RAPAPORT... Not long ago, gold was the Indian consumer’s preferred form of accessorizing, not only because of its glamor, but because it was considered a safe investment option. Gradually, however, the Indian economy opened itself to globalization and international trends, including the wearing of diamond jewelry. Coupled with the efforts of the Diamond Trading Company (DTC) to promote the precious stone in India, the desire for diamond jewelry has caught up with the Indian woman.
DIAMOND JEWELRY MARKET IN INDIAAccording to Vijay Jain, chief executive officer (CEO) of Orra, Rosy Blue’s diamond jewelry retail company:“Even though diamond jewelry’s market share is only 15 percent as against 85 percent for gold jewelry, the growth rates are largely skewed in favor of diamond jewelry. Today, while the gold jewelry segment is growing at 6 to 7 percent per annum, diamond jewelry is growing at the phenomenal rate of more than 20 percent per annum. In a span of three years, this segment will double and diamond’s market share should be well above 20 percent. With this huge market opportunity, more brands are being launched. Even large corporations are entering the jewelry market. This is clearly a very exciting time for the Indian jewelry market. There is a clear place for international brands inthe market, targeting a niche segment of customers.”
R.K.Menon, CEO, Renaissance Retail Venture Private Limited (RRVPL), the retail initiative of Renaissance Jewelry Group, confirms the presence of approximately 60 brands in India that have diamond jewelry in their range of offerings. RRVPL sells under the brand name Lucera. “The size of the diamond jewelry market is about 15 to 20 percent of the total jewelry market in value terms,” Menon goes on to say, “which is about $3.571 billion annually. The branded diamond jewelry market is about 10 percent of that total.”
Moreover, says Tejas Soni, chief operating officer (COO), Raa diamond jewelry, “The Indian retail industry is changing drastically as the economy is growing consistently at 9 percent. The purchasing power of the middle class is also booming. However, the Indian diamond jewelry market is not uniform in comparison with the U.S. or U.K. markets, as quality and design preferences vary across the county.”
GOLD VERSUS DIAMOND JEWELRYTanishq, the jewelry division of Tata, one of India’s largest industrial houses, closed its 2006-2007 fiscal year with a turnover in excess of $297 million. While the company began with just diamond jewelry, it now offers a wide range of gold selections as well. “As Tanishq was originally envisaged as a manufacturer of jewelry for export, its focus was on diamond and gem-set jewelry,” explains Tanishq’s V. Govindraj. “So it was only natural that the company launched its retail chain of exclusive boutiques with only diamond jewelry. Gold jewelry was added in the boutiques a few months after the launch to complement the diamond-accented styles.” The availability of gold jewelry not only brought more customers to the boutiques, Govindraj says, it eventually increased the sale of diamond jewelry. Another change the company made, based on research that found diamonds were being perceived as too expensive, was the launch of a “daytime” collection. Positioned as diamonds that one could wear every day, the price range starts at $85. Adds Govindraj, “These efforts of Tanishq ensured that Tanishq diamonds has grown at a compounded annual rate of 35 percent, far ahead of the industry growth reported.”
With 37 years of market experience in diamonds, Aspri launched its diamond jewelry collection in India four years ago. Commenting on the preference shift to diamonds, a spokesperson from Aspri says, “Gold jewelry was mainly an investment. Now, the thinking of the new generations has changed. They want something practical, as well as something they can enjoy. Diamonds give them just that. New designs and different shapes and cuts create an ever-changing variety that attracts people from all areas of the market. Women have always been stunned by the brilliance of diamonds over the elegant lull of gold. Men now appreciate the everlasting quality and large investment in diamonds. People have forgotten many superstitions that were associated with gold and diamonds.”
Giving credit to DTC, Menon shares, “Diamonds have always had an aspirational dimension among consumers and this holds true for Indians as well. The perceptions of consumers are changing. With the introduction of diamond brands and promotion by DTC marketing, consumers are now aware of the 4Cs of diamonds and the pricing. Gold jewelry is losing its charm, especially with the metro and urban population. Indian consumers want to wear jewelry every day and not occasionally.”
TRENDS MOST IN DEMANDOrra’s Jain points out that “Diamonds combined with precious stones like rubies and emeralds and pearls are witnessing a resurgence. This combination gives a very rich and regal feel to jewelry that is deeply rooted in tradition, making it a natural choice for bridal wear. Carved stones in both precious and semiprecious varieties are also becoming huge trends. Another important variation that has worked well for us is the rose cut in our bridal neck pieces. Small-ticket items like earrings, pendants and rings are a rage. Dressy cocktail rings and fancy cuts in diamonds are the latest trend. Design is the key element, combined with high-carat diamonds.”
The distinction between “daily” wear and “occasional” wear, says Raa diamonds’ Soni, is also a factor. “Daily wear consists of simple designs, geometrical and Western, in white gold, while occasional and party-wear jewelry is experimental, with colored stones like rubies and emeralds. Some designs also bank upon uncut diamonds.” Aspri shares that “New cuts and shapes like marquise and princess are more in demand. Men’s jewelry has increased drastically,” with purchases of cufflinks, rings, bracelets, chains and neck pieces made of diamonds.
Referencing stones and cuts most in demand, Jain says, “Round brilliants have always been most popular in the Indian market. Other cuts like marquise, pear, oval, emerald, princess, trillion, etc., are also catching up. Rose cuts, seen in jewelry from the Mughal Era, are witnessing a resurgence and have become a popular niche segment. Higher-carat solitaires are in demand as well. Yellow and champagne-colored diamonds are slowly coming into the market; however, the response to these diamonds has not been very positive.”
Elaborating on the trends, Menon comments: “Traditional Indian styling will always be classic and never go out of fashion, but consumers are more and more open to contemporary styling in diamond jewelry. The trick is to give a traditional look with a contemporary twist. The larger-diamond look in daintier pieces with minimal gold is well received by the consumers. Engagement rings have gained importance in India as in the West. Solitaire rings are in. Demand for diamond-studded watches and pens is also on the rise. Today, jewelry is bought not only for personal use but also for gifting.”
Consumer Reaction (sidebar)What do Indian women prefer — gold or diamond jewelry? In a survey of 75 respondents conducted by Rapaport Diamond Report, 85 percent of women in the 18-to-35 age group preferred diamond jewelry to gold, and 60 percent of women between 35 and 55 years of age preferred diamond jewelry.
One survey respondent, Batul Roowala, a 26-year-old woman who loves accessorizing herself with jewelry, said: “When I was young, I had my mother buying me gold jewelry every year for any occasion. But for a couple of years, with brands like Tanishq, Orra, Gili, etc., advertising so heavily for diamond jewelry, our preference has automatically shifted to diamond jewelry as gold is something you cannot wear every day. Diamond jewelry is suitable for even daily wear and it goes with Indian as well as Western outfits.”
Jewelry Demand Across India (sidebar)Consumers in the north prefer bigger diamonds, flashier styling. They accept SI quality; they are price conscious.
Consumers in the west look for traditional and elegant designs in VS to SI quality and are willing to pay higher prices.
Consumers in the south prefer only VVS and VS quality with traditional styling in yellow gold.
There is a change from heavy, ostentatious jewelry to lightweight, elegant, everyday wear jewelry.
Stones And Cuts In Demand
Cuts: round brilliant cut, princess cut and baguettes.
Stones: diamond, ruby, emerald, sapphire and semiprecious stones – garnets, topaz, amethyst, citrine, pearls and peridot.
In the traditional Indian jewelry sector, the uncut
diamond is still a big favorite.
Article from the Rapaport Magazine - October 2007. To subscribe click here.