond companies, they should start thinking on how they can improve the concept and generate more traffic, and most importantly, they should stop treating Hall 4 as an UnderWorld.

© The Diamond Loupe