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The roaring tiger and the flying dragon
India and China: The future of the Diamond Jewellery Industry
By: Diamond World News Service
Oct 1 2005 12:00AM
Reference: 100  


Rajiv Mehta, CEO was one of the distinguished speakers at the International Diamond Conference¡¦05 held at New York on 19th September ¡¦05. The presentation: "I am privileged to be here today. It is an honour for me to share this platform with some of the leading luminaries of our industry and I must thank the Rapaport Group for this opportunity. I have taken a cue from Martin¡¦s passionate appeal from last years conference asking us to share our ideas and add value to each other. Martin, your inspiration of last year has resulted in my presentation on the 2 most important markets for our industry that are emerging, yet still are a mystery to all of us.
As most people see the world today, they see the tiger threatened with extinction and the flying dragon, a myth. Why then have I titled my presentation: The Roaring Tiger and the Flying Dragon? The reason is in the context of the Diamond Jewellery Industry, India has become a roaring tiger and China has taken wings.

Market dynamics
World diamond jewellery sales have increased from 4% in 2003 to 7% in 2004. Will this trend continue? Why do I say this? The US and Japan are traditionally the biggest players in the Diamond Jewellery industry. Today, they are both plagued with problems. Rising Interest rates, restrained household spending, high energy costs plague the US whilst deflation, declining asset values and weakening exports mark the problems faced by Japan. This is not an encouraging sign for the Diamond Jewellery market, which has always had a high correlation with economic growth. Conversely, a whole new pattern in terms of consumption and trade is emerging. The leaders of this are India and China. Together they are home to 40% of the world¡¦s population. Individually, they are the world¡¦s fastest growing economies.

But what accounts for India¡¦s growth rate? Let¡¦s look at the facts:

ƒÜ FACT: Investment and credit reforms have unleashed a new level of global confidence in the country¡¦s economy.

Ć FACT: Strong domestic demand

Ć FACT: A booming industrial sector and higher disposable incomes have expanded the retail market.

A direct beneficiary seems to be the jewellery market; add to that the shift from gold to gemstones and you have the fastest growing market of diamond jewellery in the world, with retail growth rates of over 20% per annum. On the other hand, India¡¦s share of the world¡¦s polished wholesale diamond market is estimated at 60% in terms of value and 85% in terms."

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