MUMBAI—Young Indians, under the age of 35 also popularly known as millennials, have emerged as one of the most important consumer segments buying diamond jewelery in India, accounting for close to half of the sectors overall revenues showing that the sparkling stone has not lost its sheen among the youth, who are also known to spend a lot more on everything from fancy gadgets to vacations.
This is higher than the cumulative total of the top 4 diamond jewelery markets of the US, China, India and Japan, which account for 73 percent of global demand, the potential diamond-buying millennial market is more than 220 million people, 39 percent of the diamond-buying population in these four countries in 2015, said mine owner De Beers in The Diamond Insight Report 2016, an annual publication in its third year.
Meanwhile, the overall market has lost some of it sparkle.
In India the market saw sales decline, even in China it grew at a slower rate pulling down the value of the global diamond jewelery sales.
Global diamond sales to consumers in 2015 reached an estimated $79 billion—down from $81 billion in 2014, or a 2-percent decline. This contrasted with positive growth of 3 percent in 2014, said the report adding that at constant exchange rates, global demand for diamond jewellery grew by some 2 percent in 2015.
In India the market decline was driven by a more restricted consumer credit environment and overall weakness in consumer spending.
India accounts for 7 percent of the global demand for polished diamonds and is the fourth-largest market globally after the US, Japan and China, the report said.
However, the millennials spent nearly $26 billion on diamond jewelery in the largest four markets combined, representing 45 percent of the total retail value of new diamond jewelery acquired in these markets.
The gold to diamond shift in India has been happening for a while. For instance, jewelery retailer Gitanjali Gems Ltd., which owns brands, such as Asmi, Ddamas, Nakshatra and Gili, used to get 60 percent of its revenues from gold and 40 percent from diamond in financial year 2012.
Now in fiscal 2016 diamonds account for 70 percent of its revenues and gold is 30 percent, said Mehul Choksi, chairman and managing director of Gitanjali Gems, who made the conscious shift to selling more of the precious stone over the years.
“Gold is rooted in culture and represents a collective mind-set, whereas, diamond is more about the individual and personal taste,” said Santosh Desai, managing director, Future Berands Ltd.
Desai, who is also a columnist, media critic and the author of Mother Pious Lady: Making Sense of Everyday India, said, while explaining that as a society we are seeing a shift toward an increasing spend on categories that are about personal consumption than display, like luxury, eating out and travel.
Youth below the age of 35 accounts for 50 percent of electronic retail chain Croma’s overall revenues. “The younger customer spends a lot more on personal consumption,” said Ritesh Ghosal, chief marketing officer, Croma, operated by Infiniti Retail Ltd., a unit of Tata Sons Ltd. Ghosal explained this means they will spend a higher proportion of their income on mobile phones and also change it more often than the older consumer.
However, they may not buy the most expensive phone as their propensity to spend is lesser than that of the older consumer. Likewise for fine dining.
“Youth account for 40 percent of the sector’s revenues,” according to the National Restaurant Association of India report 2016.
This is true for travel, as well. Young Indians in the age group of 18 to 35 years account for 66 percent of the total trips made on Makemytrip.com, a travel portal, a September report from the company said.
