Sales of platinum jewellery have been on the rise for a number of years, but none more so than in India. While US and European sales increased 11 per cent and 10 per cent respectively, the Indian market achieved a 35 per cent increase in the 2013/2014 financial year over the previous year.
More staggering is the fact that the Platinum Guild International (PGI) is forecasting a further 40 per cent increase for the 2014/2015 year.
According to PGI CEO James Courage, the European market was driven by strong UK sales and a return to stronger export sales for Swiss watches, whereas the buoyant results in India could largely be attributed to a new marketing strategy.
“India is our fastest developing market and it has really come off the back of a successful marketing campaign based around the concept of ‘Platinum Day of Love’. Interestingly, in India, most marriages are still arranged; so the family wedding is truly a “family” wedding, and it’s after the wedding that the couple falls in love.
“Our research identified this as the emotional occasion between the husband and the wife. So our campaign centres around falling in love after your wedding,” Courage told Jeweller.
India jewellery fair
The latest results were outlined by Courage while attending the India International Jewellery Show (IIJS) in Mumbai last month.
The PGI is the worldwide marketing organisation dedicated to creating, expanding and strengthening consumer and trade markets for platinum jewellery and, because of the success of the “Platinum Day of Love” campaign, the PGI will develop a new marketing program for 2015.
“Our ‘Platinum Day of Love’ had a very strong following in other social media and to build on that, we are looking to launch another campaign around the wedding next year. It’s been a short-long history [for PGI] if you like, in India. We started more than 10 years ago and we started from zero.
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“What’s been so positive about India is the way that we’ve worked very closely together with leading members of the manufacturing industry and the retail industry – they saw an opportunity to expand outside their traditional territory, and platinum offers the retailer a better margin than the other precious metals,” Courage said.
He also explained that although platinum was very popular with young consumers, it took time not only for that generation to feel comfortable about selecting platinum over the traditional gold wedding jewellery, but also to engage their parents.
“Many decisions in India, as they are in other places for expensive purchases, would involve a parent’s consent as well. We now feel that we’ve achieved a breakthrough in this important country, which coincided with really big changes taking place in India itself,” Courage said.
“The formal retail sector is growing very rapidly. There are lots of large new jewellery retail outlets coming about, and not just in the big cities, but also in the secondary cities. And that too opens up for them the opportunity to sell across the wider range of products than with traditional gold jewellery.”
Platinum versus gold
Courage said there were other reasons for the metal’s success.
“The [price] premium of platinum over gold is still relatively small. So for the retailer and the consumer it’s not such a stretch to reach for platinum. And it’s important that there is not too high a premium because that really engages the retailer in particular into looking at the opportunity that they can take from platinum.”
Courage explained that in markets such as China and India, the smaller price differential between platinum and gold meant that retailers could achieve a slightly better margin.
He added that while platinum was probably the fastest growing sector, it was, “Obviously off a much lower base than diamonds and gold, but positive in itself. I think driven by the fact that the gold and the platinum price were not far apart, means it’s very comfortable both for the retailer to sell to, and for the consumer to buy – they can see the value in purchasing platinum.”
Courage acknowldeged, however, that platinum had less than 2 per cent of the Indian gold market – which has been affected in recent times by political issues surrounding gold duty.
According to the Gems and Jewellery Export Promotion Council (GJEPC), the shipment of gold jewellery declined from Indian Special Economic Zones by 28.78 per cent for the period between April and June.
India is reported to be one of the top three gold jewellery-exporting countries in the world.
Interestingly, according to PGI data, in 2000 only two platinum jewellery manufacturers operated in India and there were only 15 platinum jewellery retailers nationally; however, that has now increased to 15 platinum manufacturers and the number of retail stockists is now approaching 900.
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Research conducted by PGI acknowledged that the white metal was unlikely to supplant gold entirely. Nonetheless, it did find that India had become the world’s fourth largest platinum jewellery market in terms of consumption globally, and that there is an unprecedented demand for platinum men’s jewellery, especially for upper middle class men in the age group of 25-40 years.
Exhibitors reasonably happy
While the IIJS organisers were expecting brisk trade at the 31st edition of the Mumbai trade fair, many diamond dealers said orders were in line with expectations.
Pankaj Parekh, vice chairman of the GJEPC said, “People were waiting for a [gold] duty reduction to be announced, and when it did not happen, people accepted the situation.”
The Indian trade had urged a cut in the gold import duty, but the new government of Narendra Modi has left it unchanged at 10 per cent with the suggestion that once retailers understood that Indian authorities had decided to leave the gold import duty unchanged they would resume purchases of gold jewellery.
This year’s five-day event was expected to match previous year’s results with around 35,000 visitors and more than 850 exhibitors.
Prior to the trade show, the India International Jewellery Week (IIJW), a four-day consumer-focused event, took place and was once again a very successful.
The IIJW is a continuous catwalk style show combining jewellery and fashion, and of course Bollywood stars. Even though the venue seats well in excess of 1,000, it has become so popular that the final presentation – The Best of the Best – runs twice on the final night to cater for the demand for tickets.
Both the IIJS and IIJW are organised by the GJEPC which is an Indian apex body representing 5,300 gemstone and jewellery members. Established in 1966, it operates under the supervision of the Ministry of Commerce & Industry, Government of India.
* The author attended the IIJS courtesy of the fair organisers.