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Vicenza Fair urges jewellers to face economic challenges

VICENZA, Jan 11, 2009 - VicenzaOro First, one of the world's leading jewellery trade fairs and the first big event of the global jewellery calendar, opened on Sunday with calls for innovation and creativity by the Italian sector to overcome the severe economic test of 2009.

The Italian gold jewellery trade has been hard pressed by competition from developing countries, such as India and

China, which have improved their manufacturing skills and benefited from having far lower labour costs. Italian jewellery manufacturers also say they are handicapped by an inequitable import duty regime in key markets.

Leading officials of the Vicenza Fair appealed to Italian jewellery manufacturers to bring innovation and creativity to the fore in order to overcome the double challenges of an unfair global trade environment and the reality of the worst economic downturn in living memory.

"We have to change because these factors are having an impact on the everyday reality of our companies," Dino Menarin, President of the Vicenza Fair, said in a keynote address to an inauguration ceremony attended by a few hundred of the elite of the Italian goldsmith sector.

"We need to re-think the way we operate. We have begun our journey, but it has not been easy and it will not be easy."

In a round table discussion, Domenico Girardi, Chief Operating Officer of the Vicenza Fair, said that creativity and innovation were the key words to inspire the Italian gold jewellery manufacturing and export sector against such formidable challenges.

Girardi added that the "Made in Italy" marketing concept, which underscores the high quality of jewellery manufactured in Italy built on centuries of tradition inspired

by family-run companies in centres such as Vicenza and Valenza, would remain vital to differentiate the Italian product in international markets.

"We will have a difficult year (in 2009)," he said. "The 'Made in Italy' branding remains fundamental. The identity of our product can provide a solution (to the economic crisis)."

Antonio Tajani, Vice-President of the European Commission, said in his keynote speech that the Italian goldsmith sector would not escape the impact of the economic crisis, but he was optimistic that a recovery in global economic conditions could come in 2010.

STATISTICS HIGHLIGHT TOUGH MARKETS

Menarin said that, according to the latest available figures, Italian gold and silver jewellery exports fell by 5.5 percent in value and 8.2 percent in quantity in the first nine months of 2008, compared with the same period of the previous year.

Italian jewellery sales to the United States, which for many years used to be the number one market, fell by 28.3 percent in the first nine months of 2008 year-on-year to 348.8 million euros. The U.S. is now the number three market for Italian jewellery exports.

The United Arab Emirates, buoyed by oil revenues, has become the number one market for Italian jewellery exports, accounting for 16.4 percent of the total market share.

Sales of Italian jewellery to the UAE grew by 14.6 percent year-on-year in the first nine months of 2008 to 515.2 million euros.

Exports to Switzerland, the number two market for Italian jewellery, rose by 4.9 percent year-on-year to 365.5 million euros in the January to September 2008 period.

COMMUNICATION OF A BRAND

In the round table discussion, delegates spoke of the need to invest in communicating a brand despite the harsh economic climate.

Mario Attalla, Managing Director of Grey Worldwide Italia, spoke of Morellato's effective video advertising which highlighted its latest jewellery creations.

"When we enter a recession, the trend is to close one's wallet," he said. "But we need to invest. A brand gives a return."

The January edition of the Vicenza Fair, known as First, runs from January 11 to 18.