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Taking part in Baselworld is proving to be expensive for many brands. Several exhibitors complained privately last year that they were pressed into building larger, more elaborate and more expensive spaces, and into moving to less desirable locations.
A few said they were priced out of the show altogether. The cost of exhibiting in Hall 1.0, the most important area, was as high as $5m for long-term leases, according to several sources last year.
The $454.5m renovation of the Messe Basel exhibition grounds was undoubtedly a success in terms of the attendance at the 2013 edition of Baselworld. It attracted a record 122,000 attendees, a 17 per cent increase on 2012.
However, while attendance rose, the number of exhibitors fell by nearly 20 per cent to 1,460, and there will be approximately 1,400 exhibitors attending this year, according to Baselworld officials.
Jean-Claude Biver, chief executive of watch brand Hublot, owned by LVMH, said last year his company invested SFr3.3m ($3.7m) for a 10-year lease in Hall 1.0, the featured space in the exhibition centre, but the company expects that investment to result in a turnover of SFr200m. “Basel is a fantastic deal,” he says.
However, if you do not have that amount of investment capital, it may not be such a good deal.
As Baselworld becomes more luxurious and exclusive, two other trade fairs have entered the market to fill the void.
The larger of the two is the Europe Jewellery & Gem Fair, being held from April 1-4 in nearby Freiburg, Germany, organised by UBM Asia, a Hong Kong-based trade fair and publishing company.
The second is The Diamond Show, on March 27-28 and 30-31 in Basel, organised by the Rapaport Group, best-known as a diamond industry publisher. Baselworld officials refused to comment on the other fairs.
Wolfram Diener, UBM’s senior vice-president for Asia, said the Freiburg fair is aimed at jewellery industry professionals in search of middle-market products and services who are based within a six-hour drive or train commute from the city. As one of the world’s largest jewellery trade fair companies, UBM Asia hopes to capitalise on its international network of manufacturers and distributors and bring them into a new market, along with European companies. The dates overlap with Baselworld (March 27-April 3), which is no coincidence, allowing those in the trade the opportunity to attend both shows, as Freiburg is only about an hour away by train.
“A lot of the mainstream jewellery in Europe is no longer the stuff you see at a fair like Basel,” Mr Diener says. “The retail price tag of $300 to $2,500 is no longer well served by the existing shows. We received a lot of encouragement from the European industry to go into the market and fill this gap.”
The fair is billed as Europe’s first “international jewellery sourcing fair”, meaning attendees can purchase products on site and take them home, filling another gap in the European jewellery industry.
“At other trade shows, direct sales on the show floor are not allowed. Sales and transactions happen anyway. It’s not official, but it still happens to some extent,” he adds.
The positioning of the fair seems to be a hit, as space is sold out at the Messe Freiburg exhibition space, with more than 420 companies signed on, about twice the number expected, the organisers say.
About 100 exhibitors are from abroad, including some who have never sold at a European fair before, such as precious gem dealers from Colombia and manufacturers from Thailand and Hong Kong.
“We are bringing some products that people could only find overseas,” Mr Diener explains.
There are even a few companies exhibiting in both Basel and Freiburg, including Miiori, a luxury jewellery brand. Melissa Vance, US sales director, says the company wanted to try something new.
“Although we still consider Baselworld among the most important events of the year, we are excited for the fresh perspective that Freiburg has to offer,” she says. “In years past, the lack of lodging in Basel has discouraged people from attending the show. We hope that Freiburg can provide a solution to this problem.”
Diamond companies seem to be the most enthused about new exhibitions. About 70 will be exhibiting in Freiburg, primarily from Israel and Antwerp. Another 70 diamond and diamond-jewellery firms will be at The Diamond Show in the Markthalle building near Basel’s railway station.
“The reason we started it, honestly, is because people wanted to be in Basel during the show with a diamond-focused event,” says Alissa Goren, show director. “The show is open to the trade as well as private collectors and investors.”
Leibish Polnauer, president of Leibish & Co, an online fancy coloured diamond and jewellery dealer based in Israel, may be speaking for many when he explains why he chose to leave Baselworld. “Baselworld has made very successful efforts to brand its Basel show, giving centre stage to luxurious watches, but leaving diamond, jewellery and gemstone dealers as second-grade operators on the back stage,” he says.
“With exploding costs, the quality of traffic during the past two years declined sharply,” he adds. “We believe that the Rapaport diamond show will provide us with a platform that is better suited to our fancy colour diamonds and fine jewellery brand . . . at a more sensible cost.”
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