The jewelry market has a glittering future as the consumer appetite for
jewelry related to the apparel and costume increased tremendously in
recent years. In 2020, the jewelry industry is poised to cross $250
billion, which is almost 40 percent increase in sales compared to the
last six to seven years.
According to experts, the growth in the sector can also be attributed to
changes in the apparel, garments, and clothing industry where new
trends have forced designers to continue innovation by offering matching
jewelry designs.
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Factors of Change
In recent years, the pace of development is specifically attributed to
the internationalization and consolidation of products, which has made
it easier for new trends from around the world to proliferate the
sector.
The growth of branded products is yet another reason for the development
as brands are able to replicate and produce visionary designs that have
attracted consumers who were not brand conscious. The reconfigured
channels landscape, where online products have seen double-digit growth,
is also boosting sales.
Similarly, hybrid consumption of jewelry has reduced the overall price
increasing the buying power of consumers; whereas, fast-changing fashion
trends have given impetus to price wars.
Jewelry and gemstone industry is still characterized by the dominance of
local players and large national brands. This is evident by Christ in
Germany and Chow Tai Fook in China, which are key players in their
respective countries. However, these so-called local players are also
consolidating their positions in the global market by integrating small
local specialized chains. For instance, Tiffany & Co. and Cartier
have made tremendous progress by buying shares of local companies or
acquiring them outright.
Other well-known international brands such as Zara and H&M are also
penetrating worldwide markets to capture sales channels. The pace of
internationalization and consolidation will continue to grow in the
coming years because this is an effective strategy that has also worked
for related apparel and garments industry.
Already smaller players are feeling the heat as major brands are taking
over Asian markets because large companies can easily get loans to
expand their business, and they can access consumers through online
channels. For instance, the share of large well-known Jewelry companies
in India rose from a mere 5 percent to almost 35 percent in 2020,
according to World Gold Council estimates.
Branded Jewelry
Branded jewelry is quickly becoming one of the most sought-after
products in the market. According to McKinsey & Co. analysis, the
share of branded jewelry was a mere 10 percent in 2003, which is
expected to rise between 335 and 40 percent by 2020.
The newly acquired wealth in Asia has prompted consumers to acquire
branded jewelry. Experts believe that a significant portion of consumers
in the emerging markets are attracted to the brand because it shows
their new wealth deposits. Apart from the “Show-off”, consumers in
emerging markets are also interested in the brand because it generates
trust and a sense of upgraded lifestyle. On the other hand, branded
jewelry in North American and Europe owes its success to many young
consumers who seek branded jewelry to enhance their sense of
self-expression and self-realization.
In the past, brands such as Pandora and Tiffany & Co. made inroads
into the jewelry sector; however, companies local brands such as Hermes
and Dior are also taking charge due to the assortment of products and
jewelry design. The trend indicates that consumers are also looking for
new designs instead of just trusting the global brand.
For local artisans and jewelry makers, the impetus of branded jewelry is
a bad omen because local artisans don’t have the muscles to challenge
large companies. Still, savvy locals are partnering with companies such
as Cadenza and Swarovski’s to showcase their designs. These companies
offer curated multi-brand jewelry for their consumers making it a
win-win situation for the consumer and the local artisans.
Reconfigured Sales Channels
New sales channels such as the Internet, mono-brand stores, and
multi-brand boutique jewelry outlets are thriving in the face of the
dynamic landscape. Online sales of jewelry segment will continue to
increase in the coming years. The increase will be led by standardized
affordable branded jewelry products because customers think that they
understand the product without feeling it, which makes it easier to buy
such products online.
Despite the emergence of online channels, most customers still prefer to
feel the product by walking into a jewelry store because the sale of
jewelry is a sensory experience. A lot of consumers also consult online
stores and social media before purchasing the item from a
brick-and-mortar store.
Monobrands stores such as Pandora have also gained market share as these
stores rely on offering streamlined customer experience. Most customers
will prefer mono-brand because it gives them a chance to get a more
personalized experience and control over their buying patterns.
Similarly, small multi-brand stores such as Cadenza and Swarovski’s are
also providing a refined touch by concentrating on offering an
assortment of unique jewelry from multiple brands.
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