Despite 12% decline in the rough and polished diamond, diamond jewellery manufacturers and retailers posted staggering performance in the third quarter of the current financial year mainly due to effective change in their product mix. With a shifting of focus on large-size high-margins diamond jewellery to low-size volume–driven ornaments.
“Continuous rise in consumer products has squeezed individual’s savings. As a consequence, consumers have been opting for rich-look low-price ornaments, a trend which was noticed in the last few months,” said Sandeep Kulhalli, Vice President (retail and marketing), Tanishq.
Against 23% growth in overall sales of Titan Industries at $556 million, jewellery segment including Tanishq brand contributed $468.8 million, a rise of 27%, in the October–December quarter.
A Citi Research report said that Titan has reduced the share of higher margin diamond studded jewellery to 22% in the third quarter of 2013 as compared to 32% in the second quarter.
Similarly, other branded jewellery producers including Tribhovandas Bhimji Zaveri (TBZ) and PC Jeweller (PCJ) have also reduced their share of higher margin diamond studded jewellery from 27% and 32-33% in the second quarter to 24% and 27% respectively in the third quarter of the current fiscal, the report said.
This necessarily means, consumers shift is happening from high-end value driven ornaments to mid- and low-end jewellery items.
“Yes, the consumers’ buying trend is skewed towards low-end jewellery items. Primarily because of consumers are demanding low end ornaments,” said Mehul Choksi, managing director, Gitanjali Gems.
Gitanjali Gems reported its sales from diamond segment grew 26% to Rs 1869.8 crore in the third quarter of the current fiscal as compared to Rs 1487.1 crore in the corresponding quarter of the previous year. Similarly, Shrenuj & Co also witnessed a dramatic growth in diamond sales to Rs 1199.45 crore for Q3, 13 compared with Rs 620.10 crore in the same quarter last year.
Studded jewellery sales of the company, however, fell from Rs 294.46 crore to Rs 250.17 crore in the quarter under review.
Gitanjali has expanded its presence in diamond sector to increase its profitability. According to Choksi, overall diamond presence has gone up by 35%age points in the last few months.
Interestingly, De Beers which controls around 40% of rough diamond market share reported 11% decline in output at 27.9 million carats in 2012 compared to 31.3 million carats in the previous year.
While rough diamond price fell by 12% in line with polished prices during the calendar year 2012, De Beers posted 16% fall in its overall sales at $6.1 billion compared with $7.3 billion in the previous year.
Indian jewellers have not witnessed any repercussion of global price fall which could be in the pipeline and may come with a lag effect, said Kulhalli.
“Continuous rise in consumer products has squeezed individual’s savings. As a consequence, consumers have been opting for rich-look low-price ornaments, a trend which was noticed in the last few months,” said Sandeep Kulhalli, Vice President (retail and marketing), Tanishq.
Against 23% growth in overall sales of Titan Industries at $556 million, jewellery segment including Tanishq brand contributed $468.8 million, a rise of 27%, in the October–December quarter.
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“Obviously, shift is happening as consumers feel not to invest too much in one particular ornament especially when gold and diamond prices have been continuously rising,” he added.
A Citi Research report said that Titan has reduced the share of higher margin diamond studded jewellery to 22% in the third quarter of 2013 as compared to 32% in the second quarter.
Similarly, other branded jewellery producers including Tribhovandas Bhimji Zaveri (TBZ) and PC Jeweller (PCJ) have also reduced their share of higher margin diamond studded jewellery from 27% and 32-33% in the second quarter to 24% and 27% respectively in the third quarter of the current fiscal, the report said.
This necessarily means, consumers shift is happening from high-end value driven ornaments to mid- and low-end jewellery items.
“Yes, the consumers’ buying trend is skewed towards low-end jewellery items. Primarily because of consumers are demanding low end ornaments,” said Mehul Choksi, managing director, Gitanjali Gems.
Gitanjali Gems reported its sales from diamond segment grew 26% to Rs 1869.8 crore in the third quarter of the current fiscal as compared to Rs 1487.1 crore in the corresponding quarter of the previous year. Similarly, Shrenuj & Co also witnessed a dramatic growth in diamond sales to Rs 1199.45 crore for Q3, 13 compared with Rs 620.10 crore in the same quarter last year.
Studded jewellery sales of the company, however, fell from Rs 294.46 crore to Rs 250.17 crore in the quarter under review.
Gitanjali has expanded its presence in diamond sector to increase its profitability. According to Choksi, overall diamond presence has gone up by 35%age points in the last few months.
Interestingly, De Beers which controls around 40% of rough diamond market share reported 11% decline in output at 27.9 million carats in 2012 compared to 31.3 million carats in the previous year.
While rough diamond price fell by 12% in line with polished prices during the calendar year 2012, De Beers posted 16% fall in its overall sales at $6.1 billion compared with $7.3 billion in the previous year.
Indian jewellers have not witnessed any repercussion of global price fall which could be in the pipeline and may come with a lag effect, said Kulhalli.