When the Diamond Producers’ Association(DPA) upped their budget to $60 mn recently for generic promotion of diamonds and diamond jewellery, confidence seemed to return to the global diamond industry. DPA’s choice of US, China & India, the world’s leading diamond consumer markets, to begin promotional activities was also well received.
A major portion of the funds was earmarked for the US market and rightly so as it is the biggest consumer market. With millennials and women, in general, had to be weaned away from other distractions, major efforts are being made in terms of advertisements.
China and India are also in focus and DPA has all plans in place, roping in a top agency to launch the marketing campaign ‘Real is Rare‘ in both the countries to boost the diamond jewelry consumer demand.
In China, consumers were moving away from diamond jewellery to expensive luxury holidays, which was hitting the sales adversely.
In India too, consumers of diamond jewellery were affected due to demonetization, fluctuating currency rates etc. Consumer demand for diamond jewellery in India dipped sharply by 8.8% to around $2856 mn in 2016 from $ 3157 mn in 2015.
As millennials are the main target, DPA plans to focus on India as 1.2 bn are under 30 years as per the 2011 census. While marketing strategies are being worked out by DPA, the Gem & Jewellery Export Promotion Council of India (GJEPC) has pledged to contribute $2 mn for jewellery promotion in India.
In addition, De Beers’ recent plan to spend $140 mn on its own branded jewellery in US, China & India can be looked at as a good move. Because, it comes at a time when DPA also would spend $200 mn, and help in boosting diamond industry’s generic diamond promotions.
Currently, the retail market, in most of the diamond consuming countries, offers many distractions which makes it imperative to think of some forceful promotional activities to boost retail demand as well as ensuring that diamonds become an important aspirational product to buy in the minds of women and millennials.
The Chinese market, according to studies, reveals that the new Gen-Z and millennials are mostly moving away from being attracted to traditional luxury items like jewels, bags and even fancy cars. Instead, the new trend is towards ‘experiences’, like luxury travel to exotic places around the world. In fact, luxury travel in China is the fastest-growing competitor to diamonds/high-end jewellery, so much so that outbound travelers grew 6 percent to last year, recording about $11 bn in their spend – an increase of 12 percent from the previous year.
But, it is China which is the next biggest growth hub in the diamond jewellery sector. Studies show that jewellery demand from Chinese consumers has increased 12 percent over the past decade to reach $9.7 bn in 2016. Following China, it is the Indian domestic market that has been growing exponentially in recent times – an opportunity to tap profitably by increasing generic promotions across the country.