Accounting for over half of personal accessories global value sales, jewellery often drives growth patterns for the industry. Euromonitor International examines reasons for this dominance and forecasts what the jewellery landscape could look like in 2017.
Real jewellery well ahead of the rest
Jewellery demand is often driven by the traditions of wearing and gifting such products. As such, traditional leaders China, the US and India account for nearly 60% of world value sales in 2012. Apart from drawing the majority of its sales from Asia Pacific, jewellery is dominated by the high-priced category of real jewellery. Commanding a unit price of nearly US$450 per unit in 2012, real jewellery is priced well above all other personal accessories. It also saw a healthy increase in unit prices due to a significant appreciation of global precious metals such as gold. When compared to other categories, the gulf in absolute sales is evident from the fact that the second largest personal accessories category, handbags, is likely to be just one-sixth of real jewellery’s value sales in 2012.
Forecasting beyond 2012
Despite being amongst the top three jewellery markets globally, China and India are expected to lead value sales growth in local currency terms over 2012-2017, where gold jewellery is likely to be a continual favourite in both markets. However, jewellery focusing on other precious metals such as platinum or precious gemstones such as diamonds is expected to emerge as appreciable competition to the mainstream offering of gold. As a result of its superior growth, India will close its value sales gap on the US as it looks to leapfrog the latter immediately after 2017. In terms of emerging growth drivers, Russia and Turkey are expected to record double-digit value CAGR in 2012-2017 as they look to catch up with the leading markets. On the evidence provided above, Asia Pacific will extend its lead over other geographical regions by 2017. On the other end of the spectrum, Australasia is likely to lose further ground as the smallest region by value sales.
In the face of slow economic recovery in Europe, market shares are likely to skew further in favour of regional players – especially those from US, China and India. Regional Asia Pacific manufacturers such as Chow Tai Fook Jewellery Group and Titan Industries will set the pace for jewellery growth over 2012-2017 which might prove to be tough to match for luxury brands such as Tiffany and Cartier. Although the global competitive environment showcases a high degree of fragmentation in 2011, the situation is unlikely to change within the next five years.