India is riding the wave of growth with retailers aggressively expanding their operations.
The country is the one positive story fueling demand in the diamond industry currently as new stores are opening primarily in tier 2 and tier 3 cities.
The opportunity lies in economic growth as the country is enjoying a boom period amid a reawakening of its services and manufacturing sectors. More jobs mean rising average income and a growing middle class, which leads to an increase in discretionary spending.
Jewelry is bound to benefit in such an environment, given the strong traditions and perceptions of gold among the population. The desire for diamonds among younger consumers is on the rise as they seek fashionable jewelry for everyday wear.
The result is that India is expected to overtake China as the second-largest market for diamond jewelry, if it hasn’t already.
As jewelers open new stores, they require inventory to fill those display cabinets. It should be a boon for the diamond trade. That provides small compensation for the drop in exports for those diamantaires positioned to capitalize on the rise of domestic demand, though not everyone can do so.
Still, India‘s retail space is bucking the global trend in the diamond and jewelry market. It serves as a reminder of the core fundamentals that move the industry forward; that in an upward-trending economy, diamonds are an aspirational and desirable product.
Read my full analysis published by Rapaport here.
Image: David Polak / Midjourney, via Rapaport
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