The diamond business is yet bright and has a good future in the coming days

Hitesh Patel, Managing Director of Dharmanandan Diamonds Pvt. Ltd., joined the family business in 1997 to help his father Laljibhai Patel, the founder of Dharmanandan Diamonds Pvt. Ltd. Egged on by its success, Hitesh set up the overseas presence of...


The talk around LGDs is all hype

As a teenager, Luca Luterbacher began to design and manufacture single pieces and individual items for wealthy private family friends from Switzerland and Lichtenstein. In 2017, he finally invested in his own luxury trademark "Luterbacher."...

12 august 2019

Correct adjustment of advertising is the major challenge

At the recent Amberforum held in the Baltic city of Svetlogorsk, Andrey Yanchevsky, Head of the trade representation of the LA VIVION jewelery company shared his opinion with the correspondent of Rough&Polished on the state and prospects of the jewellery...

05 august 2019

Small-scale diamond mining is the future in Botswana – Leon Daniels

Pangolin Diamonds, which is currently the most active diamond exploration company in Botswana, has called upon authorities in the southern African country to include diamonds into the minerals permit for small scale mining operations. Pangolin chief...

29 july 2019

“There has been a strict policy in Israel against LGDs; have been forbidden on IDE trading floor for years.”: Aviel Elia, Managing Director- IDI

Aviel Elia, an attorney by profession, has served as Legal Adviser and Company Secretary of IDI since 2013. As a key member of the Israel Diamond Institute (IDI) management team, he has been involved in developing company strategy and negotiating...

22 july 2019

China: The ever-growing jewellery market

08 june 2015

China’s ever-growing jewellery market is an enigma as the variety, design, raw materials are varied and do not follow a pattern as in other consumer markets. Being the second largest jewellery market in the world, next only to the USA, the Chinese jewellery market has witnessed consistent growth in the past decade, with occasional ‘hiccups’ on the way.

According to the National Bureau of Statistics figures, demand for jewellery in China has grown in leaps and bounds in recent years. During the years 2003-2008, the average annual increase in sales in the wholesale and retail sector indicated a high of 30% and more. However, in year 2012, due to a slowdown in the macro economy, a slide was evident in retail sales, with growth in retail sales registering just about 16 %.

In April 2013 however, due to a fall in gold prices, the retails sales bounced back and registered a high exceeding 72%. But the annual jewellery sales for year 2013 showed an increase of just 25.8%. For the year 2014, as a result of rapid growth in 2013, retail sales of jewellery recorded a 4.6% drop between January and August 2014.

Currently, the Chinese market offers wide varieties of jewellery similar to the Indian domestic market. Different kinds of metals are used in jewellery making such as gold, platinum and silver, which are high demand due to their return on investment value. Platinum jewellery, gold jewellery, silver jewellery and alloy gold jewellery are more popular in China – very much like in the Indian market. It is obvious that non-precious metal jewellery compared with precious metal jewellery may not be good investment vehicles, but jewellery made from non-precious metals like copper and aluminium makes a good value for money, too, as well as popular for trendy fashionable designs. Imitation jewellery made from materials similar to precious metals in appearance has a good market in China, again a similarity shared by the Indian domestic market. Though this kind of jewellery does not contain any precious metals, it has gained wide popularity due to its stable colour, low price and high decorative value.

Understanding the potential of the Chinese market, Rio Tinto and De Beers have taken all steps to capitalise on this world’s fastest growing market for diamonds. Since 2010, local retailers, manufacturers and designers have been helped by Rio Tinto to use its Argyle diamonds to fuel the growing consumer trend for fashion accessories, thereby creating new opportunities for diamond purchasing. In the beginning of 2015, Rio Tinto introduced diamond fashion jewellery as they saw incredible results in a short period in the sales growth experienced by their partners retailing the product, as well as in terms of level of interest from the trade.

De Beers, too, noted that China was also a significant driver of global growth as in year 2014 demand increasing six percent to a total of $10 billion. Though this was below the growth rate in 2013, the figure indicated that it represented a substantial increase as the consumption base has grown so rapidly in recent years.

The Chinese population is said to be the world’s top spenders as of today. According to a Bank of America Merrill Lynch global research report, China is leading in money spent on self-indulgence and enhancement of appearance and prestige, driving the rapid growth of global vanity consumption. The Bank said that the ‘vanity capital’ market in the ‘Greater China’ region, Hong Kong and Taiwan but not Macau, showed an annual growth rate of 15.6 per cent, topping the world in the past five years.

The World Gold Council (WGC) reported that China’s jewellery demand fell 33 percent to 623.5 tonnes in 2014 as consumers and investors took time to digest the substantial volumes accumulated in 2013. Macau’s jewellery industry saw rapid expansion in recent years as the city-state’s thriving gaming and tourism sectors continued to attract affluent Chinese tourists. Foreign travelers shopping for gold jewellery as well as Macau residents with more disposable income who bought jewellery for themselves or as gifts were the driving force for the growth. Results of a recent industry research revealed that local goldsmiths and jewelers enjoyed tremendous success from a surge in demand for bridal jewellery, fuelled by a gold rush two years ago. But the boom may be short-lived if Macau does not implement critical changes.

Meanwhile, of late it is said that tourists from mainland China are ditching Hong Kong as travel and shopping destination, resulting in a major sales slump for jewelers across Hong Kong. Retail majors like Emperor Watch & Jewellery Ltd. witnessed a decline of 40% in its season sale and the full year sales decline of 30%. Its competitor, Chow Tai Fook (world’s largest jewelry retailer), which depends on around 60% of its HK sales from mainland Chinese shoppers, is also about to register a 30-percent sales decline. Similar results are also expected at Luk Fook Holdings International Ltd.

Following the negative sentiments, there was a drop of 80% in tour group from mainland China coming to HK, who are now interested in visiting new destinations including Japan and South Korea. The recently released Credit Suisse report has cut the growth forecast for Hong Kong economy from 2.4% to 1.6%, suggesting that any retail revival in HK is not around the corner. Despite the recently concluded 32nd HKTDC Hong Kong International Jewellery Show 2015, jewellery retail sales in HK have failed to pick up. If this situation continues, the retail slump will develop into a major problem for Hong Kong Jewellers, according to reports.

According to WGC, higher-margin products are gaining popularity within China’s jewellery market. Gem-set and, more notably, 18-carat gold items were immensely popular. The lower carat jewellery were particularly popular among the younger generation, as it is all over the world. This trend will continue and will augur well for the sector, leading to further scope in 2015.

WGC also reported that China’s jewellery demand fell to 623.5 tonnes in year 2014, a decrease of almost 33 percent, because consumers and investors took time to digest the substantial volumes accumulated in year 2013. It added that the continued government crackdown on corruption was also a contributing factor in weakening jewellery demand.

The latest statistics shows the market in China slowly improving with retail sales of gold, silver and jewellery posting a year-on-year increase of 19.3 percent to RMB25.8 billion ($4.15 billion) in March 2015.

Data from the National Bureau of Statistics of China also showed this sector reached $13.2 billion in sales from January to March, up 3.6 percent from a year earlier. Last year’s gold, silver and jewellery retail sales were $47.8 billion compared with $47.5 billion in 2013.

Aruna Gaitonde, Editor-in-Chief of the Indian Bureau, Rough&Polished