Diamond jewelry retail to decline in 2019
According to the latest Report, The Global Diamond Industry 2019 focuses on Diamond jewelry retail. Further the report says, the global personal luxury goods market, the bellwether of the diamond jewelry industry, experienced slower growth in 2018 and 2019.
The slump was caused by moderating global GDP growth, lower consumer confidence. Global diamond jewelry retail posted 2% sales growth in 2018, but sales are expected to decline by up to 2% in 2019, based on the results of the first three quarters.
A strong holiday season could reverse the trend:
In 2019, US diamond jewelry retail sales are expected to fall 2%, in contrast to 3% growth in 2018. There are three key reasons for the reversal. First, consumer confidence fell to its lowest point since 2016 because of uncertainties surrounding the labor market, trade tension and a possible recession.
Second, a continuous decline in Chinese travelers to the US lowered luxury purchases overall. And third, an extra 15% tariff on Chinese jewelry went into effect in September 2019 and could impact sales during the crucial holiday season.
In 2018, the Chinese market, including Hong Kong, grew 4% in 2019, that trend reversed; the Chinese market is expected to decrease by 5% in US dollars equivalent and 1% in local currency. The shift is attributed to Yuan depreciation, declining consumer confidence stemming from trade tension between the US and China, and significantly lower sales in Hong Kong amid protests in the area.
The decrease will be partially offset by growth in local consumption in Mainland China. A repatriation trend is being driven by import duty reductions, stricter gray market control and price harmonization among international retailers.
The Indian diamond jewelry Market declined by 1% in 2018:
Following rupee depreciation and the bankruptcy of large jewelry retailer Gitanjali in India in 2019, sales are expected to return to healthy 3% growth due to increased customer confidence, a growing population of working women and a shift in preference from occasion-only to everyday jewelry. However, retail sales are being reined in by tighter tax controls for luxury spending, a spike in gold prices and continuing rupee depreciation.
In 2019, performance in Europe was negatively affected by socio political turmoil in the UK and France, but this was partially offset by higher tourism spending in the Eurozone. Japan is expected to remain stable in 2019 because of lower consumer confidence and decreased spending by Chinese tourists.
The midterm outlook for 2019–20 remains uncertain given continued geopolitical instability, strong signs of an impending recession and limited marketing support, especially for non-branded and lower-end jewelry. The branded luxury diamond jewelry segment, which accounts for about 15% of the total diamond jewelry market, is expected to perform well, growing at high single digits. That is in line with the growth of personal luxury goods.
The Global Diamond Industry 2019, the work was commissioned by AWDC and prepared by Bain & Company and AWDC.
