Young Indians drive diamond jewellery sales

Mumbai: Young Indians, under the age of 35 also popularly known as millennials, have emerged as one of the most important consumer segments buying diamond jewellery in India accounting for close to half of the sectors overall revenues showing that the sparkling stone has not lost its sheen among the youth who are also known to spend a lot more on everything from fancy gadgets to vacations.

This is higher than the cumulative total of the top four diamond jewellery markets of the US, China, India and Japan, which account for 73% of global demand, the potential diamond-buying millennial market is more than 220 million people, 39% of the diamond buying population in these four countries in 2015, said mine owner De Beers in The Diamond Insight report 2016, an annual publication in its third year.

Meanwhile, the overall market has lost some of it sparkle.

In India the market saw sales decline, even in China it grew at a slower rate pulling down the value of the global diamond jewellery sales.

Global diamond sales to consumers in 2015 reached an estimated $79 billion—down from $81 billion in 2014, or a 2% decline. This contrasted with positive growth of 3% in 2014, said the report adding that at constant exchange rates, global demand for diamond jewellery grew by some 2% in 2015.

In India, the market decline was driven by a more restricted consumer credit environment and overall weakness in consumer spending.

India accounts for 7% of the global demand for polished diamonds and is the fourth largest market globally after the US, Japan and China, said the report.

However, the millennials spent nearly $26 billion on diamond jewellery in the largest four markets combined, representing 45% of the total retail value of new diamond jewellery acquired in these markets.

The gold to diamond shift in India is been happening for a while. For instance, jewellery retailer Gitanjali Gems Ltd, that owns brands such as Asmi, Ddamas, Nakshatra and Gili, used to get 60% of its revenues from gold and 40% from diamond in financial year 2012.

Now in fiscal 2016 diamonds account for 70% of its revenues and gold is 30%, said Mehul Choksi, chairman and managing director, Gitanjali Gems, who made the conscious shift to selling more of the precious stone over the years.

“Gold is rooted in culture and represents a collective mindset whereas, diamond is more about the individual and personal taste,” said Santosh Desai, managing director, Future Berands Ltd who also is a columnist, media critic and the author of ‘Mother Pious Lady:

Making Sense of Everyday India while explaining that as a society we are seeing a shift towards an increasing spend on categories that are about personal consumption than display like luxury, eating out and travel.

As such the youth below the age of 35 account for 50% of electronic retail chain Croma’s overall revenues. “The younger customer spends a lot more on personal consumption,” said Ritesh Ghosal, chief marketing officer, Croma, operated by Infiniti Retail Ltd, a unit of Tata Sons Ltd while explaining that this means that they will spend a higher proportion of their income on mobile phones and also change it more often than the older consumer.

However they may not buy the most expensive phone as their propensity to spend is lesser than that of the older consumer.

Likewise for fine dining. “Youth account for 40% of the sector’s revenues,” according to the National Restaurant Association of India report 2016.

This is true for travel as well. Young Indians in the age group of age group of 18-35 years account for 66% of the total trips made on Makemytrip.com , a travel portal, said a September report from the company.