The Hong Kong Jewellery & Watch Fair has grown considerably from a fair with just 100 local exhibitors gathered in a hotel ballroom to one with more than 2,500 exhibitors that occupies the AsiaWorld-Expo and the Convention and Exhibition Centre. The fair, which celebrates its 25th anniversary this year, opens tomorrow and runs until next Saturday. Running with the event is Asia's Fashion Jewellery & Accessories Fair, which also opens tomorrow and runs until Wednesday at the AsiaWorld-Expo. Exhibitors at the two fairs will include more than 1,000 jewellery manufacturers, 400 loose diamond suppliers, 720 diamond jewellery exhibitors, and hundreds of firms showcasing gemstones. The fair is also host to 870 pearl suppliers and manufacturers of pearl jewellery, and suppliers of equipment and packaging. The concept of trade fairs was new in Asia when the event began. It was three or four years before the concept gained recognition and started to grow. By 1995, when CMP Asia bought the fair, it was attracting 800-plus exhibitors. The event now draws more than 40,000 traders from 140 countries, and 2,500 jewellery companies from 48 countries and regions. The jewellery industry in Hong Kong has undergone tremendous change since the fair began. Hong Kong companies have developed and grown, and production has moved to the mainland where costs are much lower. Universal Jewellery Design Center was one of the first companies to exhibit at the fair and continues to do so. Executive director Kenneth Kwan Yui-man said that following the Asian financial crisis 10 years ago, jewellery companies had to expand their reach to the United States and European markets, rather than rely on companies in Asia for business. He said it took some years to gain the trust of those markets but it was worth the wait. 'Once you gain the trust of buyers, unless something goes incredibly wrong, they won't stop trading with you.' Mr Kwan said the uncompromising quest for quality from US and European brands differed from the Chinese approach to manufacturing which tended to focus on the cost effectiveness over quality. 'That's why Chinese [companies] find it more difficult to build a successful brand,' he said. Mr Kwan believed that as the market matures, mainland manufacturers will take up much more of the world market share. Hong Kong companies still have an advantage now, he said, because they had more experience dealing with western companies. However, mainland companies were learning fast and they would catch up with Hong Kong in five to 10 years. Letitia Chow Mei-lai, director of business development for jewellery at CMP Asia, said there was a growing interest from European jewellers in the Asian market. As the Asian jewellery industry developed and grew more competitive, traditional European jewellers would lose market share. They saw Asian countries as competitors and as fast-evolving markets. They wanted a presence in Asia to counteract their losses, Ms Chow said. She said unhealthy competition between companies was a concern because companies competed for low prices and the profitability of jewellery companies continued to fall. 'In the jewellery industry, the cost for doing business is high while the profit margin is relatively low. When a leather handbag can cost several hundred thousands dollars, jewellery which is made of limited natural resources should be sold at an even higher price,' She said.