Gold has the ability to attract people to itself. Gold companies tend to expand. Toufik Abdallah is one of the brothers who owns Damas, a well-known Middle Eastern jewelry chain. He also leads the organization of Dubai gold traders and jewelers - Dubai Gold & Jewelery Group. The group, in turn, is a non-profit organization that holds the famous "golden lotteries" during the Dubai Trade Festival and many other popular events. We talked with Toufik Abdullah about the activities of the group, the “golden chain” of Damas and the state of the gold and jewelry trade market, meeting him at the end of the festival “Dubai Summer Surprises”.
- I’ll start with the traditional question. Please tell us what an organization such as the Dubai Gold & Jewelery Group, well known both in the Emirates and abroad, is engaged in today?
Dubai Gold & Jewelery Group owes its appearance to the Dubai Trade Festival. It was formed in 1996 when the DLF was first held in the emirate. Actually, the idea of creating a group was dictated by the conditions of the first festival, to participate in which was much more interesting and more profitable together than individually. Therefore, when we turned to all the owners of the gold shops and invited them to become members of the group, very many agreed.
I must say that the Dubai Gold & Jewelery Group is a non-governmental and non-profit organization. Its main task is the high quality of trade and the success of all members of the group. But the main thing that sets our group apart from the rest is the promotions and campaigns that we have been conducting for more than 12 years. It all started with our first “Golden Lottery” at the first Dubai Trade Festival, where 1 kg of gold bullion was played daily among buyers of gold jewelry. Everyone could try their luck. We are still continuing this action, given its incredible success. We started our activities at the Gold Market, in a small office. Today we have a large corporate office and our own trading license, allowing the group to conduct expanded activities.
- Mr. Toufik, today the price of gold in the world has increased many times ...
Well, let's say, not only gold is growing in price, but also oil, and food, and much more.
- Yes, and yet the question arises, how, in your opinion, does Dubai manage to maintain the status of a "city of gold"? Why do people continue to come here in order to purchase jewelry with or without precious stones, diamonds? What's the secret?
Dubai has a rich history of gold trade, if you go back to the 1940-50s, when merchants from India and Iran began to come to Dubai and open their workshops and shops here. Why exactly here? Because in those days, the Indian subcontinent had very high taxes on raw materials. And Dubai since time immemorial has been a center of import and export of raw materials - gold, precious stones. In the 1950s and 60s, a market for the manufacture of jewelry began to form here. First, from silver, then from gold, later jewelry with gems and diamonds. But in fact, Dubai is a unique market for many reasons.
- What distinguishes it from other international markets?
We sell gold jewelry at world prices. That is, if the price of gold in world markets rises, jewelry costs more, and, conversely, in the case of lower prices for raw materials, finished products become cheaper.
- What then form the discounts that customers always get and in all the gold shops of the city, regardless of gold prices?
In other countries, such as Russia or European countries, gold jewelry prices are fixed. And it does not matter that gold rises or falls in price, jewelry costs the same. The reason is the trade margin. In many countries, this margin is two to three times the actual cost of the product. Whereas in Dubai, prices are formed based on the cost of the finished product plus 10 or 7 percent. It turns out that the set limit on the fluctuation of retail prices in Dubai is very small. That is why we must be sensitive to the dynamics of global gold prices. And if today we, for example, sell gold jewelry at the rate of 80-90 dirhams per gram, then in Europe the price for the same product, the same Italian factory will already be about 250 dirhams per gram. And this is a fixed price. That is why the Dubai market is extremely competitive. Nowhere in the world is gold sold like it is in Dubai. Even Italian gold products in Italy are sold four to five times more expensive than here.
But, nevertheless, why can we sell cheaper, but they can’t? The answer lies on the surface. Dubai merchants sell gold jewelry in huge volumes. In each gold store of the city we record from 60 to 100 customers per day. In Europe or other countries, such indicators are simply not possible. There, from 3 to 10 buyers a day can look into a jewelry store. And they will sell there 20-30 grams, and in Dubai - kilograms. That is the difference.
Today, Dubai not only buys and sells gold products. There is Dubai Gold & Diamond Park - a free zone for jewelers, a gold processing factory operates, and its own Diamond Exchange operates. What else will be done to improve the gold trade in the emirate and create a worldwide reputation for Dubai as a center of gold and diamonds?
If you take any industry, you will see that a variety of factors are involved in its formation. The only thing Dubai does not have is gold mining. We do not have natural reserves of gold; accordingly, we cannot mine it in the UAE. With this one exception, we have all the links of the "golden" cycle: factories for processing gold and other precious metals; workshops for cutting precious stones and diamonds.
These are important links in a single chain, since everything mined from the bowels of the earth, in the first place, needs processing - cleaning, cutting. During processing in Dubai, gold bars of various denominations, gift and jubilee coins are issued in which people are happy to invest their money. Gold bullions can be from 18, and 21, and 22 and 24 carat gold, depending on their further purpose. After the factories, these blanks go to wholesalers, and only then get to retailers and jewelers who make jewelry from them.
This whole chain is well established in Dubai, and in order for services at each stage to be complete and efficient, support is needed for structures such as the Gold and Diamond Exchanges. That is why a body like the Dubai Commodity Trading Center (DMCC) was created, where I was the chairman for the first four years of its work. Such projects are necessary to maintain the market. And if someone wants to buy gold for their future activities, to conclude futures contracts, then this can be done in Dubai - there is a Golden Exchange.
- And if you want to buy or sell diamonds at an auction, the Diamond Exchange is at your service. And is all this certified by world standards?
Of course. The Dubai Diamond Exchange is a member of the World Federation. The United Arab Emirates is still the first Arab country to become a member of the World Diamond Federation. In other Arab countries in the region, there is no longer any international Diamond Exchange.
- Are these institutions designed only for industry professionals or consumers who have become more discriminating? Can buyers “from the street”, for example, hand over diamonds for examination?
Of course, the entire chain we created is designed for both large market participants working with wholesalers and investors, and consumers. The Dubai Diamond Laboratory has been created and successfully operates in the city. After all, when we talk about a whole chain of services, we need a certain authority that has the right to certify them. We have the Dubai Commodity Trading Center (DMCC), and with it a number of laboratories capable of confirming the quality of a particular product. In a word, over the past few years we have achieved a lot in supporting the gold trade industry. The end result of all these efforts was a clear answer to consumer questions - am I buying a quality product? Is this a good price? I buy the original, not a fake? and so on.
The final support to our activities is provided by local authorities, in the person of the municipality, which conducts ongoing inspection of stores for compliance with established trade rules. Inspectors monitor the purity and quality of metals, precious stones, diamonds. That is why the service chain is comprehensive, as there is strict control of everything that is sold on the market. Once again, the prices in Dubai are extremely competitive, no one can resist them.
- Today, much is said about the introduction of VAT in the Emirates. How will this tax, as well as the estimated tax on luxury, including expensive jewelry, affect jewelry prices, and will it?
As regards the introduction of VAT, this is one of the instruments for influencing the economy. In many countries, a person who buys an expensive car pays about 30% of the purchase price. This, in general, is a good measure. After all, if I am a seller and pay an import duty, then I will definitely include the size of this duty in the price of my goods. If you are interested in my personal opinion, then, as a trader, it seems much more appropriate to add this tax to the price, and then return it to the state than to arrange a carousel from books and reports.
I do not think that the introduction of VAT will somehow affect buyers of jewelry. The difference between wholesale and retail prices, this is ultimately the seller’s profit, not VAT at all. But it will be easier to regulate the market. In Europe, the VAT rate is about 15%, in Russia and Ukraine - 18%. In the UAE, we say that a 5% import duty will become a VAT rate. It is unlikely that this will be very noticeable in consumer prices for goods, given the current level of inflation.
- Returning to the activities of the Dubai Gold & Jewelery Group, except for the unification and promotion of gold and jewelry retailers, what else does it do?
The group is engaged in training merchants. We conduct specialized courses throughout the year. As part of our training programs, not only basic knowledge is given on determining the quality of precious metals and stones, but also trading skills, rules of behavior with customers, and successful sales techniques. In addition, we offer design courses for everyone who wants to study jewelry. Moreover, everyone can sign up for courses, although, of course, people working in group member companies have more advantages and special tuition prices.
- What awaits the Dubai Gold & Jewelery Group in the near future?
Probably, I repeat, saying that the group is a non-state structure that supports all its members. The larger the group of companies, the more activities and various initiatives can be carried out as part of the DGJG. Everything is interconnected. In the near future - the opening of additional courses that will further strengthen the chain of gold trade in Dubai. Maybe we will come up with initiatives to organize new marketing and advertising campaigns outside the framework of traditional trade festivals - summer and winter. But we always emphasize that we are a non-profit organization. Everything we do is designed to improve the quality of the gold and jewelry trade in the emirate. And we must carefully monitor the costs, understanding that in the end it is the money of the group members.
- Let's talk a little about the business of the Abdullah family - the Damas company, of which you are a representative, and which is today considered the largest chain of jewelry and luxury watches in the Middle East and North Africa. How many foreign brands are represented at Damas today? What has the company achieved in the last decade?
How many brands? Even hard to count. Every day we introduce something new to the market. Our motto: "Become a home for jewelry brands from around the world." If any of the famous brands wants to be represented at the highest level in this part of the world, then she turns to us - to Damas. We provide them with all the necessary infrastructure - an extensive network of boutiques, management, staff training. At Damas, a professional brand manager is responsible for each brand. Our goal is to attract any international brands that care about their place in the market.
We are proud that today Damas houses collections of jewelry houses and watch manufactures such as Tiffany & Co., Luca Caratti, Roberto Cion, Carrera y Carrera, Pomelatto, Annamaria Camilli, Laurentia, Vacheron Constantin, Sarcar, Aqua Marine and many many others. Knowing this, many buyers plan their trip to the UAE in such a way as to be sure to visit our exclusive boutiques. Damas has many regular customers from Russia and the CIS countries, who for decades have been buying jewelry and watches from us, keeping track of the latest arrivals and even placing orders for the supply of original products, usually in limited series.
All this indicates that our desire to provide our customers with the best choice gives their results. This is about achievements. But we do not stop moving forward, increasing our presence in the countries of the region. Maybe someday we will open our own boutiques in Russia. I do not think that this will happen soon, but there are such thoughts. In the meantime, there are too many projects that need to be implemented both in the UAE and in neighboring states ...
“Thank you for the conversation, Mr. Toufik.” See you soon on the pages of our magazine.
While the layout is ...
During the 65 days of the Dubai Summer Surprises festival, a record amount of gold and jewelry worth 500 million dirhams (US $ 136 million) was sold in the emirate.
According to the Dubai Gold & Jewelery Group (DGJG), which conducted the Glittering Surprises trading campaign and presented all buyers of gold jewelry with a great opportunity to win gift vouchers for gold and jewelry, sales have increased dramatically. Among the main reasons, the group names the steadily high demand for gold jewelry among expatriates and the relatively low gold prices in the emirate.
“Dubai is still the best place to buy high-quality gold and jewelry at the best prices in the world,” said DGJG Managing Director Tawhid Abdullah (Toufik Abdullah’s brother), “and the DLS shopping festival has increased the chances of customers to win, which was a good incentive to buy products from the "solar" metal. Due to its value and historical traditions, gold is one of the most coveted gifts, especially among Asians and Arabs. This year the advertising shopping campaign was so . Successful that sales reached the level of 500 million dirhams in just 65 days Taking into account that the price of gold in Dubai are becoming more attractive, we expect that in front of us - another successful quarter of its sales. "
For 65 days of the festival, 65 lucky ones managed to win vouchers with a face value of ten thousand dirhams (about US $ 2732), for which it was possible to purchase jewelry in DGJG stores. Another nine people won prizes of 50 thousand dirhams (US $ 13661) each. The youngest winner of the "golden lottery" was the one-year-old baby Cyrish Sajir.And the Singam family distinguished itself twice, at first the 1.5-year-old Kirtish Singam became the happy owner of a gift voucher worth 50 thousand dirhams, then he was lucky with his father, Jitendra Singam, who, after a week, won a ten thousand voucher. According to Tawhid Abdullah, representatives of more than 13 countries, including Great Britain, the USA, Russia, Greece, New Zealand, India, Pakistan, Bangladesh, the Philippines, Egypt, Iran, Iraq and the United Arab Emirates showed interest in the Glittering Surprises campaign this year.
