ALROSA, which released the results of its global luxury and jewellery market study, said that in Q2 of 2018, sales of “decorative jewellery” increased in all of the world’s key regions, except for India. “The average global growth rate was some 5% higher than during the same period last year,” ALROSA said.
Bucking the average rate, Asia Pacific registered a growth as high as 17%. “The positive dynamics resulted from the continuing expansion of various local players, made possible by the mounting demand for diamond-based jewellery in continental China,” the Company said. “Another factor that made sales more stable was the improvement of tourist traffic in Hong Kong and Macao.”
In North America, Europe, and Japan, also key regions for the sector, sales increases fluctuated between 3% and 5%. “It bears pointing out that the rise of diamond jewellery sales in North America and Japan (+5% and +3% respectively) has been accompanied by significant demand spikes among the local population, which drive most of the sales,” ALROSA remarked.
However, In India, jewellery sales have decreased in dollar terms. ALROSA opined that this is because “major Indian players are focusing most of their effort on restoring their reputation and regaining the customers’ trust and confidence that the jewellery they buy is genuine”.
“Furthermore, Indian sales dropped due to the new Goods and Service Tax (GST), introduced in July 2017,” the study found. “The tax created a high base effect when making a comparison between the corresponding periods this year and the year before.”
Dmitry Klimenko, head of the analytics department at ALROSA’s Strategic Projects and Analytics Center commented: “Today, the shares of the Indian market are being redistributed among the stakeholders, with large retailers encroaching upon their smaller competitors. Nevertheless, despite all of the major players’ efforts, most sales are still ensured by smaller retailers.”
ALROSA noted that overall, the luxury commodities market is experiencing “positive dynamics”. The Company said that the Q2 of 2018 figures show that, in terms of monetary value, worldwide sales of luxury items have increased by 11% if compared to the corresponding period last year.
The highest growth rate has been exhibited by the Asia Pacific countries (including South East Asia and India) where the sales of luxury commodities increased by 19%.
Sales in Europe, Japan, and America have also shown significant improvement (+10%, +9%, and +5% respectively). The figures for America include the sales of jewellery in North America and the sales of luxury items in North and South America.
Klimenko summarised the study saying: “When finalising our analysis, we discovered that the sales of diamond-based decorative jewellery are continuing their upward trend. In some countries, we are seeing the rise of the omnichannel sales model, as people are showing increasing preference towards buying jewellery and other luxuries over the Internet.”
He also pointed out that the weakening of national currencies versus the US dollar, typical of Q2 this year, may have had a negative impact on the consumers’ purchasing power, as well as affected tourist flows.
News Source: gjepc.org