With new-age consumers moving to diamonds from gold, the market for the precious stones is expanding in India. The Indian unit of diamond giant De Beers is seeking to tap the growing popularity of diamonds and launching boutique stores and expanding its presence in India. In an interview, Sachin Jain, managing director of De Beers India, explained what is driving the market. Edited excerpts:
Things had started looking up for the jewellery industry in November with festive sales and the wedding season but then the Omicron variant of COVID-19 struck towards the end of December. Did it have an impact on your sales?
It is ironic, but if you look at 2021, it has been the best year the (diamond) industry has seen since World War II. We went through a period of uncertainty, but business really picked up after the second wave. In India, the business grew by over 20 percent. Our biggest market is the United States and there, we witnessed growth of 30 percent, which has never happened. So if you ask how we grappled with it, the grappling is really with a lot more demand than anything else. And that is something we as an industry had not anticipated. So it's been a very strong year. We all hope that the pandemic doesn't continue. But coming out of this time, we have made a few realisations. We have learned how to plan stock intelligently, manage capital, and so on.
What’s fueling this growth?
The fourth quarter has been a rocking time for the industry. And that’s for two reasons. One is the move from gold to diamonds. We saw that acceleration happen. Consumers 40 years ago were buying gold as an investment avenue or looking at it as a lifestyle purchase. But today women want to buy things that they want to wear and hold meetings in. So that was one shift. We also saw Tier II and Tier III markets perform brilliantly. And the third shift we saw was the inclination of consumers to buy from organised players. As Indians, all of us have a family doctor, and a family jeweller, but now that mindset is changing a little bit. When you put your hard-earned money on the table, you want some transparency. And we've seen that happen now.
Several consumer goods companies have reported a decline in consumption lately. As a company present in the luxury to ultra-premium segment, what have you observed?
While the consumption in the high-end segment has been dramatic, we do not classify ourselves as a luxury player and we're really betting on the middle class of India for the next five-ten years as growth is in that consumer segment. And we think that the pendulum is moving fast because of transparency. For every single diamond, we give the guarantee of the source, where they are coming from. All these things matter, and are resulting in increased consumption. And I wouldn't want anybody to misconstrue that diamonds mean luxury because Forevermark (a De Beers subsidiary) starts at about Rs 5,000, which is not cheap but it is accessible and is good value for money. It's a good store of wealth. The entry points are very many and with transparency coming in more and more consumers will buy diamonds.
What initiatives are you taking to tap the middle class of the country?
Our entry points stand at as low as Rs 5,000-10,000 but importantly there's a big change happening in the geographical representation with our partners. It is changing because as a brand we are also evolving. We are making sure that the brand is more accessible, which means we need more points of distribution. And also the concepts we are coming up with in terms of ideas or design resonate with the target audience.
You opened a boutique store right recently, and you're been opening more of them. How many of them are coming up this year?
We are about to open our 14th store this Monday. And we intend to have 30 by the end of this year. That's the plan. But hopefully, we should do a little more. Let's see.
What kind of locations are you looking at?
Directionally as a brand, we are moving in to give a better and world-class experience to our customers. We have a combination of global and local design, which is inspired by the cultural aspect of our country. And the first thing, we're looking at all the capitals, the big cities, and then of course, eventually, we will grow to lower-tier cities. And we have a clear plan in that direction.
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