KResearch projects total shipments of gems and jewelry (excluding gold) to the US market may reach USD1.29-1.32 billion this year, representing 3.0-5.0 percent YoY rise. This projection is based on improving retail sales of jewelry, as well as assumption that gold and silver prices had passed their nadir although prospects of substantial increase are not very likely. However, the Fed's rate hike plan must be watched for its impact on consumption. We don't expect any devastating impact on our gems and jewelry exports due to the US administration's ;Buy American and Hire American” policy, or from its abandonment of the Transpacific Partnership (TPP). There is growing concern, however, over Thailand's falling competitiveness, vis-à-vis India, China and Vietnam. Even so, our genuine metal jewelry – led by silver – remains lucrative in the US market but marketing should be adjusted toward segments with higher buying power, i.e., ‘Generation Y' population, being a consumer group of significant size in the US.
After this, it is essential for companies to adapt to changes in the market. Companies producing and exporting goods to the US should make use of e-commerce to generate higher revenues, while not forgetting to improve merchandise presentation and the need to identify viable customers more precisely. Exporters selling semi-finished jewelry components to markets targeted by US protectionism, such as China, should diversifying their risks by entering into other markets in response to production restructuring pursued by Chinese manufacturers. Companies that are looking to base their production in the US may find this to be a good opportunity, too, especially if US consumers are their main target, considering that economic policies there are focusing on driving domestic production and employment. In this regard, they would likely gain tax and investment privileges, but manufacturing costs and human resources should be taken into account if they are conducive to doing business.
Shipments of Thai gems and jewelry, excluding gold, to global market are projected at -3.0 percent to 3.0 percent YoY growth, with a value of around USD6.76-7.18 billion. This means limited growth, given a sluggish global economy and fierce competition in the market as now being faced by Thai companies.