De Beers’ brand glitters in India
India is poised to topple the US to become the secondlargest market for De Beers’ Forevermark brand of diamonds this year, as the company expects to more than double its sales volume in the country.
China, the brand’s leading market, accounts for 50 per cent of sales volume, with the US and India each accounting for 15 per cent. This year, however, India's share of sales volume to the brand's global sales will increase to 20-25 per cent.
"Last year, our sales volume in India stood at 60,000 pieces. This year, we expect this to increase anywhere between 100,000-130,000, which will make India the second-largest sales volume generator for the Forevermark brand," Stephen Lussier, chief executive officer of Forevermark and executive vice-president of marketing at the De Beers Group, told Business Standard.
According to a report from Indian Commodity Exchange, the US, China and India are the three major diamond consuming countries globally.
"We are expanding the use of advanced technology on smaller diamonds from the previous 14 cent to 10 cent, which will bring in smaller daily wear diamonds in our portfolio in India, too," Lussier said.
The group in India has been focussing on the daily wear category and has avoided delving much into wedding and celebration collections. This year, the company will focus on rolling out designs at lower price points (with 10 cent diamonds) than its existing catalogue.
A company official said the Forevermark brand could not be inscribed on diamonds less than 10 cents, which makes it impossible to roll out products in the sub-10 cent price point.
Its products in India start from ~25,000 and scales up to ~25 lakh.
Lussier said diamond prices in India, according to the global trend, was poised to remain at 2016 price levels this year. The average global price realisation for the Forevermark is between $ 2,500-3,000 apiece.
According to the official, the jewellers' strike and demonetisation last year, had impacted the company's revenue growth in dollar terms, but its volume growth was significant at 80 per cent year-on-year. This year, Lussier expects an improved consumer spend and traction in the two-diamond ring category, which will boost its sales.
"The unpredictability of the world in which we live was emphasised by Prime Minister Narendra Modi's surprise demonetisation drive in November (last year). This has much more direct relevance to the diamond sector and it's likely that we will continue to experience the impact in the Indian industry in the coming months, even if the programme yields a positive outcome in the long run," Bruce Cleaver, CEO of De Beers Group, had said in January.
The Forevermark brand has a 20 per cent market share in the price segment it operates in. This price segment accounts for 35 per cent of the total diamond market in India.
It also plans to increase its presence to 230 stores by the end of 2017 from 200 and will come up with three more exclusive outlets in Delhi, Mumbai and Kolkata, besides its pilot exclusive store in Bengaluru.
Forevermark's growth trajectory in India will be to snatch the market share from the generic diamond category in the goods and services tax (GST) regime.