Since the beginning of this year, brick-and-mortar gem businesses have seen a sharp drop in sales at international trade fairs and expos. Although there were more than 20 Myanmar gem and jewellery stalls at the 16th China-ASEAN Trade

Expo held in Nanning of Guangxi autonomous region, China, in September,  business has gotten from bad to worse.

“Demand for Myanmar jewellery and gemstones over the past two years has been falling. But this year’s expo has been the worst of all. Only the cheapest jewellery has been sold,” said Daw Phyu, a spokesperson from Lin Yaung Chi Jade and Jewellery Shop.

The traders said this is because a growing number of jewellery buyers in China are now shopping on WeChat at prices that are almost impossible to compete with.

WeChat is a popular social media and e-commerce app from China. To accommodate demand from the rising number of Chinese tourists to Myanmar, the Central Bank in February permitted the use of WeChat for payments on a trial basis for three months. It later extended the trial period for another three months.

Traders from China are now selling illegal  and untaxed Myanmar gems and jade to Chinese buyers on WeChat. “Most of the prices posted on WeChat are by Chinese gem traders or Chinese people who have visited Mandalay. These gems are not from official gem markets,” said Ko Aung San Oo, manager of Shwe Phyo Oo Gem and Jade Shop.

“The rising trend of illegal and low-quality goods being posted for sale on WeChat at impossibly low prices is a big deal and has to be controlled. The authorities should know that legal businesses that pay tax and promote high-quality, Myanmar-produced jewellery and gems will suffer. Already, there are less Myanmar traders selling high-quality jewellery at the expo. Everything is low-quality and this reputation is bad for the country,” he said.

According to Section 38 of the Myanmar Gemstone Law, raw jade stones must be taxed at 10 percent while rubies, sapphires and other raw precious stones excluding diamonds and emeralds are taxed at a rate of 9pc.Processed precious stones excluding diamonds and emeralds as well as jewellery are taxed at 5pc.

However, most gems and other Myanmar jewellery sold on WeChat have not been taxed. “We had to complete a series of inspections and pay taxes to come to this expo. But after arriving here, there are days when we couldn’t even sell a thing. Demand in the market is not like it used to be in this country. Buyers prefer the cheap, illegal goods,” said one gemstone trader who participated at the expo. – Translated

Source: https://www.mmtimes.com/news/gem-jewellery-traders-myanmar-face-competition-wechat.html