Basel looks to drive luxury goods market

Asian exhibitors left last year's fair after a row over Sars Keystone

The global luxury goods sector is hoping for a big boost over the coming week as the city of Basel hosts its sparkling annual watch and jewellery fair.

As the largest trade show of its kind in the world, Baselworld is aiming to banish a host of problems that have dented consumer confidence over the past few years.

These include the economic downturn, the war in Iraq and the ongoing threat of global terrorism.

The fair will also be trying to repair the damage to its image last year when the Swiss authorities effectively banned Hong Kong, Singapore, China and Vietnam from taking part because of the deadly Sars virus.

More than 300 Hong Kong companies had paid to come to Basel but were prevented at the last minute from exhibiting.

“Last year’s incident was very unfortunate. It was totally unnecessary and so the feeling to be back is actually great,” Frederick Lam, the Hong Kong Trade Development Council’s executive director designate, told swissinfo.

Welcome return

Hong Kong’s return follows a deal signed in September last year between Swiss Exhibition, the leading fair and congress organisers in Switzerland, and the Hong Kong TDC.

Lam said the accord had turned a difficult and challenging situation into a “win-win” partnership.

“It actually has taken a lot of hard work for us to come back to Basel with such a good deal,” he said.

“Now that we’re back, we should actually forget about last year and look forward to the future… I believe that 2004 will be a very good year for Basel and for Hong Kong,” he added.

Neither side has been willing to comment on the financial details of the contract.

Better headlines

The organisers of the fair are cautiously optimistic that this year’s event should bring more positive headlines than in 2003.

“With the outbreak of the war in Iraq, the spread of Sars and an ailing global economy, 2003 was an extremely difficult year for the industry as a whole, but the early signs for this year are much more upbeat,” commented René Kamm, chief executive of Swiss Exhibition.

“We feel that there is an upturn in the market again and exhibitors are very confident that Baselworld 2004 will set a new trend towards more turnover.”

But Jacques Duchêne, the president of the exhibitors’ committee, was more measured in his assessment.

“The current year has not started in a particularly satisfactory manner. However, a trend reversal can be clearly distinguished,” he told the media ahead of Thursday’s official opening.

“The immediate outlook is hence an optimistic one, although a certain measure of caution is recommended. Economic cycles can… develop in somewhat unpredictable directions,” he added.

Zurich flop

One of the big changes this year is the return to Basel of national pavilions. They were forced by the organisers to go to Zurich for the first time in 2003.

The Zurich venue turned out to be a flop, following the enforced absence of Hong Kong and other Asian exhibitors.

The organisers have now spent SFr42 million ($32 million) on bringing 27 national pavilions, including Hong Kong, into a new “Hall of Universe”, which will present unbranded watches, jewellery, precious stones and pearls.

Over the next six years, the hall is to be used exclusively during the Baselworld show. But the organisers are adamant that their costs of almost SFr1 million per day will pay dividends.

Flagship event

This year’s event will once again unite the world’s biggest names in watches and jewellery.

“There can be few industries in the world with such a first-class international flagship event such as this – an event which impacts positively on the global prestige of an entire sector,” commented Swiss Exhibition’s René Kamm.

It is thought that up to 50 per cent of global watch and jewellery turnover at the wholesale level comes from business conducted during the eight days of the fair.

That is one of the reasons why the 2,186 exhibitors from 44 countries spare no expense when it comes to entertaining trade guests in their luxuriously decorated pavilions.

But although the exhibition is open to the public, anyone other than watch and jewellery lovers is likely to leave disappointed.

There are no prices on the watches and jewellery on display and the public won’t be able to buy them.

swissinfo, Robert Brookes in Basel

Key facts

Swiss exhibitors see the following trends:
The top end of the watch market is the first to show growth on the back of a better economic climate.
Most other segments will follow shortly, particularly steel products.
Swiss-made movements are maintaining their worldwide reputation.
Emerging countries have become a specific target because average disposable income is growing.

In brief

Baselworld 2004 aims to drive the luxury good sector forward after several years in the doldrums.

The Basel exhibition is the highlight of the year for the watch and jewellery industry.

Hong Kong is back with a bang this year, with its largest-ever delegation of 333 companies. It is in third place overall behind Switzerland and Italy.

Organisers say they expect 80,000 visitors to attend the event which lasts until April 22.

The show spreads over a gross area of 160,000 square metres.