Di­a­mond jew­ellery pur­chase de­clines in H1 on DeMo, strike

Financial Chronicle - - FRONT PAGE - SANGEETHA G

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.

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