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India
By Zainab Morbiwala
Six months into 2016, things have not changed much for the gems and jewelry industry in India. The key news for June was the signing of a Memorandum of Understanding (MoU) between the Gem and Jewellery Export Promotion Council (GJEPC) and the Diamond Producers Association (DPA).
Since joining the council, Praveenshankar Pandya, chairman GJEPC, has been extremely vocal about the need for a collaborative effort to promote diamond consumption. This concept finally materialized and was implemented at the recent Las Vegas JCK show through the MoU signed between GJEPC and DPA. This MoU is expected to boost diamond demand and to promote the discussion of challenges faced by the diamond industry in India. Pandya declined sharing more details on the initiatives and campaigns that the industry would see as a result of the MoU. However, as reported in The Times of India, it is believed that DPA is set to launch a generic promotion of diamonds in India, the U.S. and China to boost consumer demand. Speaking exclusively with Rapaport Magazine, Pandya explained, “We have collaborated with DPA to do generic marketing of diamonds, which I think has not been taken seriously by anybody for the past decade. We are very positive about this collaboration. We shall keep interacting with them, giving our suggestions and also supporting the efforts with financial participation. That is the main crux of the association.” Kalpeshbhai Vaghani, partner in Kapu Gems, offered his views: “With the MoU between DPA and GJEPC, we can expect to create a positive image of the diamond industry for the end consumer. The initiative has to be aggressive in its approach for the next five years at least for positive results to be achieved. Further, it has to be a collective effort that would include participation from the miners, manufacturers and retailers. Currently, the industry is facing a challenge across the entire pipeline. With this new association, we can expect things to change for the better.”
Speaking with Rapaport Magazine, Pandya had a suggestion for the organizers of the Vegas show. “The India Pavilion was located at the end and appeared to be hidden. So they only had customers with whom they had an existing relationship. No additional customers were seen walking into that area. Organizers need to seriously rethink the relocation of the India Pavilion. People are coming from so far to participate in the show and if foot traffic is not there, it discourages the participants.” According to Pandya, this year, jewelry was seen attracting more attention at the show compared to loose diamonds. He noted, “A good sampling of jewelry was seen, but whether or not that would translate into orders, we will have to wait and watch as it is only in August that orders will start coming in.” Sanjay Shah, director, Gold Star Diamond Pvt. Ltd., said, “This year in Vegas, we did not have something new to offer as the market is still not in a growth mode. I have my concerns with regard to the survival of independent stores. We have seen many independent stores closing this year and consumers moving more to purchasing their jewelry from chain stores. This was one reason we refrained from promoting anything new at the show this year.”
There is not much to cheer about regarding the market dynamics of the gems and jewelry industry in India. Pandya noted, “Nationally, it has been quite subdued because of the prolonged strike that we had for more than two months earlier this year. The jewelers are getting back into the cycle, but it will take time for them to get adjusted, owing to the liquidity crisis that resulted from the strike. All that has to be corrected. Though I am optimistic that the domestic market will be improving over a period of time.” He added, “Internationally, also, there is no great cause of joy. The Chinese market isn’t picking up. Except for the U.S., the demand from other countries is slow.” Vaghani shared, “High-end premium diamonds are moving internationally, but the domestic market is very slow.” Elaborating further, he explained, “If we look at June 2015 to December 2015, the rough companies reduced supply, with the resultant effect of less polished output in the first half of 2016. As there was no huge supply of polished diamonds in the market, the demand for goods was pretty encouraging. As a result, we saw a positive surge in the demand and sales of polished goods. For the upcoming second half of the year, from June to December 2016, we feel the numbers will remain flat as there will be no sudden hike or drop in sales nor in prices of polished diamonds.”Article from the Rapaport Magazine - July 2016. To subscribe click here.
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