Branded diamond jewellery set to dominate in next five years

There may not be a Mandira Bedi or an Aishwarya Rai in their advertisements. But many small and medium size diamond jewellers of Gujarat and Mumbai are now bringing out their own branded diamond jewellery collections. And what more, they have already struck a right chord with the consumers.

At present, the share of the branded diamond jewellery is pegged at around 10 per cent of the total market value of diamond jewellery. But this is expected to increase grow at compound annual growth rate (CAGR) of around 25 per cent to cross Rs 6,000 crore in the next five years, surpassing the unorganised diamond industry that is expected to grow at a CAGR of 10 per cent.

As a result, the Surat-based Laxmi Dia is planning to open exclusive branded diamond jewellery outlets across the country and foreign markets; the Mumbai-based Suhasish Diamonds Ltd is planning to almost double the number of its retail outlets selling Ishi's brand of diamond jewellery; and Sanghvis of Surat is planning to create a new entity to sell more and more branded diamond jewellery.

"More and more brands are emerging in the Indian diamond industry. They have been taking over the local markets with competitive pricing and by matching local tastes," said a member of Surat Diamonds Association.

"The ratio of unbranded to branded has changed from 95:5 to 90:10 in the last two years with the launch of over 28 brands and the branded diamond industry is expected to take over local regional players in the next five years," he added.

Of the Rs 50,000 crore Indian jewellery industry, diamond jewellery constitutes 20 per cent of the market at Rs 10,000 crore. "The demand for the branded diamonds is growing rapidly. The branded diamond industry is expected to grow at a CAGR of 25 per cent to cross the unorganised diamonds players in the next five years," said, Manoj Subramanian of Ishi's Jewellery, a division of Suhashish Diamonds said.

The Rs 1,100-crore Laxmi Dia Jewel Pvt Ltd, the second largest exporter of polished diamonds in the country, is now eyeing on the booming market of diamond jewellery in overseas countries, mainly in the US, Antwerp and China.

"With the branded diamond jewellery, 'Cygnus,' we are now planning to set up exclusive outlets in these countries in next two years. In India too many of the working women are showing more interest in branded diamond jewellery. We will be setting up 13 new exclusive outlets in various cities in India during the current fiscal year which is expected to boost its sales revenue from retail segment," said Shekhar Wadke, Chief Executive Officer (CEO) of Cygnus.

According to him, the diamond merchants, who are into cutting and polishing of rough diamonds enjoy the advantages of competitive pricing vis-a-vis the organised big players in the industry. This leads to lower pricing of the diamond jewelleries manufactured by the smaller players such as Laxmi Dia or Ishi's.

There is an increase in the number of branded jewellery players and the market is getting flooded with competitive brands with over 28 brands have been launched in the last two years.

"The demand for the branded products has been increasing due to the organised retailing and aggressive advertising. Ishi's intends to sweep the market through its innovative experimental marketing strategy, creative designs, quality products and value," said Subramanian.

The Indian diamond and jewellery sector is now a highly market savvy industry. Recognising the importance of "marketing", the erstwhile production-driven companies have of late transformed into focused, and market-driven companies.