Platinum Jewellery mixes in with the big boys

The up and coming diamond and platinum jewellery industry is looking likely to usurp the old, traditional gold jewellery. Platinum jewellery is increasing becoming attractive to high end consumers around the world; also helped by rising disposable income in many high growth countries.

Historically, gold has held the leading position in most of the jewellery markets worldwide mainly due to the value and tradability factor associated with it. Though the total consumption of plain gold jewellery decreased in volume terms, the overall sales of gold recorded gain in value term, according to a paper by Koncept Analytics based in Uttar Pradesh, India. This is no doubt primarily due to the ever increasing value of gold stocks. However, platinum jewellery retailers have seen a huge increase in their market share without an extravagant rise in stock prices.

Diamond, gold and platinum are the three main product segments within the jewellery world, which collectively account for approximately 95% of the global retail sales in value terms.

The past decade has witnessed the global gem and jewellery industry undergoing some significant changes and registering strong growth, on account of increasing income as well as demand from the emerging economies across the world. Among the various types of jewellery, plain diamond jewellery accounts for the largest share of the global jewellery market, followed by plain gold jewellery. An interesting newcomer is platinum jewellery, particularly platinum wedding rings, which has seen a recent rise in sales and is ever becoming a strong competitor in the industry.

Diamonds is one of the major natural resources in the world and is used in both jewellery and industrial applications. There has been significant growth in the demand for diamond-studded jewellery. This has been due to many reasons, one being the improving economy in the key diamond jewellery consuming countries and the vigorous marketing efforts of diamond companies. The major changes witnessed by the diamond industry in the recent years include rising demand for synthetic diamonds, as well as significant developments in the entire value chain process like consolidation, re-structuring of diamond processing, local benefaction, among others.

In the meantime, the demand for platinum jewellery has also increased in the recent past, not only in the developed markets of the US and Europe, but also in the emerging markets like China and India, due to the ‘elite’ tag and ‘high-end’ value attached to the metal. This has led to a greater production volume of platinum rings and platinum jewellery.

A geographic segmentation shows the US as the largest consumer for gems and platinum jewellery, followed by China/ India, the Middle East and Japan. In the European region, the UK and Italy are the largest consumers, with the former also being one of the world’s largest jewellery fabrication centres. The UK also has presence of some large retailers, such as the Platinum Ring Company, who also operate an extensive e-commerce platform.

The emerging markets (like China and India) that are traditional jewellery centres are showing signs of becoming the largest consumption markets by 2015, for both traditional as well as branded jewellery. The growth in the demand for gems and jewellery is attributed to the burgeoning middle and rich-class as well as the improving living standards. This is likely to increase the sales of platinum jewellery in these countries, which will also have a knock-on global effect. Nevertheless, the industry continues to face problems due to competition from other luxury goods, as well as socio-ethical issues.

On the whole though, most reports analysing the trends and challenges of the gem and jewellery outline the opportunities driving the present as well as future industry growth. The industry reports also focus on retail jewellery sales, trends, jewellery segments future potential of the four large consumers of jewellery – the US, China, India and the UK. As a whole, the future is looking good for gold and diamond jewellery, as well as the new player in the market – platinum jewellery.