Diamond jewellery purchase declines in H1 on DeMo, strike
DIAMOND jewellery consumption in India continued to decline in the first half of 2017, finds leading diamond company De Beers. In 2016, consumption was affected by jewellers’ strike and demonetisation.
Diamond jewellery purchase in India fell by 8.8 per cent in rupee terms to Rs 192 billion last year. In dollar terms, the decline was 13 per cent at $3 billion. The decline continued in H1 2017, but was lesser than 2016, finds De Beers. “The jewellers’ strike and the demonetisation initiative led to a decline in demand in local currency, while weakness of the rupee versus the US dollar led to a greater decline in US dollars. Diamond jewellery consumption has continued to decline in H1 2017 but at a slower rate, and sentiment has improved,” the company said in a global report on diamond jewellery trends.
India, which used to have a share of 7 per cent of global jewellery consumption in 2015, saw the share shrinking to 6 per cent in 2016. The US accounted for the largest share in global diamond jewellery purchase with 47 per cent, followed by China with 16 per cent and 7 per cent by Gulf countries.
In 2016, India stood at the fourth position in terms of consumption.
According to De Beers, in India, the effect of demonetisation has proved to be less severe than anticipated, but retailers are still cautious in their outlook. The business community has generally welcomed the government’s fiscal and monetary reforms. Despite short-term disruption, these are seen as creating a more stable and professional environment and an opportunity for improved economic growth.
Larger retailers and companies in the midstream that have been able to maintain normal operations are seeing the benefits of transparency and compliance with more stringent financial regulations. Smaller operators in the cash economy, however, have suffered more significant disruption.
De Beers also finds that the Indian trend of selfpurchase is spreading to other markets with the improvement in the economic independence of women customers. “The steady increase in female economic influence is closely related to women’s growing social empowerment. These two forces are transforming the behaviour of female consumers, whose financial independence and confidence are growing simultaneously,” the report said. “One country with a unique purchasing profile is India, where selfpurchase is an established cultural norm. In India, women are the main decision-makers in almost all diamond purchasing,” the report added.
De Beers’ research shows that women are becoming increasingly active purchasers of diamond jewellery. In 2016 in the US, 31 per cent of all women’s diamond jewellery was bought by women themselves. Selfpurchasing of non-bridal diamond jewellery pieces grew in the US by more than a third between 2005 and 2015, reaching 33 per cent. Women are increasingly taking to self-purchase in China and Japan as well. Women’s diamond jewellery is usually gifted to women in these markets.