TOKYO -- Japan's market for precious metals and gemstones is seeing an influx of buyers from India, as well as China and other Asian countries.
While the Japanese market for precious metals used to be the world's second-largest, after the U.S., it has drastically shrunk as demand from younger generations declines. Now, buyers from abroad are giving the market a jolt. Some are jewelry companies. Others are businesses looking for supplies of metals to use in new technologies, such as fuel cells. Tourists are also hunting for deals.
Parkdiam, a Nagoya-based diamond dealer, held an auction in Tokyo in late June. Successful bids totaled 410 million yen ($3.96 million). That made the auction the company's biggest ever, according to a Parkdiam official.
The top bidder, which made purchases worth 110 million yen, was an Indian-owned jewelry company. The next two leading bidders, which spent 70 million yen and 50 million yen, were also from India. A Japanese company came in fourth place, followed by still another Indian business.
Parkdiam mainly auctions diamond ornaments originally sold during Japan's heady bubble era in the mid-1980s to early 1990s. An Indian jeweler said Japanese products, even secondhand ones, tend to be well-designed and high in quality.
Here to shop
Tokyo's Okachimachi neighborhood has the nation's largest cluster of jewelry stores. Ryutu, one of the retailers, runs a duty-free shop licensed by Japan's tax authorities. The shop opened earlier this year, spurred by an increase in Chinese tourist traffic.
"Chinese tourists account for one-third of customers," a Ryutu representative said, "and the number continues to increase at a pace of 20% per year."
Jewelry prices in Okachimachi are generally low because wholesalers run the shops. This attracts international tourists on the prowl for bargains. While the jewels may be relatively inexpensive, local retailers say tourists mainly buy products priced above 1 million yen.
Financial services group Orix, meanwhile, acquired Net Japan, the nation's largest precious metals recycler, in April. Orix expects the market for the metals will expand around the world and especially in Asia, where the middle-class population is growing. The acquisition reportedly cost Orix some 20 billion yen.
Net Japan rings up sales of 180 billion yen. "Buyers (of precious metals) are Chinese and, if not, Southeast Asians," said Toshiyuki Yoshizawa, the company's founder and president.