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De Beers sees 30 pc jump in diamond demand in India

Raja Simhan T E

CHENNAI, July 3

THE Indian market accounted for over 20 per cent of the total diamond sales of the world's largest diamond mining company, De Beers, in 1999, said Mr. Nicholas Graham Smith, Marketing Director, Consumer Marketing Division, De Beers, London.

According to available data, 1999 saw the highest growth of about 11 per cent in worldwide diamond retail sales in the nineties. For De Beers, profits rose by over 80 per cent, to around $ 680 millions, up from around $ 370 millions in 1998.

The US market climbed by 12 per cent, Europe by 10 per cent, Asia Pacific by 13 per cent, while India contributed the highest growth with around 20 per cent.

Mr. Smith said ``the 20-per cent Indian market share reflects political stability and economic prosperity, translating into better purchasing power for the people''.

``With the macro-economic indicators showing an upward trend, we expect diamond sales in India to grow by around 25-30 per cent during the current fiscal year, compared to a 20-per cent witnessed the year before,'' he said.

The major reason for the growth in retail diamond sales in India, Mr. Smith said, was a gradual shift in consumer preference for diamonds vis-a-vis gold jewellery. Sources in the trade said volatility in gold prices last year also boosted diamond sales.

Further, jewellers traditionally dealing in gold and silver, have also started selling diamonds. ``This boosted the diamond jewellery sales in India,'' he said.

Mr. Smith said India ranked first in the world in the cutting and polishing of diamonds, followed by Belgium, Israel and US. ``Out of 12 diamonds cut and polished worldwide, 11 are from India,'' he said.

Buoyed by the good response from the Indian market for diamonds in the last few months, De Beers late last year stepped up its advertising campaign in the country. The company, in association with Hindustan Thompson Associates, would launch television co mmercials of its new brands meant for occasions such as weddings and birthdays, he said.

The commercials form part of a three-phase programme that De Beers launched last year to promote retail diamond jewellery in the country. De Beers, in addition to advertising, will help jewellers improve the standard of designs by giving training on prod uct knowledge and marketing skills, and forming publicity teams to organise exhibitions in India, he said.

Mr. Smith said in September De Beers would roll out new products more specific to the Indian market. He, however, declined to divulge further details.

For De Beers, the priorities in India, other than selling rough diamonds, will be to promote Indian designs in the international market. In the last couple of years, Indian jewellery had received overwhelming response in the world market. ``We, in associ ation with the local jewellers are conducting design competitions, which will help promote the Indian brand abroad,'' he said.

Mr. Smith said ``there is still tremendous scope for improvement in the area of design, the life blood of the diamond jewellery industry. International competition in diamond design is hotting up, and Indian jewellers need to be more creative, to have an edge over the competitors abroad''.