The Middle East is one of the world’s largest markets with high purchasing power since most countries in this region are exporters of oil and natural gas, specifically those in the Gulf Cooperation Council (GCC), which consists of six members: the United Arab Emirates, Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia. With no or limited capacity to manufacture most products for domestic consumption, these countries depend on the import, not only of consumer products but also luxury, including gem and jewelry. Therefore, this market offers a promising opportunity for Thai gem and jewelry.

The United Arab Emirates (UAE)

        With its excellent growth rate and extremely high purchasing power, the United Arab Emirates (UAE) is one of the Middle East's top economic leaders. It also serves as a gateway to the region. The UAE luxury market continues to grow at the fastest rate in the Middle East, and it is one of the world's largest consumers of gem and jewelry. Most are imported because domestic production is insufficient to meet domestic demand. According to the Global Trade Atlas, the UAE imported gem and jewelry worth 38,793.28 million US dollars in 2022. The five largest supplying countries were the United Kingdom, India, Switzerland, Belgium, and Hong Kong; the main import products were gold, rough diamond, polished diamond, gold jewelry, and synthetic gemstone in order of importance. Thailand is its 21st largest supplier, with gold jewelry and polished diamond as the main products generating a combined share of 81%. The others are colored stones, both rough and polished.

Dubai Gold Souk Image from www.timeoutdubai.com

        

        Dubai is the UAE's gem and jewelry trading center, earning the title "City of Gold" due to its international renown for gold and gold jewelry trading. The historic gold market, known as the Dubai Gold Souk or Deira Gold Souk, is the world's largest gold market and a popular duty-free destination for Arabian visitors and foreign tourists. Moreover, Dubai is a significant diamond trade hub and one of the world's largest rough diamond trading centers.

 

Gold jewelry at the Deira Gold Souk, Image from www.travelvui.com

        As for jewelry designs, consumers favor unique, personalized pieces. Young consumers prefer simple, small, lightweight, and affordable jewelry for every occasion. They also buy jewelry made from various kinds of precious metal, including platinum, silver, rose gold, and white gold. On the other hand, diamond jewelry decorated with emerald, ruby, and blue sapphire is also gaining popularity. Moreover, social and environmental responsibility has emerged as a key consideration in gold purchasing decisions.

Maveroc jewelry product, Image from https://maveroc.com

      

        UAE customers have strong purchasing power and place a premium on high-quality branded products. The gem and jewelry sector is gradually expanding, thanks to the support of local customers and international tourists. According to Euromonitor, the UAE's jewelry retail sales were valued approximately 11.736 billion UAE dirhams (3,197.82 million US dollars)¹ in 2022, and this figure is predicted to expand at a 4% annual rate from 2022 to 2027.

       

        The UAE Import Regulations

       

        The UAE now charges a 0% to 5% import duty on gem and jewelry, in addition to a 5% value-added tax (VAT). Imports between GCC and GAFTA²  members are free from duty. Each emirate has its own customs authority that follows the policies defined by the Federal Customs Authority of the UAE. The importer must be a member of the Chamber of Commerce and Industry and have an import permission. Customs clearance and import documentation are necessary in accordance with international standards.

        The duty is exempted for gem and jewelry imported for trade fair purposes if they are re-exported within 90 days. Every precious metal jewelry must have a hallmark to indicate its purity and weight, and every gemstone must be certified by globally recognized organizations.

Bahrain

       

         Despite its modest size, Bahrain is a high-potential market for gem and jewelry, with one of the world's highest levels of economic stability. The country is ideal for investment and foreigners, has a free trading system, and is more receptive to cultural variety than other countries in the region. Furthermore, because Bahrain is in the middle of the area and adjacent to other GCC members, particularly Saudi Arabia, it serves as a commercial gateway to Saudi Arabia and other neighboring nations in the region.

       

        Bahrainis, in general, prefer gold and gold jewelry, both plain gold pieces and those embellished with diamonds or colored stones. The majority of jewelry contains one-of-a-kind designs, high quality, and hallmarks. Its trade centers include Manama's over-200-year-old gold market Gold Souk and the neighboring Gold City Mall. In Bahrain, around 450 enterprises are licensed to manufacture, sell, import, and export gold and precious metals. The fineness of gold lawfully traded in Bahrain ranges from 14 to 24 karats.

        

        Nonetheless, the majority of gem and jewelry in Bahrain are imported. According to Global Trade Atlas, Bahrain imported 656.93 million US dollars in gem and jewelry in 2022, a 24.39% increase over 2021. United Arab Emirates, India, Switzerland, Italy, and France were the top five suppliers. Gold imports accounted for more than 62% of total imports, with gold jewelry accounting for around 31%. Thailand ranked eighth on this list, with nearly all of its items being gold jewelry.

Image from https://www.afar.com/places/gold-city-manama

       Bahrain's jewelry business is constantly expanding as a result of customers' increased spending power, as well as demand from South Asian and Arabian visitors who frequently select Bahrain as a vacation destination. According to Statista, jewelry sales in Bahrain will be about 43.81 million US dollars in 2023, with an average annual increase of 5.23% from 2023 to 2026.

       

        Bahrain Import Regulation

        For gem and jewelry imports, a 0% to 5% import duty and a 5% VAT are levied, with the duty waived for GCC and GAFTA members.

       

        The import processes and papers adhere to international standards, with certain exceptions for gem and jewelry. Each item of precious metal jewelry, for example, must bear a hallmark. Gold jewelry sold in Bahrain must be composed of 14, 18, 21, or 22-karat gold, while silver and platinum jewelry must have a metal content of at least 830 and 950 parts per thousand, respectively. Natural pearl jewelry is permitted for import, however cultured pearl jewelry is not.

Kuwait

       

        Kuwait is a modest Middle Eastern country with enormous wealth from crude oil and natural gas exports. It is also a luxury market, with the region's third greatest growth rate, after only the United Arab Emirates and Saudi Arabia. Although jewelry can be made in Kuwait, most local businesses are small and family-run, dependent on Indian and Pakistani workers, and the goods are produced using basic tools. As a result, jewelry is in short supply in the country and must be imported. Kuwait imported 477.89 million US dollars in gem and jewelry in 2022, a 20% rise from 2021, according to Global Trade Atlas. The top five supplying countries were India, Switzerland, France, Turkey, and Thailand in order of importance. Over 51% of the import products are for gold jewelry, followed by gold, costume jewelry, and colored stone.

Image from https://www.kuwaittimes.com

        Gold jewelry is the most popular commodity among Kuwaitis as a present during major holiday seasons, as well as a saving and investment assets. They usually prefer the traditional local designs in 21 and 22 karat gold. Customers in Kuwait are also increasingly purchasing diamond-encrusted 18-karat gold jewelry. Younger generations choose stylish, compact, lightweight diamond jewelry in western styles, while gold jewelry with precious and semi-precious stones is gaining popularity. The Central Gold Souk and Souk Al-Watiya are prominent gold and jewelry trading sites in Kuwait.

        

        Kuwait Import Regulations

        

        Importers of gem and jewelry into Kuwait must pay a 0% to 5% import duty. Imports from GCC or GAFTA members are free from duty. The 5% VAT is projected to be collected beginning in 2024.
        

        Because gem and jewelry are restricted items, each importer must get a licence from the government known as a special import license. Because this license will expire in a year, it must be renewed on a yearly basis. Importers must additionally register with the Ministry of Commerce and Industry as an import firm and join the Kuwait Chamber of Commerce and Industry.

        

        Every piece of precious metal jewelry sold in Kuwait must pass the standard criteria. Gold jewelry must have at least 18 karats of gold content while silver and platinum jewelry must have at least 800 parts per thousand and 950 parts per thousand of metal content respectively. The hallmark is required on every piece of jewelry to certify the purity of the precious metal.

Oman

       

        Oman is well-known for creating silver jewelry known as Bedouin Jewelry or Omani Silver, a lengthy heritage that has been passed down through generations of Omani artists. Gold jewelry of 21 and 22 karats is also manufactured, mostly to meet the needs of Omani customers as well as South Asians working or visiting in Oman.

        

        Omanis used to prefer wearing local silver jewelry to display their wealth and as a religious symbol, but gold jewelry is now the most popular, with a rising interest for gold jewelry with diamonds and colored stones. Because of increased purchasing power, the gem and jewelry industry in Oman is quickly developing. Despite Oman's jewelry manufacturing capabilities, young clients choose products with enticing modern designs and high quality, resulting in growing demand for international products.

Image from: www.jawahiroman.com

        

        According to Global Trade Atlas, Oman's import value of gem and jewelry in 2022 was 122.68 million US dollars, up 10.20% from 2021. The five most important supplying countries were Singapore, the United States, India, Bahrain, and Jordan in order of importance. Gold accounts for around 66% of the items, with gold jewelry accounting for roughly 30% and costume jewelry accounting for the remaining 30%. Thailand ranked 13th among gem and jewelry suppliers in Oman, with gold jewelry topping the list, followed by costume jewelry and colored stone (rough stone and polished semi-precious stone) respectively.

            

        Oman Import Regulations

       

        For gem and jewelry import in Oman, importers must pay a 0% to 5% import duty plus 5% VAT; the former is exempted in case of import from GCC and GAFTA members.
        

        Oman has no restrictions on gem and jewelry import, except that products worth more than 1,000 Omani Rial (around 2,600 US dollars)³  require an import license issued by the Oman Chamber of Commerce and Industry. The customs procedure and documentation required are in accordance with international regulations. Precious metal marketed in Oman must have hallmarks for quality certification from an international-standard laboratory, whilst the import of gemstones and gem-studded jewelry necessitates a declaration of gemstone category, quality, and weight in an accompanying invoice.

Qatar

       

        Qatar, known as the "Jewel of the Persian Gulf," is a small country surrounded by sea, with only Saudi Arabia as its land connection. Yet, it is one of the world's richest countries. Qatar is also one of the world's fastest-growing luxury markets. According to Mordor Intelligence, the luxury industry is currently worth around 1.84 billion US dollars and is expected to grow at a 2.55% annual pace by 2023.

        

        The majority of gem and jewelry offered in Qatar are imported. According to Global Trade Atlas data, Qatar imported gem and jewelry worth $2,323.76 million USD in 2022, up 125% from 2021. In order of significance, the top five providing nations are the United Kingdom, Switzerland, Singapore, the United States, and India. The import of gold jewelry was around 94%, followed by polished diamond and gold. Thailand was rated sixth, and nearly all of its items were gold jewelry.

Image from www.qatar-tribune.com

        Qatar's consumption trend is comparable to that of other Middle Eastern countries: gold jewelry is the most popular. The majority of goods are 18 and 22-karat gold in modern and classic styles, with diamond jewelry becoming increasingly popular. Qatari customers like to buy jewelry as a gift for loved ones on special events such as birthdays and wedding anniversaries, as well as on religious holidays such as Eid Al Fitr (which marks the end of Ramadan). Modern designs, excellent quality, ethical procedures, and sustainability are major elements driving demand for gem and jewelry in Qatar.

        

        Qatar's gem and jewelry business is still expanding. According to Statista, the country's jewelry industry is expected to earn 87.66 million US dollars in 2023, with an annual growth rate of 5.69% from 2023 to 2026.

       

        Qatar Import Regulations

       

        Importers of gem and jewelry in Qatar must pay a 0% to 5% import duty with no value-added tax. Duty exemption is available for imports from GCC and GAFTA members.
        

        Importers must be Qatari companies or joint ventures between international and Qatari investors. Only Qatari partners can carry out permit processes, and the firm must register as an importer with the Ministry of Business and Trade and as a member of the Qatar Chamber of Commerce and Industry.

        

        Customs clearance necessitates the use of standard documentation. Anyone entering or leaving the country with more than 50,000 Qatari riyals (approximately 13,699.40 US dollars)⁴ in cash, government bonds, negotiable instruments, precious metal objects, or precious stones must fill out a customs declaration form and provide other information as requested by customs officers.

Saudi Arabia

            

        Saudi Arabia, with a population of approximately 35 million people, is the region's largest market. Its economic wealths is mostly derived from crude oil trade as the world's leading crude oil exporter. Its luxury market grew at the second-fastest rate in the Middle East, after only the United Arab Emirates.

        

        Saudi Arabia has a long history of gold production for over 5,000 years. Its first gold mine, Mahd Adh Dhahab, has been in operation since the reign of King Solomon, having produced more than six million ounces of gold and still having one million ounces remaining. Another major gold mine is Mansoura and Masarah in the Makkah region, where an estimated 250,000 ounces of gold and silver have been produced. Recently at the end of 2022, the Saudi Geological Survey announced that it found a new gold deposit in Aba al-Raha, Medina region, and the government will allow foreign investment in this mining sector. Gemstones are also found in some regions of the country, yielding products including moonstone, sapphire, beryl, amazonite, quartz, peridot, and garnet.

        

        Saudi Arabia is the Middle East's leading jewelry manufacturer, with hundreds of gold jewelers, around 6,000 jewelry merchants, and approximately 30,000 workers. Although Saudi Arabia can produce jewelry, the products are insufficient to meet domestic demand, particularly for jewelry with current designs, hence foreign products are still required. Saudi Arabia imported roughly 3,710.85 million US dollars in 2022, increasing 125% from 2021, according to Global Trade Atlas. In order of significance, the top five providing nations were Switzerland, the United Kingdom, China, the United States, and India. Gold made up 74% of the total import, followed by gold jewelry and costume jewelry. Thailand was the sixth-largest provider, with gold jewelry accounting for 89% of total sales and silver jewelry accounting for 10%.

Image from https://saudigazette.com.sa

       

        In terms of consumption, Saudi Arabia is a major consumer of gold and diamond jewelry. The majority of gold jewelry offered in Saudi Arabia is made of 18 and 22-karat gold. According to the World Gold Council, Saudi Arabia had 37.9 tons of gold jewelry demand in 2022, up 14% from 2021. During the post-covid period, Saudi Arabia's luxury market, which includes gem and jewelry, has developed substantially. According to ARAB News, overall sales of gold jewelry and other types of jewelry increased 36% in Q2/2022 due to the rising price of oil, the country's primary source of revenue, and rising middle-class income.

        Saudi Arabia Import Regulations
       

        The import tariff on gem and jewelry ranges from 0% to 5%, with an exception for GCC and GAFTA members. Except for gold with a purity level more than 99%, VAT is paid at a rate of 15%.
        

        A Certificate of Conformity, or CoC, issued by the SASO is required for exporting gem and jewelry to Saudi Arabia (Saudi Arabian Standard Organization). Customs clearance and export documentation are required in accordance with general international laws.

        

        Saudi Arabia sets scientific specifications for jewelry and accessories sold on its domestic market: lead content must be less than 500 ppm and cadmium level must be less than 100 ppm. The nickel release rate for jewelry that pierces the skin must be less than 0.2 µg/cm²/week, and it must be less than 0.5 µg/cm²/week for jewelry that contact with the skin. Gold jewelry sold in Saudi Arabia must include at least 18 karats of gold, while silver jewelry must have at least 92.5% silver. Hallmarks are also required to confirm the quality of a product.

The Route to the Middle East Market
       

        The Middle East is a prospective market for gem and jewelry since it is a vast market with over 54 million people, one of the fastest expanding economies, and extraordinarily high purchasing power. Entrepreneurs interested in entering this market might examine the following approaches:

1. Research consumer habits, tastes, and preferences, as well as regional traditions and culture. The foundations of the GCC nations are anchored in Arabian and Islamic traditions. Jewelry designs must adhere to Islamic values by avoiding depictions of humans, animals, crosses, and other religious symbols.

2. Go to the target nation to investigate prospects, obtain further information, and gain firsthand experience in order to discover relevant products and appropriate tactics for effective deployment in each country.

3. Understand the Middle Eastern working culture in order to make a positive impression on business partners. In Saudi Arabia, for example, government offices are open from 7 a.m. until 2 p.m. To avoid scorching heat during the day, business meetings begin at 8 p.m. Most individuals sleep during the day and work at night.

4. Identify excellent local partners, maybe by asking Thai officials in the target market to recommend reputable enterprises or organizing meetings with local importers. To boost their prospects of success in this market, entrepreneurs should cultivate rapport, dependability, and respect for their partners.

5. Attend trade shows for gem and jewelry to locate partners or alliances in the target market. Entrepreneurs should attend trade fairs on a regular and consistent basis, not just those related to the gem and jewelry industry, but also others, such as the Thailand Exhibition, which is regularly organized in Bahrain and Oman by the Department of International Trade Promotion, Ministry of Commerce. This event provides an opportunity for Thai entrepreneurs to network with buyers and importers, learn about export potential, promote Thai product images, and raise their value in the Middle East area.

Writer: Wasana Somnate

Editor: Budhiphorn Vichaidist

The Gem and Jewelry Institute of Thailand (Public Organization)

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1. Conversion rate from https://wise.com/th/currency-converter as of March 16, 2023: 1 US dollar = 3.67 Emirati Dirhams

2. The Greater Arab Free Trade Area consists of 18 countries: Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, the United Arab Emirates, and Yemen.

3. Conversion rate from https://wise.com/th/currency-converter as of March 16, 2023: 1 US dollar = 0.385 Omani Rials

4. Conversion rate from https://wise.com/th/currency-converter as of March 16, 2023: 1 US dollar = 3.65 Qatari Riyal