Platinum Market to Grow by 23% in 2015
The second annual barometer released by the Platinum Guild International (PGI) found that platinum jewellery market positively grew by 28 per cent in 2014. The report also highlighted the consumer shift and retail trends in 2014 and platinum market outlook in 2015.
The annual barometer conducted by independent platinum experts and industry analyst, revealed the consumer retail sales data of platinum jewellery in 2014 and crucial projections for 2015. Platinum jewellery is the second largest consumer of platinum in the world (35 per cent) after the auto-catalyst market (36 per cent). The research survey covered over 400 jewellery retail companies with close to 40,000 retail outlets in the four main international markets of China, India, Japan and the USA. The research was conducted between January and February 2015.
The report highlighted the growth of platinum sales that went up by 28 per cent in weight terms in 2014. Due to general elections in India in the start of 2014, the growth was slow. But, post election the growth in platinum sales was seen across different types of outlets. PGI’s strategic retail partners were up +33 per cent during 2014 while the other outlets grew by +19 per cent. Strong growth in 2013 and higher gross margins in 2014, contributed to the India market seeing a compounded annual growth of 80 per cent in two years.
In 2014, the platinum industry has seen a change in the buying trend for precious metal jewellery, leaning more towards everyday wear and gifting, leading to an acceptance of platinum in this segment. Platinum jewellery sales is contributing an average of 5 per cent of total sales for retailers selling the product and up to 10 per cent for some key jewellers. The sales contribution and higher gross margins have caused retailers to rethink and change their approach in promoting their in-store platinum counters. Suvankar Sen, Executive Director, Senco Gold & Diamonds said, “Platinum has successfully tapped into the consumer base with its symbolic designs and carved a niche by resonating on an emotional level with the youth. With rapid expansion in the planning for Senco, the robust strategy adopted for EVARA by PGI has proved platinum to be a game changer this wedding season. The visibility of new designs is garnering high inquiries for the products and generating sales across segments.” PGI successfully launched Platinum Evara in December 2014, which targets the Indian Bridal jewellery market.
Notable platinum trends include the popularity of couple bands and rings continued to be the largest sales category for platinum jewellery, accounting for 61 per cent of the product split in terms of volumes. Men’s platinum jewellery range is going to be the future growth driver by retailers, with the segment currently standing at 21 per cent of the product split compared to 17 per cent in 2013. Jitendra Vummidi, Managing Director, Vummidi Bangaru Jewellers said, “The jewellery buying pattern in India has been evolving in the past few years and platinum has been gradually gaining popularity. The men’s jewellery segment has been growing rapidly as the male audience seeks subtle elegance in jewellery that platinum is all about. And now with the wedding jewellery brand Evara, we are going to attract a new set of consumers.”
Platinum jewellery consumers are also showing a growing preference for gem-set or studded platinum jewellery, especially in rings, pendants and earrings. Vaishali Banerjee, Country Manager India, PGI said, “Given the overall market scenario, with the first half of the year being subdued, platinum growth since 2014 has been very positive and consistent. And this growth comes from continuous improvement of consumer sentiment, higher conversion at the retail stores and improving the disposition for platinum amongst our key target audience.”
Outlook for 2015
According to the report, the platinum jewellery market is expected to grow further by 23 per cent in 2015. The economic revival, increasing consumer spending power and retailer ability to drive footfalls in their stores. Vummidi says, “The current progression has been positive in terms of volume growth at 30% in 2014 and we predict the demand for platinum to accelerate further in 2015.” Orra CEO, Vijay Jain has also seen platinum’s appeal changing over time and it’s no more just an urban phenomenon with increasing desire for the metal across Tier 1 and Tier 2 cities. He said, “We will continue to drive demand amongst the younger audience in 2015 with an eclectic stock mix of jewellery and are looking at a 25% growth in 2015.”
The Platinum Guild International (PGI) retail partners are optimistic about 2015 with all types of jewellery including platinum and diamond jewellery. The initial response for Evara has been positive and should contribute to strong growth figures for 2015, over and above the 23 per cent. “With the launch of Platinum Evara on the back of strong consumer research at the end of the year we are looking at further accelerating growth. The initial response to this new category has been very positive,” adds Banerjee.
Globally, retailers anticipate the platinum retail market to grow by 2.3 per cent in ounces compared to 2014. In 2015, India is expected to grow by 23 per cent, the USA by 7 per cent, Japan by 1 per cent and Chinese market to remain flat. In 2014 total platinum retail sales across the four key markets was flat. India platinum retail sales grew by 28 per cent, the USA grew by 8 per cent and Japan grew by 3 per cent. In China (the largest platinum retail market) platinum retail sales fell by 3 per cent driven by the economic slowdown. Huw Daniel, CEO of PGI, commented, “Continued growth in the platinum jewellery market is important, as the jewellery category represents 35 per cent of all global demand for platinum. 2015 is expected to deliver higher growth and clearly there are concerns about the Chinese market, but PGI has plans in place this year to address the challenges and to capitalise on the latent demand. India is very exciting and PGI is bullish about the prospects there, particularly in the light of the launch of the new bridal segment, Platinum Evara.”
Banerjee shares, “The outlook for 2015 is strong given that platinum resonates with young India. Platinum Love Bands are getting embedded in the Indian culture and now with the successful launch and roll out of Evara, platinum offers an opportunity for retailers to bring in new consumers to grow their businesswhile delivering a superior consumer experience.”