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Springing On the Sparkle
Diamond Industry Action Plan 2017
By: Diamond World News Service
Dec 27 2016 12:33PM
Reference: 13739  

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.

Growth Sighted

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 longer term.

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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