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J E W EL L ER Y RUS SI A

â„– (8) Januar y, 2012

Official REPRESENTATIVE in Russia

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Russia Becomes WTO Member JUNWEX Moscow Jewellery Show Watch Industry in Russia: Prospects


JEW ELLERY RUSSI A

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DISTRIBUTION OF THE MAGAZINE

Frequency

 99% of jewellery retailers and wholesalers of Russia

7 issues a year

Circulation 

14 000 copies

116 pages

 The fairs of jewellery RUSSIA Exhibition Programme

The most distributed B2B magazine on the jewellery market of Russia Advertisement space First cover Second cover Third cover Fourth cover First page advertisement Two pages advertisement Full page advertisement 1/2 page advertisement 1/3 page advertisement

Price 5030 euro 3350 euro 2290 euro 3960 euro 2440 euro 3050 euro 1830 euro 1230 euro 780 euro

You can place in our magazine: • Full page advertisement: we can produce the comprehensive model • Editorial article, interview: assistance in article writing • “News” Section: article about novelties, manufacturing, congratulations, etc. International Department Tel.: +7 812 303-98-60 Fax: +7 812 320-80-99 E-mail: secur@restec.ru


Dear Reader, W

e would like to present the latest issue of the international edition of the JUNWEX Jewellery Russia Magazine – a project of RESTEC JUNWEX Media-Holding, Jewellery Russia Publishing House and Russian Jewellery Trade Club. This issue includes the most interesting and up-to-date information for the international jewellery market: analytical reviews comprehensively characterizing jewellery business in Russia and articles about operational experience of foreign companies on the Russian market, as well as interviews with representatives of the industry reflecting prospects of cooperation with foreign partners. JUNWEX Jewellery Russia, established by the Russian Jewellery Trade Club and RusJewellerExpert Consulting Agency, is the most distributed and reliable В2В edition in the Russian jewellery market. The target audience of the magazine comprises investors, CEOs, commercial directors, top managers, heads of sales departments, commodity researchers, jewellery enterprises of small, medium and large scale, and everybody who is interested in further development of business in the jewellery industry. The magazine JUNWEX Jewellery Russia is distributed: • to a database of members of the Russian Jewellery Trade Club including more than 7000 most significant jewellery stores in Russia; • to a database including all manufacturing enterprises from the jewellery industry; • to participants and visitors accredited at all Jewellery Russia Programme Exhibitions; • to a list of VIPs (state officials, regional administrations, business elite); • to subscribers. The materials of this edition represent a comprehensive range of information relevant for jewellery business. JUNWEX Jewellery Russia is a professional tool for establishing partner relations and effective promotion of business. We are sure that every reader of the English edition of Jewellery Russia Magazine will find on its pages not only interesting, but also necessary and helpful information regarding the Russian jewellery market.

Jewellery Russia Publishing House is a recognized leader in the market of mass-media industry in terms of circulation: 2,500,000 hard-copies of B2B JUNWEX Jewellery Russia magazine annually, and this figure is constantly increasing. It also publishes B2C “The Best Adornments in Russia” magazine (155,000 copies, 8 issues per year) presenting key information about the latest trends in the jewellery industry.


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Editorial Market

JUNWEX – Jewellery Russia Magazine is the official media partner of CIBJO (World Jewellery Confederation) in Russia EDITORIAL BOARD V. Budny, Head of Jewellery Russia Programme B. Borisov, First Deputy Director of Russia Assay Office O. Mironova, General Director of RusJewellerExpert Consulting Agency A. Gorynya, Chairman of Russian North West Union of Jewellers G. Kovaleva, Chairman of Judges of a Jewellery Contest within the Jewellery Russia Programme G. Cavalieri, President of CIBJO D. Percossi Papi, Jewellery Designer, Italy T. Noskova, Deputy Chief Editor V. Puryguin, Director of Jewellers Guild GOLDEN RING of RUSSIA K. Avakyan, President of FORMIKA Company V. Meshalkin, Federal Jewellery Holding GOLDEN STANDART

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Russia Becomes WTO Member Events

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JUNWEX Moscow 2011 Russian Watch Salon JUNWEX Watch

ESTABLISHER Russian Jewellery Trade Club RusJewelleryExpert Consulting Agency EDITORIAL STAFF V. Budny, Publisher T. Noskova, Editor-in-Chief I. Fedorova, Script Editor Y. Runova, International Department Editor A. Dobrov, Art Director T. Usik, Designer V. Revelisov-Krumer, Project Director E. Popova, Photographer (Photo Studio JUNWEX) L. Lebedeva, Proofreader D. Ivanova, Subscription Department D. Popova, Circulation Department I. Kadzhaya, International Department Manager ADDRESS 12 Petrozavodskaya St., St.Petersburg, 197110, Russia Tel.: + 7 812 303-98-60, +7 812 320-80-99 E-mail: secur@restec.ru www.junwex.com Printed by ScanWeb OY, Korjalankatu 27, 45 130, Kouvola, Finland. 5 000 copies. Materials are not returned and not reviewed. All rights reserved. No part of this publication may be reproduced in any form without the written permission of Jewellery Russia Magazine. Reference to the journal is required. Jewellery Russia Magazine is registered by Federal Service for Supervision of Legislation in Mass Communications and Protection of Cultural Heritage in the Russia’s North-West Federal District. Registration Certificate PI #FC2 - 8476.

Jewellery Market & Statistics

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Jewellery Exhibition: Market Monitoring

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Statistics on Demand


Watch Market

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Watch Industry in Russia: Prospects

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Raketa brand is alive;

Brands

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Luxury made in Russia Samorodok: new horizons Wear Corum and support Zenit

Russian Jewellery Trade Club

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Reliable Partner 2011 Russian Jewellery Trade Club presents...

only it has slept for some time


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4 Market JUNWEX magazine

Russia Becomes WTO Member

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n 16 December 2011, Russia signed a protocol of accession to the World Trade Organization. The subsequent international ratification procedures will last 220 days. Russia is to become a full member of the WTO no later than 23 July 2012. From this point the integration into the growing Russian jewellery market will have a new perspective and will presume higher efficiency of all processes. What forms will this integration take: either a mere increase in importation of products into Russia or inflow of new investments into the jewellery business on the Russian market? This question is being actively discussed in the jewellery community. Both are likely to occur. The developed infrastructure of the domestic jewellery market with diversified retail chains and a large number of up-to-date manufacturing enterprises, presence of regions that are historically related to the jewellery business and traditionally accumulate jewellery professionals, and immense deposits of precious metals and stones, all these place Russia among the most promising players on the global jewellery market. Russia’s forthcoming accession to the WTO provides international companies with opportunities both to enter a new distribution market and to make lucrative investments into joint ventures based on the existing Russian jewellery factories. The first is largely assisted by a growing consumer demand for jewellery, gifts and watches thanks to increasing incomes of citizens and the middle class formation. While joint ventures will allow international companies to considerably reduce organizational costs and fully exclude transport and customs costs, as well as other financial losses in association with the entry to the Russian market and expansion of business in this new territory where doing business is characterized by certain peculiarities. Already for twenty years RESTEC JUNWEX Media Holding has been a leading player on the Russian market of B2B services for the jewellery industry and proposes that the interested parties benefit from the experience and knowledge of our specialists providing most efficient instruments for optimal entry to the Russian jewellery market. Valery Budny, Head of Jewellery Russia Programme, General Director of RESTEC JUNWEX Media Holding


YOUR GATEWAY INTO THE RUSSIAN JEWELLERY MARKET

EVENTS CALENDAR XI International Jewellery Show

VIII Jewellery Wholesale Trade Fair

XXI International Jewellery Forum

Junwex

Junwex Moscow

JUNWEX

New Russian Style 30 May – 3 June, 2012 All-Russian Exhibition Centre, Moscow

15–19 September, 2012

St. Petersburg 6–10 February, 2013

All-Russian Exhibition Centre, Moscow

LENEXPO, St. Petersburg

Junwex WATCH

For space reservation please call +7 812 303 98 60 or e-mail: secur@restec.ru To attend please call +7 812 235 83 83, +7 812 320 93 11 or e-mail: club@restec.ru

Media-Holding RESTEC JUNWEX | www.junwex.com


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6 Events JUNWEX magazine

MOSCOW

2011

The VII Wholesale Trade Fair JUNWEX Moscow 2011 held in September at the best exhibition venue of the capital – VVC (All-Russia Exhibition Centre) – marked an important stage in the development of the Jewellery Russia Programme.


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irstly, in 2011 the trade fair was recognized as one of the largest global jewellery forums entering the circle of the five leading events in the jewellery industry. Nowadays in Russia, it is objectively the most prestigious and effective international event for exhibitors from the commercial point of view. This is true both for jewellery manufacturers and sales companies, and companies operating in the sphere of jeweller technologies, equipment, packaging and software. The dedicated technology section JUNWEX Tech presented a one-hundred percent supply of products and services for the jewellery industry. Its exhibitors included all significant enterprises of the sector: Sisma, Fasti Industriale, Vek, Steinberg Gallery, Klio, KovrovUpack, Lasso, Promtech, Ruta, Sapphire, Fabrika Vek, Juvin, Jmo, etc. Secondly, the exhibition area grew considerably: the exhibitors had an opportunity to present their products at two halls of the VVC – Hall 75 and Hall 69. The event involved as exhibitors all leading Russian jewellery companies including such giants as Adamant, Adamas, Aquamarine, Diamant, Kostroma Jewellery Plant, Krastsvetmet, MZSS, MEUZ, Platina, Russkye Samotsvety, Topaz, Estet, Jewellers of Ural, Yashma, capable of ensuring complete processing of precious resources inside Russia. Alongside leaders of the domestic jewellery business the VVC halls hosted stands of famous brands from Germany, Spain, Italy, Israel, Turkey, India, Hong-Kong, as well as dealers of these companies. Moreover, for the first time the Wholesale Trade Fair JUNWEX Moscow 2011 included the Russian Watch Salon JUNWEX Watch. This new project was initiated by RESTEC JUNWEX Media Holding within the framework of a current business trend: in the conditions of a dropping demand, the jewellery and watch market players are interested in development through extension of their product range. The JUNWEX Watch event gave wholesalers and retailers an opportunity to review new collections of watch manufacturers and suppliers: OPTIM, Romanoff, TBN Time, Time&Technologies, Anlina, Inter-Chas, NIKA, Poljot, Poljot-Elita, Rustime, Slim Group, Style Time, Choronolux, Maxitime, etc. A mutual interest of jewellery and watch companies stimulated their partnership at the trade fair. A successful alliance supported with high commercial results of the exhibitors was probably the most


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8 Events

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JUNWEX magazine

significant outcome of the September event. One can surely note that for the first time after the stagnation of the previously existing watch trade fairs the JUNWEX Watch event showed wide prospects for the domestic watch market. The exhibitors of JUNWEX Moscow 2011 confirmed that the trade fair completely fulfilled its main objectives, facilitated conclusion of wholesale supply contracts for a required range of jewellery and watch products in anticipation of the New Year holiday and assisted in planning company operations for the coming work year taking into account new market realities and social changes. The scale, significance and extensiveness of the display at the JUNWEX Moscow and Russian Watch Salon gave a convincing proof of the real industry being present in the country, which the government has not taken into account as component of GDP. The forum demonstrated a high potential of the industry, its optimistic prospects for further growth. The new watch section positioned as a proper trade fair is particularly important on the threshold of Russia’s entry into the WTO. JUNWEX Watch means a widest range of watch collections offered to the sector’s retailers and large jewellery chains aiming at expansion of their product range thanks to premium-class watches. The Salon acquainted consumers with top brands of foreign watches that had not been presented in Russia, as well as with special shop equipment for the jewellery and watch business. Traditionally the first day of the trade fair was celebrated as the Day of Kostroma Jewellers. Then followed the Day of Ekaterinburg Jewellers, Day of Jewellers of the Republic of Sakha (Yakutia) and Day of Kaliningrad Amber


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RUSSIAN JEWELLERY TRADE Club RUSSIAN JEWELLERY TRADE Club is the biggest business association at the Russian jewellery market uniting more than 6500 wholesalers and retailers from 806 cities of Russian Federation.

Business activity

Craftsmen. Such programme enables the jewellery public circles to unite efforts for supporting the sector’s regional business, attract the attention of consumers and representatives of the state authorities. The business events organised within the trade fair provided “on the job” training within the autumn term of the JUNWEX Training Centre which involved over 170 representatives from sales companies. The trade fair is a good chance for exhibitors to conduct own pressconferences, workshops and meetings in other business formats aimed at increasing customer loyalty. For example, the NIKA company presented new collections of precious watches with Swarovski Zirconia by organizing a pressconference devoted to this event. The Best Adornments of Russia competition once again demonstrated brilliant designer collections, beauty and innovations of jewellery manufacturing. The selected works receiving recognition of the jury were awarded with prestigious and honorary awards.

Buy at the stores of RUSSIAN JEWELLERY TRADE Club — Integrated corporative action for strengthening Club members’ competitive ability. Business Contacts Exchange — Establishment of business links between manufacturers and trade companies to arrange active supplies to the jewellery stores of Russian Jewellery Trade Club. Regional project — Russian Jewellery Trade Club supports regional shows within the framework of Jewellery Russia Exhibitions in Ekaterinburg, Kazan, Kalinigrad, Kostroma, Makhachkala, Perm, Samara, Yaroslavl. The main purpose is to represent the interests of the Club members in regions by developing and maintaining customers loyalty.

Cooperation with RUSSIAN JEWELLERY TRADE Club Buyer’s Programme — delegations of trade visitors; Direct-marketing — a program specifically designed to build the booth traffic; Match-making service — Business Contacts Exchange — assistance in scheduling the business meetings. Tel./fax: (812) 235 83 83 E-mail: club@rjexpert.ru | www.junwex.com


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10 Events JUNWEX magazine Russian Jewellery Trade Club

Russian Watch Salon 15 – 19 September 2012 together with JUNWEX Moscow Jewellery Show

Circulation: 7000 copies Volume: 80 pages Frequency: 6 issues per year Distribution: • among members and partners of Russian Jewellery Trade Club • among the registered trade visitors, attending any event of Exhibition Program «Jewellery Russia» • through channels of partners of Publishing House «Jewellery Russia»

For further information and participation conditions please visit our website — www.junwex-watch.ru For space reservation please call +7 812 303 98 60 or e-mail: secur@restec.ru To attend please call +7 812 235 83 83, +7 812 320 93 11 or e-mail: club@restec.ru For advertisments please call +7 812 303 98 60 or e-mail: secur@restec.ru

Media-Holding RESTEC JUNWEX | www.junwex.com


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Russian Watch Salon

JUNWEX Watch: Harmonious Symbiosis with Jewellery Retail

From 17 to 21 September 2011 the central exhibition venue of Moscow, VVC, Hall 75 hosted the first Russian Watch Salon JUNWEX Watch. The event scale was aided by the initial decision to hold it in conjunction with the prestigious jewellery trade fair JUNWEX Moscow playing a flagship role in the Jewellery Russia Unified Exhibition Programme. This Exhibition Programme organized by RESTEC JUNWEX Media Holding with assistance of the Russian Jewellery Trade Club and RusJewellerExpert Consulting and Rating Agency gave the watch salon its brand name JUNWEX and the awareness of this brand resulted in higher effectiveness of the meeting between watch companies and their customers. Thanks to conducting the JUNWEX Watch event in conjunction with the largest Russian jewellery trade fair, the Russian Watch Salon exhibitors benefited from its nearly fortythousand visitor audience including 7825 trade visitors.


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12 Events JUNWEX magazine

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n the eve of the exhibition, the Secretariat of the Russian Jewellery Trade Club conducted a research in regard to the level of interest in watch sales among nearly 7000 members of this largest public association of the jewellery industry. The poll showed that 24–25% of jewellery retailers are interested in extension of their product range by means of watches. At the exhibition itself, the level of commercial attention of jewellery retailers to the watch segment of the market was considerably higher. Already the results of the questionnaire completed during the registration of trade visitors showed that about 32% of retailers planned to review a new product range of watches. This was certainly a consequence of preliminary measures taken by the Organizing Committee using all media channels at its disposal. For example, these included in-advance publications in the leading magazine for the industry professionals Jewellery Russia and the Best Adornments in Russia magazine destined for a wide audience which specially emphasized watches and accessories to be presented at the JUNWEX Watch event. It is worth noting that already at the stage of the exhibition preparation, PR resources of these publications were used not only by the repeat exhibitors of the JEWELLERY RUSSIA Unified Exhibition Programme, such as Maktime, NIKA, Interchas, Anlina, Chronolux, Continent, David Biron, Courante, but also by the new exhibitors of the watch salon such as brands TBN Time, Time & Technologies, Wencia, Time trade, Chic&Sauvage, Skagen, Slim Group, Romanoff, Guess, Shele, Poljot-Elita, Yuta, Poljot-Chronos, Mosalt, Poljot Trading House, etc. This considerably increased the attention of visitors to new watch brands presented within the overall exhibition area. Another step of the RESTEC JUNWEX Media Holding contributing to expansion of its influence on the watch market was the international launch of a new trade magazine JUNWEX Watch having the same name as the Russian Watch Salon. Insertion of a copy of the magazine in the presentation pack, given to each trade visitor attending the VVC during the show and direct mailing to a database of jewellery and watch sales companies shortly after the exhibition, from the very beginning made this publication the most distributed watch magazine on the market of these two industries in Russia. But, while preparing the watch salon, the organizers’ activities were not limited to the above. On the initiative of the Organizing Committee the


Events

professional association Russian Jewellery Trade Club set up a watch section assigned the function to liaise daily with watch retailers and generate a database of watch retailers in the post-Soviet territory. The Organizing Committee joined the European Watchmaker and Retailer Organization (EWRO) becoming the first Russian representative at its session in Germany and inviting all its members to participate in the JUNWEX Watch 2012. There was launched a site for the watch market participants www. junwex-watch.ru where one can daily place news free of charge. The FASHION SEASONS catalogue famous with consumers was supplied with a subtitle “WATCHES. ACCESSORIES” to increase its influence. The catalogue is distributed at all events of the Unified Exhibition Programme organized by RESTEC JUNWEX Media Holding and its highly professional partners, and is also mailed to all members of the Russian Jewellery Trade Club. Now it will be also sent to all watch retailers in Russia. How effective was the first Russian Watch Salon JUNWEX Watch for its exhibitors? Only the exhibitors themselves can answer this question. But it is already clear that the first experience was a positive one. The Organizing Committee of the exhibition, which invites heads of all enterprises newly joining the Unified Exhibition Programme, is considering the prospects for development. And they are determined by the mission undertaken by the JUNWEX Watch Organizing Committee: to establish a unified exhibition platform in Russia and post-Soviet territory for an extensive offer of a comprehensive range of jewellery and watch products which historically and globally are positioned as unified segment of consumer goods. Watches, jewellery and accessories are inseparably connected between themselves by a single target consumer audience. According to marketing experts, watches have long ceased to be simply an instrument for measuring time and jewellery no longer plays an exclusively decorative role. The former and the latter have firmly taken the place in the category “Accessories”. At the same time, the complementary character of notions “watches” and “jewellery” was always a stimulating motive for uniting these product groups at the same exhibition venue at the most famous international shows in Basel, Hong-Kong, Las Vegas and Vicenza. And the Russian market cannot be exclusion. It used to be a unified jewellery and watch market before the overall economic demise in the 1990s. However, during that period, precious-metal watches remained in the focus of attention of jewellery retailers. The current global economic cataclysm and the growth in the prices for gold have accelerated the return to the customary retail format: expansion of the product range by a huge number of jewellery retailers thanks to adding “non-precious” watches. The recently held JUNWEX Watch event allowed potential partners from adjacent sectors to find each other. The JUNWEX Watch show will be held as special project annually in September-October. But already nowadays manufacturers and distributors of watch products understand the necessity of wholesale supply of watches in strict conformity with seasonal demand which also coincides with jewellery retail. Already nowadays watch companies start to actively participate in the Unified Exhibition Programme organized by the RESTEC JUNWEX Media Holding. The events of the RESTEC JUNWEX brand are held three times a year and offer its exhibitors large-scale venues for meeting wholesalers and retailers, now also including representatives of watch sales companies.

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14 Events JUNWEX magazine

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Pavel Grankin, Slava Trading House

e have long been aware of the necessity to hold a watch salon within the largest Russian jewellery trade fair JUNWEX Moscow. Now that RESTEC JUNWEX Media Holding has managed to implement this idea, we have not only taken part in the forum, but also tried to provide all possible assistance in promoting JUNWEX Watch among our colleagues from the watch industry. We should note the organizers’ professional work of supreme degree while preparing and conducting the exhibition. Everything promised by the management of the media holding has been fully implemented. There were many pleasant surprises for us: for example, participation of a considerable number of watch companies representing global brands, launch of a special publishing product including the JUNWEX Watch magazine and trade web portal, prompt and accurate resolution of all issues arising during the exhibition. The business atmosphere of the jewellery forum extended to watch companies and very effectively influenced the rhythm of work of the JUNWEX Watch exhibitors. Recently Russian watch companies have started to get accustomed to the thought that they operate on a vanishing segment of the market. However, now they really see promising prospects for establishing a harmonious symbiosis with jewellery retailers which are several times as many as watch retailers. According to our statistics the ratio between potential clients among watch retailers and jewellery retailers is about forty to sixty. For us and for all watch companies joining the JUNWEX Watch event this is really good news! The assessment of the exhibition results has not been completed, but already we understand well that there open new prospects for fruitful cooperation between jewellery and watch companies, this mostly concerns retail.

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irst of all, we planned to study some parameters of the demand and have obtained the results sought. For us it is one of the main results of participation in the exhibition. In particular, I can note consumer interest in domestic brands as one of the main market tendencies. It may have been conditioned by the fact that the JUNWEX Watch show was held together with the largest jewellery exhibition in Russia demonstrating best offers mainly of Russian jewellery companies. In any case, an increased interest in our Nesterov brand watches was very notable.

Polina Titkova, OPTIM


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he impressions from the Russian Watch Salon are very positive. The exhibition organization and servicing were at the top level, even better than in Basel in certain aspects. As to marketing trends, in my opinion, the demand for expensive watches in Russia is declining. It is obvious that those who have such opportunity purchase them abroad, while watches costing from one thousand to six thousand roubles are currently in demand in Russia.

Vladimir Levshin, Poljot-Elita

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uite unexpectedly for us our retail sales at the exhibition covered our costs of participation in the event. Certainly we had numerous negotiations with potential wholesalers and retailers, but it is too early to speak about their results. I think that the organizers should more actively integrate watch companies into the jewellery market so that each jewellery retailer wishing to include watches in its product range could meet us at the exhibition venue to which they are accustomed.

Andrey Gorodkov, Time Trade

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ll targets that we set before us at this exhibition have been reached. We planned not only to actively promote our brands among end consumers, but also, which is rather more important, to search partners among jewellery retailers which would be interested in cooperating with us. The significance of the JUNWEX Watch event is in the fact that the exhibition unites representatives of the two adjacent sectors: watch market and jewellery market allowing them to mutually benefit from such partnership. We are currently negotiating with ten jewellery companies which met us at the Russian Watch Salon in the framework of the JUNWEX Moscow trade fair.

Alexander Fersanov, SKY TIME Group


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16 Events JUNWEX magazine

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e are newcomers to the market and participation in the exhibition was a rather successful start for us. We have become known not only to watch business colleagues, but also to a large number of potential clients from jewellery retail, thus opening immense prospects to us. We are convinced that the participation in the JUNWEX Watch event will become a good tradition for us and will help in strengthening our positions on the market.

Armen Kazaryan, Wencia

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ESTEC JUNWEX Media Holding has demonstrated the level of organization meeting international standards. We will certainly continue our cooperation with the JUNWEX Watch event organizers: we have already submitted applications to exhibit in the November show “Best Adornments of Russia” in Moscow and in the JUNWEX St. Petersburg show in February 2012. We hope that the organizers will follow the policy toward the maximum unification of the two markets. For example, a range of PR and marketing presentations could be conducted within these exhibitions in order to position watches as one of the product segments of jewellery retail.

Alexander Schekotikhin, Chic & Sauvage brand watch retail chain

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he Watch Salon has been a success! We have understood this both from retail sales at the exhibition and from numerous new business contacts. We give the highest estimate to the organizers’ work. And this assessment is objective as we have other experience with which we can compare it.

Natalia Kuvshinova, Romanoff


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Opinions of Jewellery Companies

about JUNWEX Watch W

e liked very much the idea of RESTEC JUNWEX Media Holding to hold a watch salon within the jewellery trade fair. The interests of jewellery and watch companies are closely interconnected; therefore our cooperation is quite logical. We all feel a decline in sales, and this alliance should help the two markets to overcome the stagnation. The plan to unite the markets has long been in the minds of both jewellery companies and watch companies, however, until now nobody has been able to implement well such project and assist us in meeting within the same exhibition venue. Argenta has got its own positive experience of extending its product range thanks to other product groups: for example, at our showrooms jewellery was added to complement the showcases with silverware. Therefore, the next logical step would be exactly to add watch models for expansion of the product assortment. Our customers are busy persons taking care of their image. They do not have that much time to run various shops in search of decent gifts. It is convenient for them to review such assortment at one place. At the exhibition, we conducted negotiations on future partnership with two watch companies specializing in products of different price ranges. We got very interested in such brands as Versace and Chic & Sauvage, with which we are likely to start cooperation in the next year.

Zhanna Perevalova, Intersilverline Silver Factory, Argenta Trademark

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e started to expand our business by adding watch collections to our product range long ago. In particular, NIKA silver watches are in good demand. At the First Russian Watch Salon, this company presented a new and, in my opinion, very good collection with Swarovski cubic zirconia. The JUNWEX Watch show is a remarkable project providing opportunities for business development both to jewellery companies and watch companies. Because of our busy schedule we cannot always go to Moscow specially for conducting negotiations on potential cooperation, while the exhibition provides an ideal business environment for concluding such deals. Therefore, holding the watch salon and the largest jewellery trade fair together undoubtedly ensures great prospects. Despite the fact that the JUNWEX Watch exhibition was held for the first time, it was excellently organized ensuring convenient navigation, intensive promotional support and a wide range of participants. Watches of all price categories were presented at the exhibition, therefore each visitor could select a watch model meeting their expectations for design and price. For example, I liked very much the watches presented at the stand of the OPTIM company.

Yulia Safronova, PERASKEVA Trademark


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18 Brands JUNWEX magazine

Luxury

made in Russia

If a jewellery article is a representation of high art, its price may exceed the cost of used materials by tens or even hundreds of times. The value of such object only grows with time and it becomes a legendary antique rarity accessible for the select few. It is such works of art that find their owners at the main world auctions.

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he price of a jewellery article, alongside its artistic value and money equivalent of precious materials used for making it, is also considerably influenced by the name of author, brand awareness and trademark prestige, the promotion and advertising of which on the global market require many-year efforts and large investments not always accessible to Russian jewellers. Already for seventeen years, talented domestic designers and masters have been helped in this by leading professional competitions within the Unified Exhibition Programme “Jewellery Russia” It is at this competition that the members of the jury, consisting of leading art experts from famous museums of the world, renowned designers and researchers of jeweller art, conduct strict selection and issue certificates for exclusive jewellery pieces confirming their unquestionable artistic value. The best experts from the Moscow Kremlin Museums, Hermitage, Russian Museum and Russian Museum

of Ethnography for many years constitute the Supreme Board of Experts of the RusJewellerExpert Consulting Agency and perform huge amount of work to discover outstanding works of art and to compile the XXI Century Russian Jeweller Art Chronicle. This is a totally unique project for the Russian market. The Honourable Book is used for recording the names of winners of competitions and masterpieces made by domestic jewellers and jewellery companies that are worthy of the best samples of the world art. These exclusive works can be viewed at the leading jewellery industry web portal: www.junwex.com. In anticipation of Russia’s entry into the WTO, it is important to answer the question of whether Russia is ready to make a special offer in the area of luxury brands and take its own share of consumer demand on the international jewellery market. The competitions within the “Jewellery Russia” Programme convincingly give a positive answer to this question!

The competitions are held three times per year at the largest jewellery trade fairs organized by RESTEC JUNWEX Media Holding: • All-Russia Jewellery Contest for the “St. Petersburg Recognition” Award (within JUNWEX ST. PETERSBURG international trade show) • “Days of Jewellery Market Leaders” (within International Jewellery and Watch Exhibition JUNWEX New Russian Style) • Best Adornments of Russia (within JUNWEX Moscow Jewellery Trade Fair)


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Jury

Supreme Board of Experts President of the Jury: Galina Kovaleva – President of the Jury for the Contests of the Jewellery Russia Unified Programme, President of the FORME Jeweller Support Foundation.

Elena Ivanova – Fine Art Expert, Head of Applied and Decorative Arts Department, Russian Museum.

Galina Smorodinova – Fine Art Expert, Lead Research Associate of Precious Metals Department, Russian History Museum Anna Ratnikova – Senior Research Associate, Russian Museum of Ethnography

Tatiana Muntyan – Fine Art Expert, Senior Research Associate, Moscow Kremlin Museums

Larissa Peshekhonova – Fine Art Expert, Senior Research Associate, Moscow Kremlin Museums

Olga Kostyuk – Ph.D. in Art History, Senior Research Associate, the State Hermitage Museum

Natalia Korovina – Fine Art Expert, Art Critic


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20 Brands JUNWEX magazine

New horizons T

he Samorodok Jewellery Company from St. Petersburg is a largest manufacturer of sterling silver products. For over 15 years, we have manufactured and wholesaled silver products on the Russian jewellery market. In 2008, the company made its debut on the international market. The idea of entering the international market occurred to us during the worst period of the financial and economic crisis, but despite this we understood it would be a promising direction for the company’s development. Moreover, by that time there was already a relatively high demand for our products, and a wide circle of repeat customers was established in the CIS countries and Central Europe. When the idea to export our own products occurred to us, we understood that the international jewellery market was a market of tough competition with a great number of jewellery manufacturers. Therefore, to strengthen our competitor positions on the international market we paid and continue to pay special attention to the quality of offered products, flexible price policy, and also conduct a range of events to increase awareness of the brand. For three years of operation on the international market, we have taken part in such largest international jewellery shows as Inhorgenta Europe 2010, Gold Silver Time 2010, Jeweller Expo Ukraine 2010, ARU-Almaty 2011. In 2010 we registered the Samorodok trademark in the European Union, which facilitated even more successful promotion of our products in the CIS countries, Baltic counties and Central and Eastern Europe. Nowadays our repeat customers include companies from Germany, Belgium, Sweden and Kazakhstan. Summarizing the results of our work on the international market for two last years, I can convincingly note that our product range of silver jewellery is in high demand despite certain economic difficulties. We have good knowledge and experience of work in organizing exportation of our own products, therefore we are ready to expand to new markets and proudly demonstrate products made in Russia. Olga Korotkevich Head of Sales Department Samorodok LLC


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Brands 21


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22 Jewellery Market & Statistics JUNWEX magazine

Exhibition: Market Monitoring Exhibitors have different opinions about the current situation on the Russian jewellery market

E. I. Grechishnikova, Sales Director, Bronnitsky Yuvelir Company

T

he last year’s trend is a steadily growing consumer interest in exclusive handmade chainmail weaves patented by the Bronnitsy Jewellery Plant. As always, sales are going well for the following product articles and weaves: Double Diamond, Singapore, Love, Nonna, traditional curb chains and anchor chains. Nowadays our range of handmade chains is one of the widest on the domestic market, and we annually add new chain weaves. For example, in 2011 the Muza chain weave is especially popular. It has even become a sort of our company’s brand. As to the precious metal colours, in my opinion, there is still a trend toward red gold. The main percentage of yellow gold products is traditionally distributed in the southern regions. While in the central regions of Russia the proportion of red

gold and yellow gold is eighty to twenty, in the southern regions it is just the reverse. In different regions white gold certainly sells differently, the demand is determined by the design of jewellery and weaves. There is a good retail demand for products of rhodium plated silver with automated and especially handmade weaves which look like white gold products. The workshop manufacturing handmade chains is one of the largest at the enterprise constantly increasing product output in order to satisfy the demand of our customers for this product category. There is a steadily growing demand for religious jewellery related to the Orthodox Church, in particular, for silver products. Therefore, we actively develop the range of religious products: nowadays such products account for nearly thirty percent of the company’s sales. Also, we are the only company manufacturing a wide range of religious articles with images of patrons of names and different professions. Therefore, these articles are in high demand even among secular organizations. Moreover, we provide our customers with comprehensive information support, as shops often find it difficult to design special showcases for such products: consumers have an interest in these products while salespersons cannot give a professional consultation about them. We try to compensate for the growing cost of precious metals by promptly introducing new


Jewellery Market & Statistics

collections. We monitor the life cycle of each model: for example, classical products enjoy demand on the market for an average of threefive years, chain products – for a somewhat longer period, while designer articles – for year-year and a half. In the consumer retail shops of apparel, sporting goods and gifts, they weekly relocate the assortment so that consumers always felt an interest while entering a shop. For a jewellery shop with several showcases the possibilities for relocation are limited. At the same time the clients of jewellery shops are usually repeat customers, therefore, renewal of the product range and introduction of new jewellery models are especially important. The Bronnitsy Jewellery Plant monthly manufactures from eighty to one hundred and fifty novelties. The model creation cycle from the first sketch to a finished product lasts approximately two months. Despite a decrease in sales during the period of the crisis, in 2011 we have practically achieved the previous pre-crisis level of manufacturing output, we still need five-seven percent of growth to catch up, and I think we will reach the necessary result by the end of the year. Here I speak about the

product output by weight; in regard to the number of product articles the figure will be even higher, as we had to start manufacturing lightweight models due to growing prices for precious metals. During the crisis period, our sales in Moscow, St. Petersburg and neighbouring regions declined insignificantly. There is still an active consumer demand in the million cities in the south of Russia. The industry’s sales companies are currently undergoing quality changes. The companies pay increased attention to their brand and positioning on the market. Quality of products is a most important factor. We actively work in this direction. The Bronnitsy Jewellery Plant is the only enterprise from the jewellery industry that has undergone a voluntary certification with the Russian Centre for Testing and Certification. We have been issued a state standard certificate confirming the high level of manufacturing maintained by the plant. An overall inspection of all activities at the enterprise took four months. This is an important stage both for development of manufacturing and for the constant policy of giving product quality warranties to retailers and consumers.

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We try to compensate for the growing cost of precious metals by promptly introducing new collections.

This winter we also expect the sales to actively grow thanks to new and unique models regularly supplied to our stock.

A

nother annual September jewellery trade fair has passed and preliminary results can be already summarized. For several months our company prepared for this event: compiled the collection to be presented, worked on the stand design and prepared interesting proposals. And now we can say with certainty that our efforts were not in vain: the event was a success. LucasZoloto LLC practically doubled its sales compared to the last year’s trade fair while sales of products from the diamond group grew from seventy-one to eighty-five percent. This cannot but please us as it evidences that our partners regard Lucas-Zoloto

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A. Bessler, Market Researcher, Lucas-Zoloto


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24 Jewellery Market & Statistics JUNWEX magazine

LLC as reliable supplier and manufacturer of diamond products of international level. During the fair, the company celebrated its eighteenth anniversary. Over three hundred of our best customers were invited to this party. We tried a non-traditional approach to conducting this party and organized it in the newly constructed shopping centre AFI Mall located at the Moscow City business centre.

This winter we also expect the sales to actively grow thanks to new and unique models regularly supplied to our stock. We are convinced that our customers will be pleased cooperating with us, as purchasing jewellery from Lucas-Zoloto LLC they guarantee good sales for themselves.

Nowadays, all consumers want “beautiful and cheap” products and we meet the consumer demand.

K. S. Salomein, Atoll Jewellery Plant

T

he JUNWEX Moscow 2011 trade fair was a success for us. Compared to the September exhibitions of the previous years the results have grown not only in regard to sales, but also in relation to concluded new contracts. We certainly conducted large preliminary work while preparing to the exhibition. It is worth noting our marketing department: it did a great work studying consumer demand and canvassing new partners. It frequently happens that negotiations over the phone do not yield necessary results; therefore our staff had to travel to regions with sample products where they met potential clients and acquainted them with collections and quality of our products. They attentively studied consumer demand taking into

consideration the specific features of the region. Thanks to the work conducted we considerably updated and expanded our product range complementing it with new models, optimized the weight of products, and withdrew outdated collections from manufacturing. Among the new models particular attention was drawn to our lightweight jewellery with diamond edge. Nowadays, all consumers want “beautiful and cheap” products and we meet the consumer demand. In my opinion, the market situation in the regions is improving. Nevertheless, not everywhere this process is as quick: somewhere sales have stabilized, somewhere there are still certain problems. However, the issue of payment arrears that has troubled the whole industry is not that acute nowadays. Everybody is complaining of an unstable economic situation on the market: the price for gold is growing, consumer capacity is decreasing. The analysts differ in their forecast. We can influence neither the global situation, nor the exchange cost of precious metals, so we have to rely only on ourselves and keep to the motto “Success is achieved by hard work”.


Jewellery Market & Statistics

B.V. Kolesnikov, Jeweller Artist

no sense in making them in our country. However, I am convinced in one thing: I will continue working. We still have so many interesting ideas that await their implementation.

T

A. O. Nikolaev, General Director, Elana Co.

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Earlier we had offered only handmade jewellery, but from this year we started to develop manufacturing of products for all consumer categories.

O

ur works regularly participated in the events of the Jewellery Russia Programme, but we participate as exhibitors in the JUNWEX Moscow trade fair for the first time. This has been planned for a long time: consumers know quite well our products and there is a need for a wider promotion of our own brand. Earlier we had offered only handmade jewellery, but from this year we started to develop manufacturing of products for all consumer categories. The prices are truly democratic: I think that nine hundred roubles for a work of author design is a very attractive price. Our models are original, unusual and elicit a great interest among the clients, although we do not follow the steps of demand, but try to form it. Therefore, it is twice as pleasant that our smallbatch products enjoy demand, as well as individual works. However, wholesalers do not regard us as manufacturer of mass products and we have to promote our brand in this direction, adjust the marketing policy, look for a new format of positioning on the market. As to forecasts, there is

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he exhibitors have different opinions about sales at the trade fair; I would even say totally contradictory opinions. There are those who are satisfied, and those who are dissatisfied despite the fact that this year the VVC pavilions gathered more attendees than in any previous year. And there appeared a great number of new wholesalers and retailers. All necessary conditions have been provided, only one has to work well. I would like to emphasize that there is a sufficient number of visitors, only they do not come to everybody, they visit certain stands, but do not attend the other. Those who prepared business activities well have obtained good commercial results. The market is saturated and the companies offer practically the same products. Sometimes their products can be distinguished only after reading the company’s name on the fascia board. And nowadays consumers are more demanding; they want everything new and unusual. If earlier ten suppliers were sufficient for a retailer, now it is not enough, and retailers want to find new products at the exhibition. Our repeat customers come to the

The market is saturated and the companies offer practically the same products. Sometimes their products can be distinguished only after reading the company’s name on the fascia board.


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26 Jewellery Market & Statistics JUNWEX magazine

stand and start by selecting novelties. In search of products that sell well, wholesalers and retailers have to work not only with their brain, but also with their feet. I will give you an example. For a long time I have cooperated with a certain client who used to order a kilogram of gold with cubic zirconia and did not want to get into details of the purchase: just sell me a kilogram and that’s all! But now he comes to the trade fair with five merchandisers who work not one, but all days of the exhibition!

We have many ideas in the sphere of exclusive articles which await their implementation, especially articles for men.

V. A. Kozlova, Commercial Director, Stezya Co.

L

ast year we started to work in the niche of VIP gifts and develop the area of exclusive articles. The time has shown that it was the right decision: this category of jewellery products is currently very demanded by consumers. However, we understand such products should be promoted by optimizing price parameters, as the question of the cost is the principal one on the current market. Consumers’ incomes have not increased, consequently retailers’ sales have decreased and wholesalers and retailers purchase products for lesser amounts. Therefore, we should be guided by the prices acceptable in the current situation. I will give you an example of our chess set which won

We regularly receive proposals to purchase second-hand equipment; this evidences that a part of enterprises get closed and sell their assets. The market is being redistributed. The times and situation change, but we have a business of our choice and we need to further it. This business has become more difficult to manage: we have to work more, think more and take more risks. For example, I do not remember when I was on vacations. Nowadays, those survive who develop a better marketing policy, fit in their market niche and find their customers.

the competition held within the New Russian Style 2011 show. This set is of great interest to retailers, but frequently they face the issue of limited funds. Retailers tell us ‘One and a half million roubles is too expensive, but we would willingly take this chess set for five hundred thousand roubles; we have clients who are sure to buy it’. Therefore, we will make our products less expensive by using other materials: instead of a marble board we will use ebony (looking as showy, but at a lower cost). We plan to make a table version of such chess set. Moreover, we have an idea to sell these chess pieces separately so that persons who buy them can collect the entire set. We have many ideas in the sphere of exclusive articles which await their implementation, especially articles for men. Usually products destined for women dominate jewellery showcases, and men are paid somewhat less attention in this respect. I can boast that you would not see “bored husbands” at our stand: they study with interest our unique knives, interior compositions and religious articles. I am satisfied with the commercial results of participation in the trade fair. This success was largely conditioned by preparatory work done in advance. Now we think of not only inviting our clients to the next trade fair, but also of designing a beautiful and attractive stand decent of those works of art to be presented at it.


Jewellery Market & Statistics

A. L. Bogdanov, co-owner of NIKA Group

Undoubtedly, holding the JUNWEX Watch salon will attract greater attention of consumers, retailers and wholesalers.

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he Russian watch market has already achieved a certain level of development sufficient for the industry players to decently present their products as separate exhibition. Undoubtedly, holding the JUNWEX Watch salon in conjunction with the largest jewellery trade JUNWEX Moscow 2011 will attract greater attention of consumers, retailers and wholesalers to the watch industry, and will give the exhibitors and visitors an opportunity to review novelties from leading Russian and international manufacturers.

V. V. Mukhortov, Director, Altmaster Co.

T

he format of the jewellery wholesale trade fair is very convenient. The trade fair provides a vector direction for development of the industry for the whole year, shows main targets that should be achieved both by large enterprises and small companies. It helps to get an in-depth understanding of the market and extent of competition.

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In whole, I am satisfied with the commercial results obtained at this trade fair. All exclusive products have been sold. Despite the market changes our relatively young project is successfully developing. But a special interest in exclusive silver products is observed to a greater extent at the JUNWEX St. Petersburg show. Among the numerous merits of the trade fair I should note its large scale and wide product range presented, as well as an objective snapshot of the market situation. The JUNWEX Moscow trade fair is deservedly considered the main exhibition of the jewellery industry in Russia: wholesalers and retailers have an opportunity to conclude contracts for the whole next year. Another huge plus is an extensive advertising campaign of the event in the streets of Moscow, on transport and federal mass media. The exhibitors and guests of the fair also rate as important such factors as presence of convenient parking, security and cleanliness at the venue. As one of the winners in the competition held within the trade fair I should note that this victory really helps in further commercial work. The competition is quite prestigious and consumers pay attention to the opinion of the reputable jury. Moreover, the event organizers steadily follow the initially selected strategy oriented toward the interests of the domestic jewellery manufacturing.

Huge plus is an extensive advertising campaign of the event in the streets of Moscow, on transport and federal mass media.

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28 Jewellery Market & Statistics JUNWEX magazine

Statistics

on Demand

Exhibition Space — 37,638 sq.m. Exhibitors — 709 Total attendance — 38,306 Trade visitors — 17,825

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ccording to the statistics, 20% of the respondents attended the JUNWEX Moscow trade fair for the first time, while for 9% of the respondents it was their second visit to the event. The main consumer audience (71%) consisted of repeat customers, the majority of which (41.6%) started to attend the fairs in the framework of the Jewellery Russia Programme within the last three years, that is at the venue of the VVC (All-Russia Exhibition Centre), thus confirming the effectiveness of this exhibition venue for exhibitors to obtain the maximum business results. The overwhelming majority of visitors (77%) choose to purchase jewellery and watches at fairs and exhibitions, as they think they can select from a wider range of products there than at shops. Many visitors (45%) noted that purchasing directly from the manufacturer is a guarantee of product quality. Nearly the same percentage of the respondents (42%) named acceptable manufacturer prices as the main reason for purchasing products at the fair, while 30% emphasized good servicing. Moreover, 70% of the visitors complained of not being able to choose any product at a jewellery shop. This fact confirms that a wider range of products should be offered.

According to the results from accreditation of sales companies, the database of addresses maintained by the Russian Jewellery Trade Club for the first time has surpassed the seven-thousand level and increased to 7388 addresses. This once again emphasizes a meticulous approach of sales companies to selection of the product range that is currently an indispensable condition for successful operation of shops. Instead of two days, trade visitors use now all days of the show in order to study collections of as many exhibitors as possible. Among the factors determining successful sales, the majority of trade visitors representing jewellery sales companies give the first place to product range, the second to thorough marketing policy, and the third to highly professional staff. The similar list for manufacturing enterprises includes the following factors: product quality, thorough marketing, and continuous renewal of product range. It is pleasant to note that nowadays 75.3% of jewellery suppliers provide their products with accompanying advertising materials targeting the end consumer.

Did you happen not to find a jewellery article of your preference at the jewellery shop?

Why do buyers choose to attend a trade show? 70%

1,1%

60%

Unspecified

50%

No

40%

20% 10%

Other

Good service

0%

Direct purchase from manufacturer guarantees good quality

Yes

30%

Possibility of the direct purchases from manufacturers at a reasonable price

69,7%

Wider product range than at the shop

29,2%

80%


0%

Other

Stable partners

Beneficial loans

Stable market

Renewal of the product range

Quality products

Large-scale PR & Advertising campaign

Other

Manufacturer price reduction

Beneficial supply conditions

Good shop location

High consumer incomes

Beneficial loans

Wide product range

Highly professional staff

Large-scale PR & Advertising campaign

Good marketing

0%

Good marketing

Jewellery Market & Statistics 29

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What are the most effective methods to increase the profits? Answers of the wholesalers & retailers 70%

20%

10%

All you need is ...

60%

50%

40%

30%

20%

10%

Answers of the manufacturers

80%

70%

60%

50%

40%

30%

junwex.com


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30 Watch Market JUNWEX magazine

Best watchmaker of the Petrodvorets Watch Factory (1950)

Watch Industry in Russia: Prospects The watch industry in Russia is unique in its nature. It was created within a short term and immediately made its presence known to the whole world. However, it faced a new reality after the perestroika. Capitalist relations practically completely changed the structure of watch making. Therefore, looking at the main trends in this business at present, we will be able to understand what awaits the Russian watch industry in the long term.

T

imekeeping devices started to be manufactured in the USSR in the early 1930s after the acquisition of the outdated bankrupt factories of DueberHampden Watch Company and Ansonia that became the foundation for the young Soviet watch factories. Soon it became clear to the government of the country that a long-term operation based on foreign technologies would be impossible and that own technologies were required. So said, so done. The Soviet watches exceeded the expectations of many. It was a unique period of history reflecting everything that happened in the country. The people dedicated to serving their state developed a giant watch industry simply from nothing. There were neither specialists, nor technologies, or special machine tools or enterprises that could manufacture jewels so much required for making watches ... There was nothing! Several decades passed and the USSR became one of the world leaders in production and exportation of watches. The Soviet watch industry took the second place in output of timekeeping devices after

the Swiss watch industry. The quality of these devices met all international standards and the reliability of Soviet watch movements was not questioned. This can be confirmed by many examples. For example, the Petrodvorets Watch Factory exported watches to over thirty countries, to all continents of the planet including to the developed capitalist countries: the USA, UK, Japan and even to Switzerland! The English market, traditionally being sceptical of all unknown products, by the mid 1970s consumed hundreds of thousands of Raketa watches per year. However, in the perestroika years the situation greatly changed in the country. Being deprived of the state support, watch factories were forced to largely reduce or completely stop manufacturing. Only few survived while the majority remained only as names. It is very disappointing to see the consequences of what has happened in the Russian watch industry for the last two decades. The new economic conditions brought to ruin the majority of the USSR watch giants that used to be nearly twenty in number.


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Watch Market 31

These enterprises were practically small cities with population of several thousand people. The watch factories had their own sports centres, hospitals for employees, kindergartens and summer camps for children. Each enterprise had special educational institutions that passed to the young the experience accumulated during several decades. Unfortunately, now there are few real watchmakers in Russia, the majority prefer the professions of economist, lawyer or manager. When I took charge of the factory in 2009, only one specialist made balance springs. We opened a watchmaker school in 2010 and now we have five such specialists. At present there is not a single specialized educational institution training watchmakers, other than ours. The workload is borne by workers of the older generation, people of the old school. But for them there would be nothing. We are trying to improve the situation and, therefore, are bringing up a new generation of watchmakers. The fate of many watch factories of the former USSR is deplorable. We regret very much that the Poljot factory from Moscow no longer makes watch movements, and it was the first enterprise of the Soviet watch industry. All the more so, as our factory is a younger brother of the First Moscow Watch Factory. In the middle of the 1950s, the Poljot specialists helped to make us our first watch under the Pobeda name. I sincerely hope that Sergey Pugachev who is the owner of the Poljot brand will restore the enterprise and will retrieve its former glory. However, the things are not as bad. In whole, there are actually many Russian watch brands. But let us first determine what can be included in the category of Russian watches. If this means only the presence of a Russian name, then the market is indeed saturated with “domestic� products. But if we mean watches that have a movement made in Russia, there remain quite few. I am proud that the Raketa factory makes its own movements from A to Z, including the balance wheel and spring. We have received thousands of positive opinions on the Russian watches from watch making connoisseurs from different places of the world. Having retained the Soviet reliability of the watch movement and having modernized it, we have given a tinge of modernity to its external appearance. And this is the only right decision in our opinion.

Line assembly at the Petrodvorets Watch Factory (present time)

Legendary Raketa watches


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32 Watch Market JUNWEX magazine

Line assembly at the Petrodvorets Watch Factory in the 1950s

Jacques von Polier (born September 5, 1974) is a French designer based in Russia, a descendant of the Russian first wave emigres, director of the creative and design department of the Petrodvorets Watch Factory “Raketa”.

Assembly workshop (2011)

Certainly it is really expensive to manufacture watches in Russia. One has to invest huge amounts in manufacturing that suffered during the period of the reforms. It is much simpler and less expensive to purchase finished movements in Switzerland or even in Asia. Therefore, the majority of manufacturers have followed the path of least resistance. However, the question of having own watch movements is the question of the brand prestige and confidence in the quality of own products. Nowadays any manufacturing in Russia is also connected with great administrative problems. To manufacture anything one has to collect tens of papers, visit tens of state authorities. It is no secret that bureaucratic barriers in Russia interfere with any business. The same factor hinders exportation from Russia. I will give you an example of our relations with the customs. The first batch of the Raketa watches that was sent to France stayed at the Russian border for four months! The same watches arrived to the French customs and the whole custom clearance procedure took only ten minutes … And this case, as known, is not exclusion. In any European country people come to the notary only several times in one’s life when someone of the family dies. In Russia for each operation you need to have a certain paper, or a strong lobby. It is worth noting the changes in the minds of Russians. After the demise of the Soviet Union and in the 1990s people in Russia were fond of the Western values. Goods from Europe and North America flooded the country and everybody wanted to buy more of them. Then, this hysteria about the West passed and a new situation occurred. People started to value their history, culture and heritage. This process also concerned the watch business.

Already now many prefer traditional Russian watch brands. And this is only a beginning. I am convinced that soon historical Russian brands will be in real demand as the times when we were ready to exchange the Motherland for a pair of jeans have already passed. Therefore, in our opinion, the only right vector for development of the Russian watch business is to set up own manufacturing. There should be entrepreneurs who would restore old industrial enterprises or set up new enterprises. This process is currently hindered by the absence of serious investments in the industry; however, the situation is gradually changing. At the same time many brands invest huge amounts not in manufacturing but in advertising, PR and marketing. Certainly this cannot be ignored, but for such companies it has become a priority. They make their stake on the external appearance, case, and not the quality. But the Russian market is already saturated with cheap watches made in Asia. Nowadays watches primarily emphasize a person’s status. Therefore, it is natural that people are not indifferent to what movement is inside their watch case, no matter how exquisite it may be. We can speak a lot about what will happen to the Russian watch industry in several years. In any case there should emerge people who will assist in its development. And I am convinced that those who invest in own manufacturing are on the right way. I hope that many representatives of the watch business in Russia will follow their example.

Jacques von Polier, Managing and Creative Director, Petrodvorets Watch Factory


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Watch Market 33

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34 Brands JUNWEX JUNWEXmagazine magazine

As football fan, Antonio Calce was pleased to have his photo taken together with Zenit players: Portugal national team players Miguel Danny and Bruno Alves, Russian national team goalkeeper Vyacheslav Malafeev and Italy national team defender Domenico Criscito.

Wear Corum

and support Zenit! In the late September St. Petersburg saw a presentation of the limited edition of Admiral’s Cup FC Zenit chronographs developed by the Corum company from Switzerland.


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Brands 35

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Brands 35

Our correspondent interviewed Antonio Calce, Director General, Corum —Whether Corum had an experience of cooperation with sports clubs or sponsoring of any large international competitions before? —This partnership with FC Zenit is part of the overall international positioning and sponsorship strategy adopted by Corum. Due to our historical roots and the legitimacy in the sailing world, our main sponsorships were linked to international regattas before. For its worldwide sponsorships, Corum has chosen Loick Peyron and Ben Ainslie as its top-flight ambassadors, and decided to support Energy Team, the French Challenger participating to the America’s Cup World Series. These sponsorships have an international impact in terms of brand image. Besides these worldwide projects, we chose partnerships for the different countries and regions by focusing on essential players, which share the values with Corum. The FC Zenit is definitely considered as a key player in the field of football on an international basis and with a strong implementation in Russia. This partnership is based on a win-win situation and a great opportunity for us to strengthen significantly our commitment and our visibility on the Russian market and I am very proud to be part of this project. It shows the immense faith Corum places in this country and the important investments the brand is determined to do. —Who was the initiator of cooperation – Corum or "Zenit"? —As I am personally a football fan and share the values of this sport, we immediately sensed a connection with the Corum philosophy and initiated the cooperation. This sport implies strong teamwork and requires commitment and selflessness. I am proud to associate Corum with this major football club and to create a timepiece with the colors and identity of the FC Zenit. Besides, I particularly appreciate Russia, which is a beautiful country and an important market for the watchmaking industry. I will continue to strengthen our presence there and give Corum the means to reinforce the brand image to beam over the Russian market. —How will be distributed the emitted line - 40 watches? —To honour this partnership Corum has created a dedicated high-end watch, the Admiral’s Cup FC Zenit Chronograph 48, an exclusive chronograph model limited to 40 pieces. This Corum watch is perfectly suited to the sporty performance of the FC Zenit and I am convinced that the players of team are the perfect ambassadors for this limited Special Edition. It will be distributed by the FC Zenit Flagship stores in St.-Petersburg. —Whether elaboration and launch of model for more general circle of admirers FC "Zenith" is planned? Corum is determined to capitalize on this partnership and to organise events around the watch and the football club. We are always elaborating partnerships on a long-term basis and will definitely come with new events and a promotional plan for the next coming years.

During the presentation ceremony, the first watch made by Corum for the Zenit edition was given as present to Zenit’s head coach Luciano Spalletti.


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36 Watch Market JUNWEX magazine

Raketa brand is alive; only it has slept for some time

The employees of the Petrodvorets Watch Factory like to tell the story of how Mikhail Gorbachev trying to explain to Italian journalists the meaning of perestroika showed them his watch with a zero instead of the traditional figure 12. “We start from the beginning, from zero”. The wrist of the first and the last president of the USSR bore the Raketa brand watch.

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he production of this most popular brand started at the Petrodvorets Watch Factory in 1962, a year after our country opened the space era with a launch of the first man – Yuri Gagarin – into space. And the factory acquired what is now called with the word “brand” unknown in the 1960s. Factory The history of the enterprise is traditionally traced back to the 1721 Decree by Peter the Great to found the Imperial Stonecutting Factory for

making products of precious stones, the factory archives contain a copy of this decree. The factory invited masters from the Netherlands and Italy who made different adornments of precious stones. In 1917, the factory switched from jewellery making to military products, like the whole country: optical devices were manufactured for the needs of the army, as well as parts for the newly developed watch industry in the USSR. Watch making proper was started at the factory already after the World War II in 1949, and the frist watch made by the


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Watch Market 37

Petrodvorets Watch Factory (than it had a humble name TTK-1) was naturally called Pobeda (victory). This watch was also manufactured then at the First Moscow Watch Factory. In the mid 1960s the factory grew in size to a whole city block, and, in principle, was a cityforming enterprise with the number of employees up to five thousand persons, its qualified specialists were trained by a vocational technical school and a technical college. And practically all of their graduates found jobs in their specialty! In the 1970s the factory’s products were exported to nearly thirty countries and not only to the socialist countries which would take anything offered by the “big brother”, but also to most developed capitalist countries including the USA, Japan and even to Switzerland. Only the United Kingdom imported up to a million Raketa watches per year! That is probably why residents of Petrodvorets like to remember the story of Gorbachev’s watch as it is quite symbolic. The factory is starting its new history practically from zero. Its largest workshop where all parts for watches are made occupies the premises where in the best years small batches of tools were made, in those times the factory manufactured not only all components but also necessary tools. What has remained from those times at the factory? In the room that is now used for work with jewels – artificial rubies, there stands in a corner the red challenge banner that workshop #3 won in the socialist competition among the factory’s collectives. It is still proudly demonstrated by Galina, former head of manufacturing of this workshop. But the red banner is too little to revive the glorious history. It is good that there still remain people who did it. Master The oldest worker of the Petrodvorets Watch Factory – Boris Medvedev is now 75 years old. In 1958 after the radical reduction of the army by Khrushchev, the graduate of the military college faced the choice: what to do? And he came to the factory. ‘From the beginning I worked in an assembly line’, tells Boris Medvedev, ‘although they did not use to place new people there, my neighbour recommend me. In those times an apprentice

The job title printed on the business card of the oldest worker of the Petrodvorets Watch Factory – Boris Medvedev is quite laconic: watchmaker


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38 Watch Market JUNWEX magazine

Cyril Haulet from Switzerland “takes lessons” from Russian watchmakers

was attached to a worker and practiced a concrete operation. Soon I managed to pass to debugging, i.e. to final adjustment of a movement when due to some reason: either a defective part undetected earlier or a defect in assembly, it should be adjusted to operation condition.’ . In the mid 1970s Medvedev worked for two years in London as pre-sale servicing specialist. ‘Different things happened during cargo unloading in Heathrow: boxes with watches got apparently thrown on the conveyor, as sometimes happens in our country ... Well, my work was to make sure that in the end everything worked and had best appearance. And there were exported not only Raketa watches, but also Poljot and Vostok watches as well as watches from the Zlatoust factory.’ One should not idealize the past times: the Soviet Union sometimes fought for the Western market by dumping. While Citizen watches comparable in class to our brands in England cost 75 pounds a piece, Raketa and Poljot watches were sold at 25-35 pounds. But our products also had certain disadvantages such as modest design. ‘We had a watch that sold extremely well abroad; it had a round case with “ears”. However, it is impossible to produce the same model without modifications for many years’, continues Medvedev. ‘And the wish to do absolutely everything by ourselves did not always play to our benefit. Our competitors had long used quartz glass to cover the dial which, by the way accounted for nearly half of the cost, while we continued to use plastic because up-to-date material had to be purchased from external suppliers. A similar story can be told about laying for our “amphibia” model: this part of required quality could have been ordered from the Krasniy Treugolnik factory, we thought we were wise enough ourselves.’ However, the Soviet history of the Raketa brand is the most glorious, especially in comparison with the late 1990s when the factory was nearly completely sold. ‘The Petrodvorets Watch Factory practically ceased its existence, but something had to be done. The Orel factory that had a debt to us paid with movements for wall clocks, they sent about five hundred pieces. But they needed to be fit somewhere. We tried to order cases, it turned out too expensive. We tried to fit them in Dutch tiles, it was also expensive. We started to insert them

in round piece of glass … And the market already offered a wide range of products, even watches from India!’ In view of all this, one cannot but remember the times when Mr. Tkachenko, legendary director of the Petrodvorets Watch Factory in the mid 1970s, managed the whole situation at the enterprise and around it with a single move of the brows and a menacing question ‘What?!’. Descendants The current management has come to the factory from the West. Count Jacques von Polier, a financier by education, and an adventurer by nature came to Russia, where he had certain historical roots, within a student exchange programme in the 1990s and remained here. He had been involved in many things before he had a chance to participate in the watch business. Then he thought it a sort of hobby: to come to the enterprise once a week to see how the things go. As he recognizes himself, at the beginning this plan was for ninety percent an adventure which gradually turned into enthusiasm. Jacques became creative director of the Raketa factory and its main ideologist, while his British friend from the times of the student exchange programme, David Henderson Stewart, also a descendant of Russian emigres, became technical director for manufacturing. The philosophy shared by the young (each is under forty) top managers of the Petrodvorets Watch Factory is extremely simple: except Kalashnikov and the matrioshka doll, Russia has no other historical brands that would reflect the creative nature of the people. Lukoil and Gazprom do not count as they pump money from beneath. The unique character of Raketa is that it is the only watch factory in Russia making its own movements from A to Z; and also in the fact that all of us wear on their wrist about two hundred minute parts many of which are measured in microns. And people making these movements are unique source of knowledge and experience that should not vanish together with them. These are not empty declarations. The factory has organized a watchmaker school now training about fifteen students. All of them work at the factory and each has a tutor. This actually means a revival of the Soviet system for professional staff training the experience of which would be of use in the current capitalist reality.


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Watch Market 39

By the way, now at the watch and movement assembly site among 13 operators a student from a Swiss watch school undergoes onsite training. Cyril Haulet chose himself to get professional practice at the Petrodvorets Watch Factory the stand of which he attended at the BaselWorld 2011 show: ‘Here I have an opportunity to familiarize myself with the whole watch production cycle when at a similar enterprise in Switzerland I would sit at one site and would practice one operation.’ For justice sake it should be noted that the Swiss do not only study in Russia, but also teach our students. While only starting his work in the watch business in 2009, Jacques von Polier invited three specialists from Switzerland to the Petrvrorets Watch Factory. One had previously worked at Breguet and Maurice Lacroix, the second had dealt with logistics and manufacturing at Rolex, the third, a former employee of Hautlance, is now responsible for computerization of the new manufacturing activities in Petrodvorets. The development of manufacturing was actually aided by the global crisis due to which many Swiss watch companies started to sell their equipment that certainly was not new, but at the same time was relatively cheap. Anniversary The 290th anniversary of its foundation that was celebrated at the Petrodvorets Watch Factory in early November is certainly not that much of an anniversary. However, the reviving enterprise is quite in need of such piece of celebration. The managers were disappointed that another batch

David Henderson Stewart and Jacques von Polier believe in the future of Raketa of equipment from Switzerland had not arrived before the celebration due to bureaucratic delays at the customs. The veteran workers rejoiced meeting their friends whom they had not seen for a long time. The Petrodvorets factory’s community choir sang at the festive ceremony in the workshop: the performance by old ladies dressed in folk apparel was quite touching. Answering the question regarding how he sees the 300th anniversary of the factory Jacques von Polier said without lingering, as if he prepared the answer in advance, ‘Raketa will mean for Russia the same as Louis Vuitton for France and Rolex for Switzerland. Raketa brand is alive; only it has slept for some time.’ Vladimir Soloviev


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40 Russian Jewellery Trade Club JUNWEX magazine

Reliable Partner

2011

The Reliable Partner competition organized by the Russian Jewellery Trade Club and RusJewellerExpert Consulting and Rating Agency is destined to determine best sales companies on the Russian market. Objective and honest results are guaranteed by the fact that nominees are promoted only by supplier companies. It is manufacturing enterprises that propose for participation in the competition those shops which enjoy impeccable reputation and have excellent recommendations based on joint work. The objective of the competition is to stimulate conscientious relations in the jewellery business and to form a positive image of jewellery retail with end consumers. How do the winners of the competition assess the Reliable Partner award? How does this award influence their business? These aspects are related by the laureates of the Reliable Partner 2011 competition.

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or a long period of work our company has established not simply business, but also amicable, even friendly relations with partners, and, as known, you do not let down your friends. Many thanks for cooperation to the companies Adamas, Almaz-Holding, Estet Trading House, Nika Trading House, Diamant, Jewellers of Ural, Russkiye Samotsvety, Platina, Master, Adamant Trading House and many, many others. Without participation and confidence of those companies it would have been much harder for us to establish and develop our business. The victory in the Reliable Partner competition is a great honour for us. This award increases the rating of our company and to a certain extent our own self-esteem. It is actually an additional responsibility to our partners, suppliers and manufacturers of jewellery products, as well as to our staff. Life goes on and we will further our work and company development. In the near future we plan to open two shops and two sections in shopping and entertainment centres of Yuzhno-Sakhalinsk under our own patented brand Gold&Art. I wish health, prosperity, good revenues and long life to all representatives of the Russian jewellery industry. Thank you for your trust!

A. Urumyants, Head of Retail Chain, Yuzhno-Sakhalinsk


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Russian Jewellery Trade Club 41

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am a person with a steady attitude to life “Treat your business partner as you would like to be treated yourself”. This means timely payments and preliminary discussion of all aspects of the deal. The fact of being given another Reliable Partner award is a great honour for me as businessperson, a high estimation of my attitude to business. When I was awarded the Reliable Partner diploma at the trade fair opening, I was very touched. I thank the Russian Jewellery Trade Club for objective judgement: the decision to name as one of the winners a salon from a small Uralian city of Lesnoy is worth its weight in gold! The diploma will take a deserved place in the salon interior, will give us even more consumer confidence and will make us be even more careful in selecting products. The award of such prestigious professional competition practically deprives us of the right for mistake, as we bear great responsibility before ourselves and our customers.

N. Voloshina, “Gold” Jewellery Salon

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his award was not given to us by chance. We have been on our way to such success for a long time. The Reliable Partner award is a result of many-year fruitful cooperation with suppliers. Alongside always making timely payments, we also expand the product range of our shops with new collections of suppliers. The Reliable Partner title once again emphasizes the name of our company in the sense that we work just with Russian manufacturing enterprises, and do not sell counterfeit products. And already for five consecutive years we annually prove by our business activities the conformity with this honourable award status. Thanks to our reputation of honest and fair businessmen on the market, the circle of suppliers who want to work with our company is expanding, and those suppliers propose us more flexible conditions for supply and sales. . A. Fedorenko, Head of “Russkoye Zoloto” Retail Chain, Protvino


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42 Russian Jewellery Trade Club JUNWEX magazine

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care very much about such words as reliability and integrity. Therefore, such award is a very important appraisal for us. Certainly we use it to our advantage in negotiations on cooperation. This is an important factor in proposal of representation. But beside professional recognition of our achievements, I was pleasantly surprised by opinions about working with us that were given by our partners when I was collecting the questionnaires! By the way, not many know that participation in the competition requires PARTICIPATION proper. The surprisingly warm and friendly reaction to my request to complete the form was a real award to me! So many smiles, pleasant words ‌ All these were sincere! My feelings were hard to describe!

V. Batrashina, Head of Solntse Moye Co., Khabarovsk

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lready for the second consecutive year the Almaz Regional Jewellery Chain has become a winner in the Reliable Partner national competition! The Almaz company has been awarded another time not by chance. It is a logical result of impeccable professionalism of all staff of the company, cooperation based on mutual understanding and confidence of partners and suppliers. The Almaz Regional Jewellery Chain from Irkutsk is convinced that the most important factors for success are reliability, openness and honesty to partners. The Almaz company thanks all its partners for their trust and high estimate of the company’s activities.

T. Gotsaljuk, Almaz Regional Jewellery Chain, Irkutsk

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o achieve mutually beneficial and long-term relations with largest jewellery manufacturers is one of the main objectives of the Zolotaya Rus Trading House. Many thanks to those who voted for our company! The Reliable Partner title proves that for fifteen years our company has gained a reputation of a stable sales company. A secret of our successful development is unshakable faith in success, high quality of products and special attitude to our partners and customers. We will continue developing at a rapid and decisive pace, finding new business links within the industry and establishing firm relations. E. Shevelev, Zolotaya Rus Trading House, Khabarovsk


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Russian Jewellery Trade Club 43

Russian Jewellery Trade Club Official Representative of CIBJO in Russia

Welcome to the Jewellery Shows of RESTEC JUNWEX!

2012 - 2013 The leading public organisation — Russian Jewellery Trade (RJT) Club invites you to visit the international jewellery exhibitions in Russia: XI International Jewellery Show

VIII Jewellery Wholesale Trade Fair

XXI International Jewellery Forum

Junwex

Junwex Moscow

JUNWEX

New Russian Style 30 May – 3 June, 2012 All-Russian Exhibition Centre, Moscow

15–19 September, 2012

St. Petersburg 6–10 February, 2013

All-Russian Exhibition Centre, Moscow

LENEXPO, St. Petersburg

Junwex WATCH

The RJT Club will provide you with: • Visa support • • Special offers for accommodation in hotels of St.-Petersburg, Moscow, Ekaterinburg • Matchmaking • Interpreter’s service • Contact us: Russian Jewellery Trade Club Tel. +7 812 235 8383, +7 812 320 93 11 E-mail: club@rjexpert.ru • Website: www.junwex.com


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44 Название раздела JUNWEX magazine

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Fashion Seasons

Fashion Seasons Catalogue offers For consumers: • Opportunity to learn more about the latest jewellery trends, exclusive and main trends products

For manufacturers: • Effective innovations in exclusive jewellery sales • Brand promotion For retailers and wholesalers: • Opportunity to create an order system for exclusive jewellery without additional investments • Sales increase and customer demand aligned by seasons

Circulation - 100 000 copies. Distribution: Free distribution among the members and partners of the Russian Jewellery Trade Club (more than 6 500 wholesalers and retailers).

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