Subhash Choudhary, a middle class serviceman with a private firm in Mumbai, was a worried man until he met with an official of the city’s renowned diamond jewellery company last Saturday.
With a budget of Rs 150,000, Choudhary wanted to buy gold jewellery earlier. But, he changed his mind. Now, he is willing to buy branded diamond jewellery from any organised retail stores or a set of “seasonal collection” from well known designer.
Many consumers like Choudhary change their mind when they visit diamond jewellery stores. That is the reason, Indian gems and jewellery industry bounced back when other industries in India and overseas continue to struggle to overcome global economic downturn in 2008, said Rajiv Jain, chairman of Gems & Jewellery Exports Promotion Council (GJEPC) and managing director of Jaipur-based Sambhav Gems Ltd.
The biggest reason for the change in consumers’ mindset is the lack of gold’s standardisation. On his recent visit to a shop in the nearby vicinity, Choudhary was disappointed with the response from a gold jeweller who categorically rejected to recognise the jewellery as “gold” which was bought from his family jeweller in native place a couple of years ago.
Since, hallmarking was not made mandatory in India, jewellers do not accompany any certificates with jewellery items and most of the business is done purely on trust between jewellers and consumers in remote Indian cities.
In big cities, however, organised retails have changed consumers’ mindset drastically in the last couple of years. Organised retail offers various choices of design, cut and polish which allure consumers more. As a consequence, modern means of jewellery sales are gradually taking over businesses of traditional jewellers, said Mehul Choksi, chairman of Gitanjali Gems, which has witnessed over 40 per cent growth in branded jewellery sales last year.
Consumers’ tastes have changed from more of classic design for occasional wearing and store value to sophisticated modern design for “one jewellery for all occasions.” Unlike limited and mostly age old designs by inherent family jewellers, the modern branded retail chains offer jewellery for every occasions. Therefore, most of footfalls in Monday’s branded retails gets converted into a customer for long life, said an official with the country’s largest jewellery retailer, Tanishq.
As a consequence, global organised retails which contributes 15 per cent of $80-billion overall jewellery sales have been growing at 35-40 per cent against the family jewellers’ growth rate between 5-10 per cent.
The country’s renowned jewellery designers like Varuna D Jani have been presenting “seasonal collections” for the last several years at affordable price. After a tremendous success of her last year’s VOW (very own wish) - a multi-purpose jewellery collection which allows customers to use one jewellery on various “live” occasions with a price above Rs 100,000, Varuna is introducing slightly smaller “V Rock” collection for forthcoming wedding season. With an entry price of Rs 25,000 per collection, the jewellery is wearable for multi-occasions, said Varuna.
But, family jewellers are not going to die, said Binita Cooper, managing director of the recently launched Forevermark jewellery brand from London-based De Beers.
The diamond studded jewellery accompanies now a buyback guarantee with 90 per cent of resale value. In order to gain customers’ reliability, the jeweller is also offering certificates of purity of precious stones and metals. Hence, diamond jewellery which was used earlier to feel as confined to populous people is now an investment option for customers to cash in on when needed.
Diamond jewellery industry has grown 30 per cent, faster than expected, in the calendar year 2010 as consumers are lured now to use items as both luxury fashion and investment options. These two reasons for diamond jewellery buying coming together is a win-win situation for jewellers and consumers both. The industry is set to continue its growth momentum this year as well, said Stephen Lussier, CEO of Forevermark.
Certification by global agencies like Gemological Institute Of America (GIA) and International Gemological Institute (IGI) have also helped create a unique thrust among consumers with massive boost in appeal. Hence, consumers accepted diamond as a commodity for fashion use and value of investment in future.
More than the certification, it is designs, shopping experience and brand image of the company that are winning consumers’ confidence successfully, Tanishq official added.
