High prices behind weak demand for diamonds this V-Day

Kolkata : Diamonds may be woman’s best friend, but due to high prices this year their Valentines may not buy them the rock as gift despite shoppers’ preferred shift away from gold jewellery.

The jewellery industry feels that Valentine’s Day sales of diamond this year would be of the same volume (carat) or even lower than last year’s.

“Sales of diamond jewelleries were better in January (2012) than December (2011). But for the industry as a whole, demand for diamond jewelleries before Valentines’ Day this year is subdued as prices have swelled by about 80-100 percent compared to last year,” Sandeep Kulhali, vice president (retail) at Tata Group’s jewellery brand Tanishq, said over phone from Bangalore.

Kulhali said the industry might see a de-growth compared to 2011 in terms of volume, although it expected to see a 15-20 percent growth in sales of diamond jewelleries in value terms this year.

“Sentiment is down currently in all segments…and diamond is an expensive segment. So challenge for the industry this year is the number of sales, which might be less this time,” he said.

Sales picked up in the last three days before February 14, he observed. “After that sales of diamond will again stabilise.”

Kolkata-based Sawansukha Jewellers said diamond jewellery sales for this Valentine’s Day in terms of volume would remain the same as last year, but valuation will increase as prices have soared.

“Carat-wise sells of diamond for this Valentines’ Day should remain the same compared to the last year. But we are not discouraged by weak sales as in value terms business will increase,” Sawansukha Jewellers managing director Siddhartha Sawansukha averred.

Sawansukha said shoppers’ preferences had shifted from gold to diamond jewelleries for V-Day gifts in the last two years.

“The shift in demand is due to various factors. Gold in our country is considered as traditional, while diamond is trendy. A lot of designs are available in diamond jewelleries than that of the yellow metal.”

“Moreover, young and working women are preferring diamond jewelleries as they are light…old jewellery cannot go as light as it is possible for the jewellery made of the precious stone,” he said.

Agreed Pankaj Parekh, regional chairman of the Gems and Jewellery Export Promotion Council. “There has been a mass shift of preferences from gold to diamond jewellery. Demand for diamond jewellery is catching up.”

“But as there has been a hike in prices of the precious stone compared to last year. This year the trend is for low budget diamond gifts,” Parekh said.

“People are going for small quantity of diamond because of high prices,” he added.

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