GLOBAL LANDSCAPE OF THE JEWELLERY MARKETNot long ago, we rang in the New Year, plac-

ing our bets on a recovering US economy and

with hopes that the slowdown of the Chinese

economy would not be too drastic. Alas, not only

are oil prices slumping, the volatile equities market in China

led to the implementation of a circuit-breaker. Amidst pessi-

mistic economic conditions, the global jewellery industry is

definitely not excluded from its impact. In these dire circum-

stances, brands need to seek opportunities for growth con-

tinuously in order to maintain a healthy balance sheet. This

article will look at how innovation applies to the jewellery

market as an area of opportunity.

Despite being susceptible to economic instability, year-

on-year growth rates of market size for jewellery in retail value

(based on US$ million, current prices, year-on-year exchange

rates) remained positive in 2014–2015 standing at 0.2 %, which

is the only category within personal accessories that registered

a positive year-on-year growth rate. In comparison, other cat-

egories within personal accessories, such as bags and luggage,

watches and writing instruments, registered -2.2 %, -3.3 % and

-4.8 % year-on-year growth rates, respectively.

However, the rise and fall in growth rates of real jewellery

value over the 2010–2015 period, was steeper than that of

costume jewellery. This shows that the demand for costume

GLOBAL JEWELLERY MARKET: INNOVATIONS AND OPPORTUNITIES

jewellery is relatively more stable compared

to that of real jewellery. Given the higher price

point, it is not a surprise that the demand for

real jewellery would fluctuate more due to mac-

roeconomic conditions compared to costume

jewellery.

In today’s volatile economy, jewellery brands

need to constantly seek opportunities to grow

their product offerings and provide higher value

for every dollar in order to keep their revenue growth positive.

COMPETITIVE LANDSCAPEAdditionally, the global jewellery landscape is also very

fragmented, making volatile macroeconomic conditions just

one of the many problems that plague the jewellery industry.

approximately 25 % of its revenue from March 2014 to March

2015. Chow Tai Fook retains its strong foothold in the fine

jewellery industry, leading with a brand share of 2.6 % in the

world in 2014.

However, gold jewellery is widespread in the market and

it is no longer a novelty to own such a piece. The raison d’être

for brands exploring new materials is to continue enhancing

their value proposition and maintain a steady flow of consum-

ers; both return visits and new buyers, by diversifying their

product offerings. Needless to say, these materials offer vari-

ous properties which substantiate their value. Silver, despite

being a softer metal than gold, is a popular metal used in both

costume and real jewellery due to its lower cost. Different com-

binations of gold and other metals, which result in alloys of

different colours, have also surfaced in the market in order to

capture the attention of buyers. Attractive combinations like

copper and gold rose to popularity in the 1920s, during the

mid-Victorian era. The combination of copper and gold pro-

duces what we know as Rose Gold. Apart from playing with

colour combinations to provide a wider product selection,

jewellery makers have also been exploring new materials to

be imbued in their latest creations. Not only are they looking

to inculcate new materials into their jewellery pieces to attract

the audience, jewellery makers are factoring in practicality,

like durability, when choosing materials. Fine jewellery mak-

ers are slowly introducing more platinum products to their

collections. Platinum is highly durable due to its resistance to

corrosion and high temperatures, making it a suitable mate-

rial to be used in rings and jewellery products that are worn

every day. Taking the game up a notch is Tiffany & Co., which

introduced its own alloy, trademarked as Rubedo, in honour

of its 175th anniversary. Rubedo resembles rose gold, however,

what sets it apart is the lower price point of Rubedo which

would mean a larger target audience would be able to afford

a Tiffany piece. Trademarking the Rubedo metal would trans-

late to a higher perceived value of Tiffany & Co.’s Rubedo prod-

ucts due to its exclusivity to the brand. Additionally, curating

one’s own material exudes the innovative proposition of the

brand, which is a break from the norm for luxury houses that

bank on the heritage and long-lived tradition of their brands

to push price points.

In an industry where designs of the product are very much

encapsulated around the precious gemstone, jewellery players

are restricted in their level of innovation which in turn restricts

their variety in product offerings. By manufacturing their own

alloy, jewellery players are able to customise the composi-

tion of the metal in order to suit their cost and profit margins,

whilst maintaining their brand image. After all, marketing is

By Jasmine Seng, Industry Research Associate at Euromonitor International

YEAR-ON-YEAR GROWTH RATES OF MARKET SIZES IN THE WORLD

2011-11 2011-12 2012-13 2013-14 2014-15

18 %

16 %

14 %

12 %

10 %

8 %

6 %

4 %

2 %

0 %

■ Jewellery ■ Fine Jewellery ■ Costume Jewellery Source: Euromonitor International

Growth rates of market sizes based on retail value, measured based on US$ mn, current prices, year-on-year exchange rates.

0.2

0.2

0.1

0.1

0.1

0.1

0.1

0.0

0.0

0.0

0.0

GLOBAL BRAND SHARES OF REAL JEWELLERY IN RETAIL VALUE (%)

■ Others ■ Chow Tai Fook ■ Lao Feng Xiang ■ Tiffany & Co. ■ Cartier ■ Lao Miao Source: Euromonitor International

92,4 %

2,6 %

1,9 %

1,6 %

1,5 %

1,0 %

Among the top 10 real jewellery brands in the world, only

four out of 10 brands have an impactful global footprint while

the rest target more local or regional markets. Given the frag-

mented and highly competitive global landscape of jewellery,

coupled with economic instability in the world, real jewellery

players would need to seek opportunities in order to deliver

sales. Real jewellery brands vying for a larger slice of the pie

globally would need to innovate and promulgate different

product categories on top of evolving their marketing strate-

gies in different locations to cater to the various needs of their

expanding customer base.

EXPLORING NEW METALS – A MELTING POT OF OPPORTUNITIESReal jewellery brands have been creative with the combi-

nation of precious metals and gemstones and the way these

precious elements are presented, in order to captivate buy-

ers. Gold and diamonds are traditionally popular with fine

jewellery makers as essential materials for crafting a piece of

exquisite jewellery. According to the World Gold Council, the

bulk of demand for gold falls under jewellery. Gold jewellery

remains popular in countries like China and India, where gold

jewellery remains a popular gift for weddings. According to

Chow Tai Fook’s 2015 Annual Report, gold products generated

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at 5.4  %, and the US with a CAGR of 2.9 %. Among the top six

countries with the largest millennial populations, Indonesia

leads with a projected 7.0 % CAGR in the millennial population

for the 2015–2020 period. This is not surprising considering

the economic reforms that are slowly occurring in Indonesia

that look towards improving the infrastructure, which would

drive the economy further.

EXPLORING NEW OPPORTUNITIES In order for jewellery brands to penetrate more markets

and intensify their global presence, innovation is vital even

in the midst of building on their heritage to sell their brand.

In our ever-changing economic landscape, innovation is not

restricted to certain industries, like electronics and appli-

ances. Instead, goods in the luxury industry and fast moving

consumer goods can also tap into innovation in every aspect.

However, in adopting innovation, manufacturers and brand

strategists alike have to be aware of the demographics of

the population in order to tap into the right target audience

effectively. In conclusion, even for brands with deep-rooted

heritage, there is no escaping that innovation will be the key

to untapped opportunities.

DEFINITIONS:According to Euromonitor International, real jewellery

(sometimes known as fine jewellery) includes all jewellery

items manufactured with precious metals and/or gemstones.

Precious metals include gold, white gold, platinum, sterling sil-

ver, palladium, rhodium, titanium, or alloys of one or more of

the above. Precious gemstones include diamonds, rubies, sap-

phires, emeralds, and real pearls.

According to Euromonitor International, costume jewel-

lery (also called fashion jewellery) includes all jewellery items

manufactured with non-precious metals and their alloys, sil-

ver (other than sterling silver), semi-precious gemstones, glass,

plastic, leather or other synthetic materials.

LARGEST POPULATION OF MILLENNIALS BY MARKET (MILLIONS)

■ Largest population of millennials by market (millions) Source: Euromonitor International

India China US Indonesia Brazil Russia

250

200

150

100

50

0

what propels the idea of every piece of jewellery to popular-

ity. With control over the supply of the alloy, coupled with the

right marketing strategy, jewellery players would be able to

extend their product offerings.

THE RISE OF THE MILLENNIALS: INNOVATION AS A SOLUTION FOR FUTURE DEMANDGreater innovation and larger product offerings are fun-

damental in driving demand from the millennials. Millennials

refers to the population reaching young adulthood around

the year 2000, who are armed with the spending power today.

According to Euromonitor International, millennials are more

experimental and expressive in their choices. Therein lies an

opportunity for brands to be daring in exploring new mate-

rials and reinventing the way millennials perceive and pur-

chase jewellery. The millennials are receptive towards new

ideas and altering their perception of new alloys would pre-

sent an opportunity for a new consumer base for jewellery

made from new materials.

India, China and the US have always been the top three

key jewellery markets, measured in market value size in US$

based on current prices with fixed year-on-year exchange

rates, after India overtook Japan as the world’s third larg-

est jewellery market in 2006. Coincidentally, these countries

contain the largest populations of millennials and will no

doubt remain the key growth markets in jewellery over the

2015–2020 forecast period. Over the 2010–2015 review period,

China saw a value CAGR of 6.9 %, with India trailing behind

In order for jewellery brands to penetrate more markets and intensify their global

presence, INNOVATION IS VITAL EVEN IN THE MIDST OF BUILDING

ON THEIR HERITAGE TO SELL THEIR BRAND

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