This article first appeared in the JNA May/June 2023 issue.

The time is ripe for Dubai’s unprecedented rise as a major player in the international jewellery and gemstone industry. According to stakeholders, Dubai is favoured for its tax efficiency, financial and logistical infrastucture, product and price diversity, accessibility and solid government support – all pillars of a successful enterprise in any sector.

Specifically, the city is diversifying its specialisation to become the next important coloured gemstone and jewellery destination while fortifying its status as a diamond-trading hub.

What Dubai offers is a well-oiled system that fosters profitability and provides a platform for existing and new businesses, explained Tawhid Abdullah, chairman of the Dubai Gold and Jewellery Group (DGJG).

A step in the right direction is the establishment in 2022 of a dedicated B2B sourcing event in Dubai – Jewellery, Gem and Technology in Dubai (JGTD), which is organised annually by Informa Markets Jewellery and Italian Exhibition Group Spa. The show’s second edition was held from February 12 to 14, 2023.

“We were not successful in creating a B2B fair in the past. The Gold Souk served as our exhibition per se but JGTD is a different league of its own,” noted Abdullah. The international fair effectively upped the ante for Dubai in terms of attracting new opportunities and markets.

Dubai is also attracting strong players in the global diamond and gemstone trade such as Fura Gems, Belmont Enterprises Ltd and KGK Diamonds and Jewellery LLC, to name a few, shared Ahmed Bin Sulayem, executive chairman of the Dubai Multi Commodities Centre (DMCC).

In addition, the Gemological Institute of America (GIA) is opening a new laboratory in Dubai in 2023 through a subsidiary, GIA Laboratory DMCC. According to Bin Sulayem, GIA’s new facility will contribute immensely to the movement of polished diamonds in and out of Dubai.

The International Colored Gemstone Association (ICA) meanwhile is planning to open a gemstone bureau in Dubai to promote gems to the Middle Eastern market. The city is also frequently holding ruby, emerald and sapphire tenders.

Dubai is likewise aiming to gain traction in the lab-grown diamond (LGD) space. This July, DMCC is hosting an LGD Symposium to discuss industry challenges and technological developments.

Business muscle

DGJG’s Abdullah said companies wanting to establish a presence in the Middle East will benefit from a new corporate tax regime enacted in December 2022, which stipulates that UAE businesses will be subject to a 9 per cent corporate tax rate beginning June 2023.

“This means we have one of the lowest corporate tax rates in the region, which is crucial to facilitating business,” noted Abdullah.

Dubai-based companies also cater to a wide range of buyers from the US, Europe and Asia who have varied consumer preferences in terms of design and price points.

Bin Sulayem of DMCC said Dubai is bent on strengthening its position as a leading hub for major commodities, including jewellery and diamonds. The key to Dubai’s efficacy is providing the right ecosystem for each business segment, including coloured gems and LGDs.

“Back when LGDs did not have a home as no exchange would recognise them, we did not mind (welcoming LGD players in the Dubai Diamond Exchange) as long as they disclose properly and they focus on a different market,” explained Bin Sulayem.

DMCC also hosted the ICA Congress 2023 in Dubai in February, which centred on opportunities and challenges in the gemstone trade. Bin Sulayem earlier said DMCC is eyeing to replicate its success with diamonds in the coloured gemstone segment by positioning Dubai as a preferred trading hub.

Industry players

India-based diamond manufacturer Shree Ramkrishna Exports Pvt Ltd (SRK) is upbeat about business prospects in Dubai – a new market for the company.

SRK established an office in Dubai in 2022 to bolster its presence and support its expansion in the city, according to Shreyans Dholakia, brand custodian at SRK.

“Dubai is increasingly growing. A great deal of people are migrating to Dubai and more people equates to more money flowing in the city,” remarked Dholakia. “The city is competitive and geographically accessible. It is a promising market.” SRK exhibited at JGTD 2023 for the first time where it entertained potential customers from Dubai, Doha, Bahrain, Switzerland, Singapore, Australia and Israel.

Dholakia said SRK is prepared to meet strong market demand for fancy shapes, adding that this product segment comprises 50 per cent of SRK’s production. There is also solid interest in melees and stones of 5 carats to 7 carats. Post-Covid, the manufacturer started implementing a different business approach where it produces goods upon order as opposed to keeping stocks ready and offering them to buyers.

Ashish Garg, head of sales at KGK Diamonds & Jewellery LLC in Dubai, also believes that Dubai is poised to become a major jewellery and gem-trading destination, thanks to its competitiveness and geographical location. Further expansion would mean new customers from Eastern Europe and Africa, among other markets, for Dubai-based manufacturers, added Garg.

“Anything that is six hours away from Dubai should be our customer. That goes to show how accessible Dubai is. We would like to cater to this clientele,” noted Garg.

He added that customers mostly ask for certified diamonds of 2 carats and up as well as 10 carats to 15 carats. The most popular shapes are rounds, pears and marquis.

Buyers from the Gulf Cooperation Council – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – alongside India, Asia and Europe meanwhile are more interested in finished jewellery.

“Design preferences differ for each market and companies have to fully understand the segment they want to focus on,” noted Garg. “KGK offers diamonds, coloured gems and finished jewellery. We can cater to a broad range of markets.”

Ionnis Alexandris, antique jewellery expert and founder and CEO of Gemolithos, is also testing the Dubai market.

“After Covid, there was a lot of talk about Dubai being the next big jewellery centre. We want to test this ourselves by networking and building our contact base first,” remarked Alexandris.

The company official said Gemolithos’ hero collections comprising fine gemstones and jewellery has a potential market in affluent Dubai, including high-profile buyers, private collectors and big companies.

“It will take time for us to truly know and understand the market but for now, it is very promising. Our target clientele is here,” he added.

ICA President Damien Cody meanwhile expressed confidence that Dubai will rise to become an important hub for coloured gemstone trading, hence ICA’s plan to set up a gemstone bureau in the city.

“Dubai is the go-to destination for diamond trading. We will work with the UAE government and DMCC to try and establish the same ecosystem for coloured gems,” revealed Cody.

Sparkling future

Abdullah of DGJG said his organisation is encouraging a new generation of jewellers and traders to join the industry. Start-ups can count on government support while organisations like DGJG can provide training in design and marketing as well as assistance in applying for government permits.

“We need new blood in the business and we need young people’s expertise in modern technology and social media. They know trends and what today’s buyers want,” added Abdullah.

Looking ahead, Dubai faces challenges on many fronts, including gold price fluctuation, technological advancements and keeping up with fast-evolving trends. There is also pressure to constantly innovate and adapt to changes.

“Our biggest hurdle is the mindset of the trade. We need to adapt to the new speed of things. Continuous education is crucial,” noted Abdullah. “The best solution is a fusion between tried-and-tested ways and new technology.”

Bin Sulayem echoed this sentiment, adding that consumer engagement is going to be a crucial element of success in Dubai. The rise of social media platforms as well as other advanced applications like virtual reality alongside continuous education can be used to engage with younger buyers.

“We need to listen to the new generation. It is also important to focus on small and medium-sized players and make sure the environment is attractive and welcoming to them,” he continued. “We do not just work with big corporations.”

Moving forward, the success of the sector will hinge upon the narrative behind every jewellery, diamond and gemstone. Bin Sulayem said, “There has been a lot of story sharing – where did a stone come from and what does it contribute to the business? This resonates with the new markets.”