turkish success of jewellery sales to tourists

1www.gold.org Turkish Tourist Jewellery Market

Turkish Success of

Jewellery Sales to Tourists

21st Feb 2005


Turkish Economy

Turkish Tourism

Turkish Jewellery Market

Tourist Jewellery Market

Tourist

Tourist as Jewellery Buyer

Tourist Market Retailers

Jewellery Exports

Outlook

3

www.gold.org Turkish Tourist Jewellery Market

Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Outline:

• EU have decided that the accession negotiations with Turkey will start in 2005 which might be as long as 10 years

• Inflation is moving towards one digit level after several decades

• Exchange rate is around mid 2001 levels

• 6 zeroes are dropped from TL (YTL)


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Source: EIU 2004 2001 2002 2003 2004 2005e

GDP US$ bn 145.6 184.2 239.7 287.8 330

Real GDP growth (%) -7.5 7.9 5.8 9 6

Consumer price inflation (avg. %) 54.4 45 25.3 10.8 8

Population (m) 69.3 70.3 71.3 72.3 74.3

Exports of goods fob (US$ bn) 34.3 40.1 51.2 62.1 72

Imports of goods fob (US$ bn) -38.9 -48.5 -65.2 -82.4 -90

Exchange rate (avg.) YTL:US$ 1.225 1.507 1.501 1.442 1.663


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Sources:WTO,SIS&Trade estimate

2001 2002 2003 2004 2005e

Number of Foreign Tourists (m) 10.8 12.8 13.3 17.5 21

Tourism Revenue (US$ bn) 7.4 11.9 13.2 14 16.5


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Worldwide ranking by tourism revenue in 2003 (US$ bn)

Source: WTO 2001 2002 2003

World 459 480 523

1 USA 71.9 66.7 64.5

2 Spain 32.9 33.8 41.8

3 France 30 32.7 37

4 Italy 25.8 26.9 31.2

5 Germany 18.4 19 23

6 UK 16.3 20.5 22.8

7 China 17.8 20.4 17.4

8 Austria 10.1 11.2 14.1

9 Turkey 7.4 11.9 13.2

10 Greece 9.4 9.7 10.7

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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

2005 Tourist market

investments

• 50 New hotels under construction

• 50,000 New beds will be ready for 2005 summer season

8


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

bought 36 units of Airbus and 15 units of Boeing airplanes in July 2004. Delivery will be in 2005.

9


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Outline:

• Third biggest gold consumption after India and USA

• Largest gold coin market and coin manufacturer in the world

• Third biggest jewellery manufacturer after India and Italy


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Pure gold tonnes

Sources: WGC, IGE,

TSM &

Trade estimates

2001 2002 2003 2004 2005e

Bullion Imports 103 129 214 251 275

Scrap 89 61 45 47 50

Jewellery exports 42 50 53 58 65

Suitcase trade 22 23 23 19 18

Jewellery sales to locals 49 59 99 130 145

New coin minting 26 29 47 47 48

Total gold offtake 116 131 199 240 265


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Sources:

WGC, WTO, SIS

&

Trade estimates

2001 2002 2003 2004 2005e

Number of Foreign Tourists (m) 10.8 12.8 13.3 17.5 21

Tourism Revenue (US$ bn) 7.4 11.9 13.2 14 16.5

Jewellery sales to tourists (tonnes) 41 43 53 58 68

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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Seasonality of incoming foreign tourists

Source: SIS

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1 2 3 4 5 6 7 8 9 10 11 12

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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Regional Trends in Incoming Tourists m Country Groups 2003 2004 % chg

1 OECD (Europe) 7.9 10 25.4

2 OECD (Other) 0.4 0.5 21.9

3 Other European 1.9 2.3 22.9

4 C.I.S. 2.1 2.8 34.6

5 Asian countries 1.4 1.7 20.7

6 African countries 0.2 0.2 13.9

7 Other 0.1 0.1 30.2

10 Total 14 17.5 25.7

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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Traveling by

millions 2003 2004 % chg

Air 10 12.6 25.6

Road 2.9 3.7 28.5

Sea 1 1.2 19.7

Railway 0.1 0.1 16.4

Total 14 17.5 25.7

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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Country of origin of tourists % share

Germans 20.1

Russian Federation citizens 9.5

UK citizens 9.5

Dutch 8.5

Austrians 4.7

Bulgarians 4.4

French 3.9

Belgians 3.7

Iranians 2.8

Greeks 2.1

Other countries 30.8

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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

What did they hear beforehand (47% heard about Turkish gold):

• Cheaper72%

• Special Turkish designs34%

• Better workmanship32%

• Bigger variety24%

Research by Piar-Gallup

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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Whom did they hear it from:

• A friend71%

• The travel agency26%

• Previous visitors26%

• Promotional brochures24%


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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

After they saw the jewellery what did they think?

• Not expected that cheap 72%• Not expected that much variety34%• Not expected that many 26%• Expected them to be cheaper 13%


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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Purchase decision:

• After they arrived60%

• Decided before40%


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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Top motives for the tourists who decided to buy before their trip:

• Cheaper 73%

• Special Turkish designs10%

• Better workmanship33%

• Better selection25%


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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Top motives for the tourists who decided to buy after they arrive:

• Attracted me 49%• Realized they were cheaper

39%• Good salesman help 30%• Lot of varieties 26%• Better workmanship 22%• Special Turkish designs

16%


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Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Self purchase or gift:

• Self 80%• Gift 20%


23


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Adornment or store of value:

• Adornment90%

• Store of value10%


24


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Types of jewellery bought:

• Ring 34%• Chain 32%• Necklace25%• Earring 23%• Bracelet 17%• Pendant 10%


25


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

78% of the tourists said that they have never bought any jewellery from another country they visited.


26


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Jewellery retailers for tourists:

• 6,000 in Mediterranean coast

• 1,000 inside Grand Bazaar in Istanbul

• 1,000 in other tourist areas

27


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Mega jewellery stores for tourists:

• 40 Jewellery mega-retailers

• With average 3,000sqm shopping area

• With an average of 100 salesmen

28


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Mega jewellery retailer stats:

• Average 100,000 tourists visit annually

• Average 20,000 sales per year

• Average 35,000 items sold per year

29


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Mega jewellery retailer stats:

• Average item price US$1,000

• Main customer is German and Russian with 30% share each

• Rest is Europeans (Swiss, Austrian, Belgian, Dutch) with some Americans

30


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

0

50

100

150

19861987198819891990199119921993199419951996199719981999200020012002200320042005

Turkish Jewellery Exports (fine gold tonnes)

Tourist andLuggageTrade

DirectExports

31


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Direct Exports vs Tourist Sales

• Turkish jewellery manufacturers are

the second biggest exporter in the world

• The tourist sales and direct exports are helping one another by creating awareness on Turkish jewellery brands

• Summer tourist retailers are catering their customers in their country of origin in winters


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

Sources:

WGC, SIS

&

Trade estimates 2004 2005e 2006e 2007e 2008e

Number of Foreign Tourists (m) 17.5 21 24 27 30

Tourism Revenue (US$ bn) 14 16.5 18.5 20 21

Jewellery sales to tourists (tonnes) 58 69 77 84 89

33


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

5 Year Targets:

• Become one of the first 5 destinations in number of tourists

• Become one of the first 5 countries in tourism revenues

• Rate of increase in gold jewellery sales to tourists faster than the increase in tourism revenues

34


Turkish Economy

Turkish Tourism



Tourist



Jewellery Exports

Outlook

...during your next vacation, we wish all of you

a very happy holiday in Turkey, in the cradle of

civilizations, enjoying the turqoise beaches of

Cleopatra or skiing and hiking mount Ararat or playing golf or simply

sipping your Turkish coffee and enjoying your Turkish delight and buying lots of Turkish jewellery making

your holiday unforgettable...

turkish success of jewellery sales to tourists

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