GemFest Italy Speakers Provide Insight into Russian Market

By Jeffery E. Pizzino

Two noted Russian jewelry industry experts shared their experience and explained the keys for successfully conducting business in Russia at GemFest Italy in Vicenza Jan. 13. The lecture, held at the Sala Trissino Conference Hall, was the second largest in the annual event’s history. Its success was due, in part, to its topic – “Selling Jewelry in Russia: A Dynamic and Revolutionary Market.” Sponsored by the Vicenza Trade Fair, it featured guest speakers John Helmer and Sergey Alkhazov.

Helmer, who writes for The Russia Journal, is considered one of the most widely read business specialists in Russia. He is also a former professor of political science and an advisor to government heads in Europe, the United States and Asia. Alkhazov is an attorney and chairman of the board for Tsentr Yuvelir, a Moscow-area jewelry retailer with 23 jewelry stores.

The Russian market is only expected to account for about 1 percent of the Italian jewelry industry’s 2003 exports when final figures are determined, said Helmer, but he added there are incentives for Italian jewelers to continue to pursue this $1.7 billion market. Mainly, because of Russia’s current 30 percent annual growth rate, a lack of comparable market opportunities elsewhere and competition with the Germans, Swiss and French, he said.

Italian jewelry exporters, however, must begin to contemplate a new method of dealing with the Russian market, he added, because it appears the rate of growth for Italian exports is slowing.

Alkhazov shed some light on aspects unique to the Russian jewelry market and said foreign capital investment will be its strongest influence over the next one-to-two years. He based his prediction on three factors – the Russian population’s increasing income, the country’s ability to produce all the necessary raw materials for its own jewelry industry and the profitability within the next three to five years of investments in jewelry manufacturing and retail trade enterprises.

Director of GIA Italy Fred Stocco pointed out that “insider knowledge” of the political scene provided by Helmer and Alkhazov helped explain where the Russian economy is headed.

“The audience was pleasantly surprised at the openness and frankness of both speakers,” Stocco said. “[They learned that] yes, money can be made by Italian manufacturers working with Russians – if they follow the prescribed formula Mr. Alkhazov presented.”