As the sun sets on 2016, a ray of hope streaks
across the diamond industry, bogged down by
diminishing demand and tighter profit margins
across the spectrum of luxury products, over the last
few years. But better sales and steady prices, witnessed
through 2016, brings a promise of rising revenues and
never having to look back. Are there any magical out of
the box mantras, to boost the luxury industry in 2017?
Aasha Gulrajani Swarup finds out.
Hope springs in winter. In the last few years,
the luxury industry has witnessed the dance
of death-- one step forward, two steps back
-- treading through a landmine of economic emergencies,
be it decline in demand, loaded inventories,
drop in prices, business bankruptcies, or even
a severe credit crunch, and survived. Finally, by the
autumn of 2016, prices have ruled steady and diamond
sales revenue has climbed cautiously. But,
even as the ghosts of a financial crunch still haunt
luxury players, clearly, only those who can perform
the exorcism shall prevail.
“The luxury market has been
suffering for the past two years.
The strong U.S. dollar, strong
crackdown in China against
gifting, sanctions in Russia and
low oil prices, are the reasons for
the slowdown in luxury. But, once
we reach a certain low point, the
only place we can go is up. We hit
this low point in 2015,” recalls Ramesh Barmecha,
President, Niru group.
Truly, there are indications that the diamond
industry is on a rebound. The recently released
annual Global Report on the Diamond Industry,
2016, prepared by the Antwerp World Diamond
Centre (AWDC) and Bain & Company, accounts
growth of around 20 per cent in rough diamond
sales during the first half of 2016. (See Report
as Box Item). The report also predicts a positive
outlook for the diamond market, with demand for
roughs expected to recover and return to a long
term growth trajectory. Major producers have
experienced the glimmer of hope.
“We’ve seen significant improvements in rough
diamond demand in 2016 compared with 2015.
There is a steady, solid recovery. We anticipate a
good year for the industry in 2017, even though
there is some uncertainty,” informs Lynette Gould,
spokesperson for De Beers, the diamond producers.
The Game Plan
While the luxury industry may be gearing up for
clinking cash registers, there is a word of caution.
The rules of the game are changing. As Gould states:
The industry needs to continue to focus on greater
financial transparency, enhanced professionalism
and stimulating consumer demand – all of which
are vital for maximising opportunities over the
Is it a perform or perish
situation? “The luxury industry
is reaching a point of no return,
wherein brands that cannot
pivot their market positioning to
capitalize on emerging customer
groups, will likely fall short of
their goals, and companies that
are willing to innovate rapidly in
order to reach these new markets, will see more
success,” predicts Caylee M. Kozak, fine jewellery
worker and industry writer
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