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Responsible for over half of the industry’s global value sales, jewellery often directs growth patterns for the Personal Accessories industry. Real jewellery in particular enjoys a much higher unit price as compared to other personal accessories, and its demand is driven by the traditions of wearing and gifting such products. As such, traditional leaders China, US and India account for nearly 60% of world value sales even as others such as Russia and Indonesia are expected to grow the fastest in local currency terms in 2012.
There are several reasons which propelled jewellery as both the value sales and growth leader in the review period of 2007-2012. Apart from drawing a majority of its sales from Asia Pacific, it 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 categories. It also saw a healthy increase in unit prices due to a significant appreciation in the global prices of precious metals such as gold, essential for real jewellery. 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.
Although luxury manufacturers saw sales revival over 2010 and 2011, their global market share still declined over 2006-2011. Regional Asia Pacific manufacturers such as Chow Tai Fook Jewellery Group, Shanghai Laofengxiang Co and Titan Industries set the pace as their brand appeal in key markets such as China and India helped them climb the ladder of global hierarchy. However, none of the regionally dominant brands operated by these companies have expanded on a global scale, leading to a situation where Tiffany, Cartier and Swarovski continue to lead the way in terms of global visibility.
Despite being amongst the top three jewellery markets globally, China and India are expected to lead value sales growth over 2012-2017, in local currency terms, 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 growth as they look to catch up with the leading markets.
Buoyed by China, India and Hong Kong in particular, Asia Pacific will extend its lead over the 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. Although the global competitive environment showcases a high degree of fragmentation, the situation is unlikely to change within the next five years.