RAPAPORT... While India has long maintained its leadership position in diamond cutting and polishing, it is time for the players to pull up their socks and take note of close competition from China. To support the diamond sector and the jewelry trade, the government of India has established Special Economic Zones (SEZs) that offer economic and tax advantages and also provided various tax subsidies in the recent budget. But it is up to the diamond industry players to spruce up their image and pull more business into the country. Trade here depends on strong business ethics and unmatched customer service, along with very good marketing activities.
The Market This YearAnil Shah, director, Venus Jewel, was jubilant in announcing that “In spite of a slack market the past four months, our sales of $25.37 million during March 2007 were an all-time high for any single month, surpassing the previous high of $24.27 million in January 2007.” Sanjay Shah, director, R T Diamond, said, “So far our business has been stable and we are busy. Most of our products are selling quite well in the market. The Cushion 145 is doing well at Helzberg and we have created and are testing lots of new products for Mother’s Day and for the summer season and we are optimistic.”
Mehul Choksi from Gitanjali Group said, “The Indian market is shifting from unbranded to branded jewelry as much as it is moving from investment-guided to fashion-dictated buying. Naturally, our performance is getting better. We have recently launched our new brand “Desire” – a combination of steel and diamonds that very much caters to young girls and the evolved metrosexual Indian men. The fact that it is in steel makes it affordable, and the response to the brand has been very encouraging.”
Anaggh Desai, chief executive officer (CEO), Damas India, is also enthusiastic. “Except for a seasonal lull in the first half of January and at the end of March, we have managed to grow at the numbers that we had projected for ourselves. In fact, in addition to Valentine’s season, when our new designs did extremely well, our latest store in Gold Souk, Gurgaon, has had a tremendous response, leading us to review our overall orders. Though having spent only seven months in the Indian market overall, Damas has been getting consistent response and is satisfied with its decision to expand rapidly in the Indian subcontinent.”
Marketing Mantra
Ready-to-wear jewelry retailing leaves retailers with unlimited options to boost their brands although the same is not true for industry traders dealing with unfinished product. Anil Shah said, “We always prefer initiatives that are beneficial for our customers in the long run. Our Venus Confidence Development Strategy has helped us to develop a business model and we believe in educating our customers with transparent approaches on a large scale, which can be seen from the fact that we distribute our Venus Grading Booklets to provide detailed knowledge and insights into the grading of diamonds.” In addition, he said, “We have recently started providing digital images of our diamonds on our website, making it easy and convenient for our customers. Recently, our turnover has exceeded $226 million from our manufacturing of large-size, high-end premium solitaires, with 41 percent of our total sales coming through our websites.”
Jewelry retailer Gitanjali Group has been at the forefront of various initiatives and the latest was its association with Lakme Fashion Week in Mumbai where they had the inaugural show in association with top Indian designer Vikram Phadnis. Setting aside a budget of approximately 100 crores — $24 million — for their advertising, the Gitanjali Group has the best of Bollywood celebrities endorsing the brands under their umbrella. Spending approximately 1.8 percent of their sales revenues on marketing, Damas is at the forefront of introducing seasonal offers for its customers. Recently, the company introduced the Damas Shubh Din — “Auspicious Day” — Offer in which any couple getting married between April 12 and June 20, 2007, can show their wedding invitation to qualify for special discounts on diamond jewelry and watches.
The Marketplace
• Trading activity improved toward the end of March but buyers say they do not have enough choice to make a good selection. The main concern for the polished market is the volatile tendency of the dollar, which has put brakes on polished sales. Demand is still strong for -2 in the range of $200+ category. There is an extreme shortage of goods in this category.
• Movement is better in VVS-VS/I+ in the stars category.
• Activity is good in melee goods in I2+/I+.
• Movement is good in 0.08 to 0.18 carats in the price range of $300 to $450 and demand is good in the
1/6, I1+/I+ category.
• Movement is good in 1/5, 1/4 and1/3 in piqué goods. Movement is also good in 1/5, SI1+/H+.
• 0.50 carats have better movement in
I1-I2/I+ and VVS/H+ goods.
• 0.70 carats are in good demand but 0.80 carats+ are difficult to source in most categories.
• 0.90 carats are in very strong demand with supply shortages in
the SI1+/I+ category.
• 1 carat is in good demand for collection and piqué goods but there are shortages for premium sizes.
• 2 carats have average movement in
collection goods.
• 3 and 4 carats are in good demand with some shortages in supply.
• 5 carats+ are in very strong demand with extreme shortages.
Fancy
• Demand is strong for princesses,
marquises and pears in collection goods across the board.
Article from the Rapaport Magazine - May 2007. To subscribe click here.