JEWELLERY EDITORIAL

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2014/08/13

It can be frustrating for a jewellery store to create a web-based selling platform. It is difficult to fully portray the look and feel of your brick and mortar store. It doesn’t matter how good your web designer may be, it’s not the same as being in the store...unless you create a virtual tour.

 

Virtual tours are web-based interactive 360° panoramic photographs created by taking multiple shots and stitching them together for one continuous picture. The viewer can use a mouse to move around the photo to see the image from all directions. This is getting to be very common on real estate and hotel websites, allowing a visitor to virtually tour a room or property.

 

Virtual tours require specialized equipment and software to create fully interactive and professional quality images but basic 360° panographs can be made with a smart phone using a variety of panorama apps.

Take your store online

A full featured virtual tour has capabilities rarely used on real estate and hotel sites that are handy for a jewellery retailer. One of the most important and most versatile is a “hot spot”...an area of the photo that is active and clickable. As a viewer moves through your virtual store they can hover their mouse over a showcase to find out what is on display. Clicking on the case labelled “bridal” could move to a close up photo of the case or take the viewer to the bridal section of an online store. In the close up view, clicking on a ring could bring up a full description of the item including additional photos or lab reports. Add a live sales person via chat or Skype to give viewers the same personal, one-on-one attention they expect when visiting in person.

 

Be sure to prepare your store before a professional 360 ° photoshoot. Of course you want it spotlessly clean and looking it’s best, but you need to consider safety as well. Do whatever you can to hide your security equipment. Strategic use of plants, posters and other items can hide the locations of motion detectors, security cameras and safes. Talk to the photography team about digitally removing sensitive security items from the photos. You don’t want to enable someone to case your store from home.

 

Virtual tours are still in their infancy for retail stores, but not for long. Soon they will be fully integrated with your social medial, POS system, online shopping cart and more. It will eventually be a fully-functional second location for your jewellery store. But for now it is a good way to introduce your store experience to online viewers and add interest to your website.

 

 


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2014/08/13

It’s just over 30 days until the September Hong Kong Jewellery & Gem Fair, the world’s largest fine jewellery trade fair, opens to the public. While there are some naysayers when it comes to the growth of the jewellery and watch industry in China and Asia, there remains keen interest in tapping the public’s growing wealth and hunger for these products.

 

The latest example of companies expanding in this market comes from French holding company, Kering. The multinational, which owns luxury, lifestyle and sports apparel and accessories brands, recently announced that it acquired the Ulysse Nardin watch brand, one of the few remaining true independent Swiss luxury watchmakers.

 

Kering (formerly known as PPR) hasn’t been shy about upping its stakes in the “hard luxuries” category (jewellery and watches). Nor has it been shy about expanding into China and Asia.

Kering’s Latest Acquisition Shows the Potential for Growth in China

Qeelin Dragon and Phoenix ring (with the phoenix head shown)
made of 18k yellow gold, diamond pavé and rubies.

 

François-Henri Pinault, Kering’s chairman and CEO, said in a statement that Ulysse Nardin will reinforce its growing jewellery watch division, which consists of Boucheron, Dodo, Girard-Perregaux, JeanRichard, Pomellato and Qeelin. Three brands (Italian jewellers Pomellato and Dodo; and Hong Kong jeweller Qeelin) were acquired by Kering within the past two years.

 

“We have great ambitions for (Ulysse Nardin) and we will help it continue its international expansion whilst staying faithful to its roots and its identity,” Pinault said following the acquisition announcement.

 

“Joining Kering is an opportunity for Ulysse Nardin,” added Chai Schnyder president of Ulysse Nardin Board of Directors. “It will allow the brand to carry on with its international expansion and continue to innovate, while assuring the long-term future of its knowledge and expertise and communiqué.”

 

Make no mistake; what both companies mean by expansion is rapidly moving into China and Asia.

 

The Asian market and hard luxuries has been Kering’s target for some time and Pinault has made no secret of it. In 2012, he said that for 50 years the growth in population and wealth in the world (800 million consumers) was centred in the U.S. and Japan. However, in 2006 the company identified that economic growth has shifted to emerging markets—particularly China, India, Brazil, and more recently, Indonesia—bringing 3 billion consumers to the worldwide market, and that this trend will continue.

 

“It means that in the next 50 years the growth is amazing,” Pinault said. “We don’t have any idea what it will be. We are always referring to the past but it’s no use. We cannot compare 3 billion people with more and more purchasing power to 800 million in the past… The question is what should we do to take advantage of those opportunities of growth?”

 

It seems to me that the company knows exactly what it’s doing.

 

 


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2014/08/13

     We have concluded the current situation of the India jewellery marketin and some key competitors in the previous reports (Part 1 and Part 2). So what is coming the near future? Fine jewellery sales and fashion jewellery sales are forecast to grow by 12 percent and 17 percent per annum respectively in India in the coming years.

Market Report [India - Part 3] Prospects

     Branded players are increasing their presence across India and opening more outlets, especially in South India which is becoming a hub for branded fine jewellery. Tanishq from Titan Industries Ltd and Shubh Jewellers from Rajesh Exports Ltd are expected to perform better than other companies. Both are expanding rapidly by adding new stores and implementing a variety of marketing campaigns and offers to widen the consumer base each month.

Table 1. India jewellery sales forecast 2012-2017

  2012 2013 2014 2015 2016 2017
Jewellery (USD bn) 29.91 33.54 37.69 42.43 48.85 54.08
Growth +19.2% +12.1% +12.4% +12.6% +12.8% +13.0%

Source: Euromonitor International from trade associations, trade press, company research, trade interviews and trade sources

 

Table 2. Jewellery brand shares in India 2008-2011

Brand

Company

2008

2009

2010

2011

Tanishq

Titan Industries Ltd

2.6

2.6

2.8

3.1

Joyalukkas

Joyalukkas Holdings

0.9

0.9

1.0

1.0

Kalyan Jewellers

Kalyan Jewellers India Pvt Ltd

0.6

0.7

0.9

1.0

Gili

Gitanjali Gems Ltd

0.6

0.6

0.7

0.8

Malabar Gold

Malabar Group

0.6

0.6

0.7

0.8

Shubh

Rajesh Exports Ltd

-

-

0.4

0.5

Gaja

Shree Ganesh Jewellery House Ltd

0.4

0.5

0.5

0.5

GoldPlus

Titan Industries Ltd

0.3

0.4

0.5

0.5

TBZ

Tribhovandas Bhimji Zaveri Delhi Pvt Ltd

0.3

0.3

0.4

0.4

Reliance Jewels

Reliance Retail Ltd

0.1

0.2

0.3

0.3

Kirtilals

Kirtilal Kalidas & Co

0.2

0.2

0.2

0.2

Others

 

81.5

81.8

81.5

81.3

Source: Euromonitor International from trade associations, trade press, company research, trade interviews and trade sources

 


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2014/08/12

Buying and investing in gold has become a customary habit with Indian people. Major chunk of the savings of citizens here is used in buying gold. According to figures made available by the government sources, India imported gold worth USD 56.3 billion in 2011-12; USD 53.7 billion in 2012-13 and USD 28.9 billion in 2013-14. The Compound Annual Growth Rate (CAGR) of the gold-import between 2008 and 2012 had reached above 40% in INR terms, which is alarming.

 

According to an estimate, total gold hoarded by Indian people is estimated between 18,000 to 40,000 tons. This has value of about USD 827 to USD 1,840 billion (or INR 54 to 120 lac crore). This amount does not include the gold held by rich trusts of Indian temples. These figures reveal a perception of the huge amount of foreign exchange (wasted) in the form of gold which is lying idle in bank-lockers here. This problem is likely to swell in future if drastic measures are not taken. The scene is rather dismal especially when the financial condition of the country is weak.

 

This is the reason why India’s previous government had imposed 10% import duty on gold and the present government has preferred (against all expectations of the industry circles) to continue with the same. The other option with the Indian government to curb the Current Account Deficit (CAD) was to recycle the above-mentioned huge amount of gold lying unused with Indian people and rich temples.

Is Spending on Gold a Bad Habit?

Desist from buying gold for the sake of economy…

 

Accordingly, the government has also introduced a scheme to attract gold deposits from temples at a lucrative interest rate. Initially, the suspicious temple trusts were reluctant to declare or deposit their gold with the banks but now slowly, the scheme is becoming acceptable by the trusts with the Tirumala Tirupati Devasthanams (TTD) of the famous Tirupati temple in South India depositing a huge amount of 1,800 kgs. of gold with the State Bank of India (SBI) recently, taking the total deposits made by it so far with various banks to more than 5,000 kgs. The gold has been deposited with the SBI under its Gold Deposit Scheme for a period of five years which would fetch the trust an interest of 1% per annum. The gold will now be melted at Government Mint situated in Mumbai.

 

Similarly, Shree Siddhivinayak Ganpati temple in Mumbai which is often visited by Bollywood celebrities, had already deposited 10 kgs. of its gold with a bank. The trust is still said to have 140 kgs. gold in its vault. The government is also encouraging individuals to deposit their gold jewellery with banks on similar line.

 

The hunger of gold among Indians is insatiable. If one goes by the facts and figures above, the gold crazy Indians are, in a way harming the fragile Indian economy. So is it a bad habit among Indians to spend on gold? Neither the government nor experts here have ever denounced the so called habit of hoarding gold. The government seems to avoid the ideas which may make them un-popular. It is necessary for the Indian government to control the CAD, levels of foreign debt to reserve ratio, depreciation of Indian currency and other foreign exchange related difficulties. These factors are sucking big amounts of savings every year which can be otherwise used for scarce capital for infrastructure, generation of employment etc.

 

To put it other way round, gold is mother of all non-essential and unproductive imported commodities in India. It is the second largest single non-essential commodity (after petroleum, which is essential) imported every year. In short, when the purchase of gold is not a productive investment, it becomes duty of every Indian citizen to desist from spending on any form of gold, at least till the country safely comes out of the present hazardous CAD position.

 

 


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2014/08/06

Even as the economy continues to improve the majority of consumers in the US are still wary when it comes to spending on big-ticket items. One of those items appears to be diamonds as the combination of the scarcity of sizable mine discoveries and soaring demand from China may be at a breaking point for value-conscience shoppers in the US. 

 

Blue Nile, the largest US internet retailer of diamonds and diamond jewellery said Tuesday that net sales fell 1.3 percent to $106.6 million for the second quarter. Operating income for the quarter totalled $3.2 million, representing an operating margin of 3 percent of net sales, compared to 3.2 percent for the same period of 2013. Net income totalled $2.2 million. This is a company created to provide value for diamond shoppers.

 

Most of the loss can be attributed to a 4.6 percent drop in U.S. engagement net sales to $60.9 million, compared to $63.9 million. Some good news is that the company’s recent push into fashion jewellery the past year seems to be working. Non-engagement net sales for the second quarter 2014 increased 2.6 percent to $27.7 million.

 

“The diamond price environment in Q2 materially impacted our performance. As a result we executed strategic and targeted price changes to ensure that Blue Nile's superior value is absolutely clear to the consumer,” said Harvey Kanter, Blue Nile chairman, CEO and president. "With these changes we are seeing a return to growth, and when diamond prices normalize, we expect to see even greater benefits from ongoing investments we're making in the user experience.”


Blue Nile Style 7798, Nouveau diamond cushion-cut engagement ring in platinum

 

The US remains an important market for the diamond industry, accounting for 40 percent of the world demand. It’s something De Beers CEO Philippe Mellier echoed during an interview with Bloomberg News earlier this year. However, he did note that the growth in the US market is among the upper-tier of consumers.

 

“The US is still a very big market for us, about 40 percent of the world market. In total the market grew slightly more than 3 percent in 2013 and we're expecting around 4 percent maybe 4.5 percent in 2014,” he said. “The US market is growing because there is a generation of wealth and our customers are willing to spend more.”

 

De Beers strategy is to go after the big spenders through a major push with its Forevermark brand. In May, the brand unveiled a multi-media marketing and advertising campaign designed to target customer seven times.

 

The rough being used for Forevermark diamonds and diamond jewellery is the top five percent of De Beers’ mines in terms of quality, Mellier said in a interview with me in June. The average diamond jewellery buyer will not be able to purchase those stones.

 

“A discerning customer knows that the diamond he or she bought has been inscribed with the Forevermark and logo and the number that makes that diamond very unique and traceable,” he said.

 

For those who cater to rest of the US market, it may be a difficult time.

 

 


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