As the Dubai International Jewellery Week (formerly known as Watch & Jewellery Dubai) show approaches, one cannot but reflect on the positive development that we see taking place in the emirate. Trade and commerce are booming, construction activity is proceeding at a brisk pace and the number and quality of tourists who go there, mainly for the shopping, especially jewellery, is amazing.

Dubai has worked hard this year to establish itself as a hub for the diamond, gemstone and pearl trade through programmes commissioned by the DMCC. However, there are many hurdles to cross before Dubai reaches the potential envisioned by the DMCC. First, gems pose major challenges because skilful imitations, substitutes and enhancements mean fraudulent products can often pass as genuine stones. Grading and pricing are also difficult to pinpoint and require considerable industry experience.

Dubai also has significant customs issues complicating efforts to do business with international players, several exhibitors at the show said. Markets around the world have implemented the ATA Carnet System permitting tax exemptions for goods temporarily admitted into a country, for example, for exhibitions and trade shows. Dubai has not implemented this system – something officials said was one of the major challenges they faced in growing the local industry.

The research, a first for the region’s coloured stones industry, was commissioned by the DGC and carried out by the US-based Jewellery Industry Research Institute and UAE-based BUZ Consulting. 

Key research findings reveal that of the projected jewellery sales mix over the next three years, coloured stones will account for 26 per cent of total jewellery sales in Dubai by 2011. Whilst historical sales data is not recorded, it is estimated that coloured stones sales currently represent a small percentage of overall jewellery sales. 

On a global basis, the market for all gemstones stands at US$80 billion, representing 55 per cent of total global jewellery industry sales. The global gemstone market includes roughly US$10billion of coloured stones and US$70 billion of diamonds and diamond jewellery.

The survey also reveals that coloured stones trade is expected to grow at around six per cent annually by 2010, in comparison to the growth rate of diamonds, gold and all other forms of jewellery. 

The projections show that the coloured stones market will post exceptionally strong above-average growth over the next decade, both in Dubai and the Gulf region, as well as globally. Coloured stones jewellery demand is expected to surpass demand for other jewellery categories. Dubai is particularly well-positioned to take advantage of the increased trading requirements of this rapidly growing jewellery segment and further capitalise on the growing tourism market.

In further findings, coloured gemstone dealers cited that rubies, sapphires and emeralds were the fastest selling coloured gemstones, comprising 44 per cent, 28 per cent and 24 per cent respectively of their gemstone inventory. Traders and consumers also highlighted their preference for oval shaped coloured stones set in 18 karat white and yellow gold.