According to analysts’ estimates, the jewelry market in Russia continued its steady rise in recent years. Meanwhile the global jewelry sales were moving up 4.6% a year, Russia was flaunting an annual growth rate of 25 - 30%, according to the data provided by Inventica, a research company. In the first place, this was due to increased income of the typical Russian wage earner. Jewelry ceased to be unaffordable luxury for many people and moved to the category of ordinary goods.
By the estimates of DISCOVERY Research Group, the Russian jewelry retail market reached $4 billion last year. Moscow accounts for about 40% of sales. This is the legal market capacity, i.e. the sales of officially registered jewelry. According to experts, illegal sales of smuggled jewelry reach a similar amount.
In 2008, jewelry retail sales in Russia may go up 7.5% to $5 billion. This was reported by Pavel Sidorenko, Marketing Director of Adamas, at the Adam Smith Institute Forum in his analysis of the Russian market situation. According to him, the market volume in 2007 was $4.65 billion compared with $3.72 billion in 2006. Pavel Sidorenko noted that, in future Povolzhje (Russian provinces along the Volga River) and the Russian South would turn into market leaders putting Moscow in the shade. One-half of the total retail sales belong to jewelry worth $180-800.

As a whole, discrete data of regional statistics confirm the picture. Thus, jewelry sales in Yekaterinburg last year went up by 40%. General managers of jewelry stores believe that such positive progress is stipulated by increased purchasing capacity of the city’s population. Besides, jewelry makers of the Middle Urals are winning recognition across Russia due to specialized exhibitions. Natalya Firstova, Deputy Chairman of the Municipal Committee for Commodities Market, told to Uralinformbureau that in 2007 the Urals jewelry supplied to the Russian domestic market exceeded 1,730,000 jewelry pieces.
“It was not once that I asked myself whether our population was so rich,” said Raissa Cheberyak, Chief of Department for Consumer Market and Entrepreneurship in the Smolensk Administration. “Before we had only the Rubin Jewelry Company here, and there was enough jewelry for everyone. Now the number of jewelry outlets exceeds 20, and no one is in the red.  If there is demand, it will be met by supply.”
Wonton growth is also observed in the premium segment of the market.
Whereas luxury consumption everywhere in the world is gradually shrinking, in Russia it is invariably moving uphill, says the Sekret Firmy Weekly. According to Magram Market Research, the Russian luxury market is growing at a pace of 30-40% a year and today amounts to $7-9 billion. According to the data provided by Nielsen, this country is already a world leader in buying goods sold by the Chanel and Prada brands. Besides, every third Russian confessed in a survey that would purchase a Gucci if it were within his or her price range.
As it was pointed out earlier, a good number of wealthy Russians go abroad for their jewelry shopping. It was curious in this context to read the testimony of Design Week, a British edition, whose article entitled “While recession is growing in the U.S., Britain faces a luxury consumption boom” was published by Diamonds.net last March. Whereas recession is throwing suspicion on some economy sectors, business seems to be brisk in the upper price segment of the consumption market. Sir Stuart Rose, CEO of Marks & Spencer, said that last month “the West End could not get enough diamonds.” Trendwatching.com monitoring demand trends called 2008 “the year of premiumization.” 
The edition does not take the trouble to explain the reasons of well-being in the British luxury sector so different from the U.S. scene.  However, they are pointed out by Guardian cited by NewsRu.Com, a Russian web site, “Luxury purchases by well-heeled buyers from Russia and the Middle East last month (February) increased profits of London’s West End stores, whereas the rest of the country continued to go through consumption recession.” 
The statistic data collected by the New West End Company proved that in February London’s main trading area stores were visited by 5.1% of buyers more than in the similar period last year. Oxford Street alone saw its “attendance” grow by 7.8%.
This statistics – which shows only the number of buyers in stores and not the sales growth – is in contrast with national statistics, which says the number of buyers in stores has decreased by 4.7% compared with the last year.
The organization engaged in promoting retail trade in the West End says the increased number of tourist buyers from the Middle East and Russia resulted in luxury sales growth.
This February, the article says, one-of-a-kind apparel and jewelry products were particularly popular among a considerable number of foreign buyers, especially those from the Middle East and Russia.
Here let us once again give the floor to Design Week: “Consumers pay attention to exclusivity and brands with pronounced identity making them different from their competitors,” says Maureen Hinton, lead analyst for Verdict Research. Ian Caulder, Creative Director of Caulder Moore, a consultancy, agrees with her and notes that top brands have to focus on stressing their elitism and uniqueness, “True luxury implies something utterly rare. The importance of manual work is growing along with its inherent idea of absolute individuality of products made.”
Contradicting the consumption of widely known brands, there is a new trend on the rise – luxury for insiders, Sekret Firmy notes. This was the conclusion made by the McCann Erickson experts in the course of their research of Russian luxury consumers. “Money talks and wealth whispers. This is a style, which signals that a person is not simply rich, but very rich,” says Anton Molodtsov, Strategic Planning Director with McCann Erickson. “Instead of 18-year-old Martell, such people will prefer a product of some uncelebrated cognac house knowingly esteemed only by their clubby bonhomie.”
The urge of well-healed people to be indispensably among the elect elite is successfully exploited by all luxury brand founders to earn their monies - limited edition models are regularly issued by manufacturers of watches, jewelry, cars, mobile phones, etc., Sekret Firmy sums up.

Russian clients are actively taking part in Christie’s jewelry auctions, and this was eagerly discussed by Daphne Lingon, Christie’s Senior Vice President, with the correspondent of Pyatnitsa, a Vedomosty supplement: “The Russians love and value diamonds and particularly colour diamonds, and one should say they know a lot about the subject. At the same time, they buy jewelry dated back to the turn of the 19th-20th centuries, as well as historical jewelry pieces of famous brands - Bvlgari, Van Cleef & Arpels, and Harry Winston. And they do know which designers and jewelers were changed in these companies in the course of the whole 20th century!.. There are emerging some very educated clients, who begin to form fascinating collections. They can distinguish gems and work quality, they make account of history behind things and they are not attracted by large-size diamonds any more, but by adornments, which deserve attention.”

However, in general the consumption plans of Russian buyers this year look rather modest, sociologists affirm.
Thus, according to the All-Russian Public Opinion Research Center, less than 7% of Russians are going to buy luxury items (jewelry and antiques), while 68% do not plan any such purchases this year.
The consumption plans of Russians are evidently influenced by such things as inflation growth and increased prices for raw materials.
Along with the collapse of the stock market in early March 2008, the gold price exceeded $1,000 per ounce, Delovoy Petersburg says. Experts called this price level psychological: after it was reached, the market plunged into panic. Fuel to the fire was added by Russian Minister of Finance Aleksey Kudrin, who said that the VAT rate would be decreased. Alexander Badin, General Manager of OOO Karavayevskaya Yuvelirnaya Fabrica, says that almost all so popular one-kilo gold ingots are gone from banks.
“Today one can buy only 12-kilo ingots, but to do this you have to withdraw 9.5 million roubles from your turnover,” Alexander Badin says.
Gold shortage on the background of a sharp turnabout in prices for this precious metal affected the manufacturers, who were hindered in producing jewelry.
“In Petersburg, many small jewelry factories are idling from the end of February, while those large ones decreased their output. Many factories temporarily switched over to making silver ware,” says Alexander Nikolayev, President of the Saint Petersburg Jewelers’ Assembly, a non-for-profit partnership, and General Manager of OOO Firma Kaholong. According to him, total gold jewelry production in Saint Petersburg went down 30-40% during two months. In its turn, this resulted in higher prices for jewelry.
Totally, in 2007 Saint Petersburg produced nine tons of gold jewelry. The annual market capacity of the city is estimated at $500 million.
Now sales networks and boutiques, as Alexander Nikolayev assures, are withdrawing jewelry from their showcases for revaluation. “A similar situation was observed during the default of 1998,” General Manager of Kaholong recalls.
The forced decrease in output fell onto the period (end of February - beginning of March), when jewelers counted on extremely good sales of jewelry.
However, large producers do not share this pessimism. Sergey Dokuchayev, General Manager of OAO Russkiye Samotsvety, says that the recession problem in the field of production is tangy for small-scale enterprises, too weak to catch up with growing gold prices. The huge demand for gold is nursing favourable environment for shady turnover of jewelry. Now about 50% of products sold at the market are counterfeited.  Jewelry items bear false hallmarks and manufacturers’ nametags are forged.