Editor’s Note
This article highlights the ongoing challenges facing South Korea’s jewelry industry, as detailed in coverage of the 2014 Korea Jewelry Fair. It examines how high prices, driven by tariffs and taxes, are deterring buyers and contributing to a contraction in the market.
The ‘2014 Korea Jewelry Fair’, jointly hosted by the Korea International Trade Association (KITA), COEX, and major domestic jewelry and watch-related organizations, concluded its four-day run on the 27th.
Now in its 12th year, the Korea Jewelry Fair, which first started in 2003, had maintained a growth trend but began to gradually shrink in scale from around 2008, and this year was no exception. Many representatives of domestic companies participating in the booths this year expressed dissatisfaction, noting a sharp decline not only in new overseas buyers but also in existing ones.
What is the cause of this strange phenomenon of the Korea Jewelry Fair consistently regressing? Faced with this situation, domestic company representatives unanimously pointed to ‘systemic problems’. They highlighted that the institutional environment, including tariffs and various taxes, makes it difficult for foreign buyers to participate, which is the biggest issue.
The Korea Jewelry Fair is in a position where it inevitably faces rejection from buyers. Jewelry is a fiercely competitive industry where survival depends on lowering unit costs by even a single won.
This becomes easier to understand when compared to the world-renowned Hong Kong Jewelry Show. Companies line up to participate in the Hong Kong Jewelry Show, which is held three times a year. This reporter has also visited the Hong Kong International Jewellery Show several times, and regardless of the exhibition hall’s size, the Hong Kong show feels like a ‘festival ground’ for jewelry-related companies. One cannot help but marvel at the continuous stream of buyers from all over the world.
Accordingly, countries like Thailand and Malaysia have recently implemented duty-free policies during exhibition periods to secure price competitiveness.
But what about Korea? There are fewer than 10 participating foreign companies and less than 300 domestic companies. And this number is decreasing. An industry official participating in a booth expressed,
Given this situation, the organizers were likely busy worrying about how to fill the vast COEX venue, let alone creating a festive atmosphere. Additionally, criticism arose that ‘there are only many students’. A representative from an exporting company participating in a booth complained,
Indeed, students are somewhat distant from commercial aspects and may not be helpful to companies. However, we all understand that, as future industry professionals who will ultimately shoulder the industry, they need to gain experience through exhibitions, so their visits must be accepted to some extent. This only adds to the bitterness, highlighting how desperate the industry’s situation has become.
After the exhibition ends, we move past various critiques to worrying about the survival of the country’s only international exhibition. It is time for the Korea Jewelry Fair to find a fundamental solution. For the expansion of the exhibition and the future of the jewelry industry, government support through tax system improvements and expanded participation support is essential. The Korea Jewelry Fair is in too much danger to be satisfied with being the ‘only domestic venue’ to access diverse jewelry-related information in one place.