Russian diamond miner ALROSA recently published the results of its global luxury and jewelry market research, showing that the average global growth rate for decorative jewelry in Q2 2018 was approximately 5% higher than during the same period last year. Sales increased in all of the world's key regions, except for India. The most notable increase came from the Asia Pacific region, where sales increased by 17%. The positive dynamics resulted from the continuing expansion of various local players, made possible by the strong demand for diamond-based jewelry in continental China. Another factor that made sales more stable was the improvement of tourist traffic in Hong Kong and Macao.
In other key regions (North America, Europe, and Japan), sales increases fluctuated between 3% and 5%. It bears pointing out that the rise of diamond jewelry sales in North America and Japan (+5% and +3% respectively) has been accompanied by significant demand spikes among the local population, which drove most of the sales. Meanwhile, jewelry sales (in dollar terms) in India have declined, as major Indian players are currently focusing most of their effort on restoring their reputation and regaining customers' trust and confidence that the jewelry they buy is genuine. The new Goods and Service Tax (GST), introduced in July 2017, also impacted sales in India. The GST created a high base effect when making a comparison between the corresponding periods this year and the year before. Dmitry Klimenko, head of the analytics department at ALROSA's Strategic Projects and Analytics Center notes that smaller retailers are still responsible for the bulk of Indian sales, despite large retailers encroaching on their smaller competitors.
Overall, the luxury commodities market is experiencing positive dynamics. The figures of Q2 of 2018 show that, in terms of monetary value, worldwide sales of luxury items have increased by 11% compared to the corresponding period last year. The highest growth rate has been exhibited by the Asia Pacific countries (this includes South East Asia and India), where sales of luxury commodities increased by 19%. Sales in Europe, Japan, and America (sales of jewelry in North America and sales of luxury items in North and South America) have also shown significant improvement (+10%, +9%, and +5% respectively). "When finalizing our analysis, we discovered that the sales of diamond-based decorative jewelry are continuing their upward trend. In some countries, we are seeing the rise of the omnichannel sales model, as people are showing increasing preference towards buying jewelry and other luxuries over the Internet," Dmitry Klimenko summarizes. He also points out that the weakening of national currencies versus the US dollar, typical of Q2 this year, may have a negative impact on the consumers' purchasing power, as well as affect tourist flows.