Certification, buyback guarantees evoke growing consumer interest.
Latwik Mishra, a middle class employee with a private company herei, was a worried man until he met an official of a renowned diamond jewellery company last Friday. With a budget of Rs 2,00,000, Mishra wanted to buy gold jewellery for his sister’s wedding in March. He’s changed his mind, being now set on diamond jewellery items with the same budget.
Mishra now feels that instead of yellow gold jewellery, his sister should have coloured gemstones and other studded glitter, something he used to feel earlier was impossible.
Diamond-studded jewellery now comes with a buyback guarantee, of 90 per cent of resale value. To gain customers, the jeweller is also offering certificates of purity of precious stones and metals. Hence, diamond jewellery is now an option for us, too, as we can cash on these in case of an emergency, just like gold jewellery items, Mishra said.
Many like Mishra change their mindset when they visit diamond jewellery stores, said Rajiv Jain, chairman of Gems & Jewellery Exports Promotion Council and managing director of Jaipur-based Sambhav Gems Ltd.
“That is the reason the Indian gems and jewellery industry bounced back when other industries in India and overseas continue to struggle to overcome the global economic downturn of 2008,” said Jain.
Twin appeal
The diamond jewellery industry grew 30 per cent in calendar year 2010, as consumers are lured to use items as both luxury fashion and investment. These two reasons coming together are a win-win situation for both jewellers and consumers, Jain added.
The industry is set to continue its growth momentum this year. During calendar year 2011, it is poised for 20 per cent growth, despite high raw material prices.
The resale value of other luxury items such a lady’s purse, watches, etc., were nil, said Jain.
However, consumers can use diamond jewellery and get money back in case of economic tightness, equivalent to 90 per cent of the prevailing market price.
Hence, consumers can wear jewellery items and earn money in case the price of precious metals and stones go up, another jeweller said.
Rough diamond miners, including De Beers and Rio Tinto, have raised prices by at least 60 per cent in the past year due to scarcity in availability. Gold and silver prices shot up by nearly 25 per cent and 80 per cent in 2010, respectively. Traders feel the prices of precious metals will continue to surge this year.
Certification by global agencies such as the Gemological Institute Of America and International Gemological Institute have created a boost in consumer appeal.
Consumers have started aggressively looking at diamond jewellery as an investment avenue, said Mehul Choksi, chairman of Gitanjali Gems Ltd.
C Vinod Hayagriv, chairman of the All India Gems and Jewellery Trade Federation, has urged the government to abolish wealth tax on gems and jewellery, as it is a very small amount and should not be applied for personal collections.
Gems, jewellery exports up 39%
Bloomberg adds: Gems and jewellery exports from India, the largest supplier, climbed 39 per cent in the April-January period, the Gem & Jewellery Export Promotion Council said. Shipments advanced to $30.6 billion from $22 billion a year earlier, the trade group said on its website, citing provisional estimates. Exports in January gained 23 per cent to $2.9 billion.
