Latin America’s jewellery sales are mostly driven by fine jewellery and by Brazil but costume jewellery and Mexico are increasingly important. The regional market remains dominated by specialist stores, and is extremely fragmented, but big local and international players in both costume and fine jewellery are gaining traction. Despite a fragile economic context, the regional outlook is positive, as jewellers and retailers innovate to meet the growing demand for affordable items.
Latin America’s jewellery market in the global context
At USD7.5 billion in 2017, Latin America is one of the smallest regions in terms of value sales of jewellery, only beating Australasia, at USD3.3 billion. In terms of per capita expenditure, the region is also the second smallest, at USD11.80 in 2017, after the Middle East and Africa, at USD6.00.
Regional value sales have declined since 2016
Sales of jewellery in Latin America recorded a decline in 2016, reflecting the poor performance in Brazil which accounts for nearly 50% of the region’s value sales.
The economic downturn in the country negatively impacted jewellery sales, with consumers shifting from fine to costume jewellery. As a result, overall retail value sales declined. Similar trends took place in Argentina.
Conversely, the Mexican market, dominated by costume jewellery, was quite resilient to the economic environment and continued growing, driven by product innovation.
At region level, fine jewellery represents 70% value sales
At regional level, fine jewellery represents 70% of value sales but there are significant disparities between markets. In Brazil, where the population with income above USD100,000 is twice as big as in Mexico, fine jewellery accounts for 86% of national jewellery value sales but in Mexico, the category accounts for only 32% of total sales.
Mexico is also a strong silver producer, and local jewellers offer items made of various materials, at various prices for consumers at different income levels.
Specialist retailers are by far the leading distribution channel
Jewellery and watch specialist retailers are by far the leading distribution channel for jewellery in Latin America, accounting for 77% of value sales in 2017. At the regional level, 95% of fine jewellery sales are made through this channel, as consumers buying fine jewellery prefer to buy it in specialist retailers to have the in-store experience and receive advice before committing to a purchase. For example, in Brazil, the largest fine jewellery market in the region, watch and jewellery retailers managed to stay afloat despite the economic crisis, thanks to services in store and flexible payment options (eg in instalments).
Conversely, in costume jewellery, jewellery and watch specialist retailers only accounts for 34% of the region’s category sales. Other key distribution channels for the category include leisure and personal goods specialist retailers (36%), variety stores (22%), and apparel and footwear specialist retailers (15%). Nonstore retailing is also a significant channel for costume jewellery, accounting for nearly 16% of the category’s value sales in Latin America.
A few large companies stand out, but their value share remains small
Jewellery is a highly fragmented category in Latin America, with a large number of small brands and a vast amount of unbranded jewellery.
A few larger companies stand out, but their share remains small. For example the regional market leader Brazilian player Joias Vivara only holds a 3% value share at region level and 5% in its home market.