Some winning strategies to grow the diamond business exponentially

A panel of experts delved deep into the strategy for growing the diamond business in the coming decade at the recently held Retail Jeweller India Forum 2023. Opening the discussion, moderator Chirag Soni, Co-founder and Director of SGL, commended the panelists for influencing how consumers view natural diamonds.

Commenting on the ongoing diamond growth journey, Suvankar Sen, Director of Senco Gold and Diamonds, said, “In the last 5-7 years, the growth has been more phenomenal because the gold prices increased. It offers a good choice for those yet to fulfil their diamond dream.”

Varghese Alluka, Managing Director of Jos Allukas group, echoed the sentiment saying, “Diamonds are making inroads into tier cities. Building confidence in the product quality and the value of the diamond is equally important for growing these markets.”

Saumitra Saraf, Director of Aisshpra Gems and Jewels, who hails from a small town in eastern UP and has the majority of clients from the semi-urban or rural belts, said, “For the past three years, we have seen the diamond business growing at an average of 20% a year in terms of carats.”

Gaurav Anand, Managing Director of Anand Jewels, pointed out how the industry is tantamount to a bank, investment and fashion, and diamonds must justify all three considerations.

Shreyansh Kapoor, Vice-President and Partner of Kashi Jewellers, brought up the need for the generic promotion of diamonds by industry bodies to maximize the potential of diamonds. “It does not matter if the promotion is for natural or lab-grown diamonds,” he said.

Vikas Kataria, Chairman and Managing Director of DP Abhushan, the first diamond company to be registered with the Securities and Exchange Board of India (SEBI),said he reported a high diamond jewellery sales growth of 40% y-o-y over the last few years.

Rohit Kothari, Partner and CEO of Achal Jewels, a manufacturer specializing in fancy-cut diamonds, made the retailers aware of how the fancy shapes offer the same investment value as rounds. He said, “Business has grown by 50-60% since the COVID pandemic. The tremendous growth is due to the increasing acceptance of fancies, especially in the South.”

Identifying the need for knowledge as the critical problem, he urged the retailers to educate the staff as the target customers are more mature diamond buyers.

Anand talked about an in-store experiential initiative where customers view their diamonds on a 65-inch screen and learn about them. “The idea is to educate the customer on what the certificate states, as most customers cannot correlate the product with the certificate,” he explained.

Saraf talked about skilfully managing the inventory. “A customer seldom makes repeat purchases in the same category. So, we decided to have only the best pieces with multiple numbers of units. It has increased diamond sales and reduced the pressure to buy new products continuously,” he said.

Realizing that only 20% of employees contributed to diamond sales, he introduced performance-based targets and incentives. “Today, more than 90% of my employees in every store are selling diamonds. It is helpful for the employees also as their packages have grown,” he added.

Kapoor elaborated their strategy of stocking deep and selling cheap, much like Walmart. In light of the growing online market where customers view uncountable designs, Kapoor said, “I want to offer a wide range – from a nose pin to a 100-carat necklace – to a customer who comes to the store.”

The panelists talked about the emerging youth population and the Western influence on them. Anand suggested creating and aggressively marketing signature collections that are recognizable by their designs. “There is a flaunt value to such design, and youngsters love it,” he commented.

Saraf underlined the importance of meeting the budget expectations of young customers, saying, “More than 65% of our diamond jewellery inventory is in 14kt. It reduces the value by 20% compared to 18 kt.”

Talking about fancy diamonds being the most significant trend in the USA, with over 50% of the bridal ring market and special occasions such as Women’s Day (around $7 billion) and Valentine’s Day (around $6.2 billion) revenue-generating days, Kothari said, “These are two big opportunities in the next decade.”

Courtesy: Retail Jeweller India