1. India is home to a highly dynamic consumer diamond market that has grown rapidly over the last two decades, fuelled by a fast expanding economy, a widening consumer base and a culture where precious jewellery plays an intrinsic role in social occasions and family traditions.
2. There are three distinct diamond jewellery consumer segments in India: socio-economic segments A/B (excluding all Elites), Elites and Super Elites. The latter two have a considerable share in value terms, despite representing only a small proportion of consumers, and display behaviours in relation to diamonds more in line with affluent Western consumers when compared with economic segments A/B.
3. Diamond jewellery is an ‘aspirational’ product in India and is more desired than other luxury categories. The level of ownership and desirability is particularly high among the Elites and Super Elites, while diamonds remain an aspirational product for the much larger non-Elite segment.
4. The highest proportion of diamond jewellery purchasers is located in Tier 1 cities (nearly 60 per cent) and in the north of India (nearly 50 per cent).
5. Love is the primary motivation for half of all diamond purchases. Unlike in many Western markets, very few men propose with diamonds in India and instead display their love with gifts of diamonds on different occasions during the marriage.
6. Purchasing journeys in India are normally a consultative process, in which women are the main decision makers, with the opinion of family and friends the most important factor in diamond jewellery selection. Retailers also play an important part in providing reassurance and advice.
7. The jewellery retail landscape has changed dramatically over the past 15 years, with the number of doors selling diamond jewellery growing much faster than the average growth in all jewellery retail doors. While the retail landscape continues to be dominated by small, family-run independent jewellers, the small proportion of chains contribute a disproportionately high share of total sales value of diamond jewellery. As affluence continues to grow, more Indian women will be able to access diamonds.
Women tend to start purchasing diamonds when their annual household income reaches US$5,000-6,000, and 75 million new Indian households are expected to exceed this ‘inflection point’ over the next decade. Another threshold is the monthly income at which they enter the Elite segment, above INR40,000, when multiple diamond piece ownership increases significantly.
8. The purchasing power of the highest income households is expected to rise at the fastest pace. The Elite and Super Elite women will drive high-value categories and set the trends that the wider market will seek to emulate. Gold plays a central role in Indian culture, including as a way to transfer wealth to offspring. Given the image of diamonds as a symbol of eternity, there is potential for diamond jewellery to be seen by consumers as an heirloom.
9. Brands, as a guarantee of quality and authenticity as well as differentiation, already play an important role with almost 80 per cent of women thinking that they are very important in the selection process. Brands are expected to gain further prominence for consumers in future.
10. Modern forms of retailing are gaining importance among all consumer groups. Chains are set to grow in significance and lead the way in online development, both as a sales channel and as a means of researching future acquisitions.
Diamonds have always had an intrinsic appeal to Indian women, with jewellery’s role embedded deep within Indian culture. Over the last decade, India’s rising economic prospects have enabled more Indian women to act on their desire for diamonds. Indian consumer demand for diamonds has more than trebled over this period and India is today the world’s third-biggest consumer market for diamonds.
Yet this growth story is far from over. Rising incomes and aspirations could afford India’s diamond industry an even bigger prize over the next decade. To realise this potential, diamond industry stakeholders will need to be proactive in opening up opportunities in this evolving consumer market.
To gain an insight into Indian consumers’ changing attitudes and preferences, in 2014 De Beers commissioned a survey of 40,000 Indian women, as the main decision makers and buyers of diamond jewellery in India. It is likely to have been the largest consumer study of its kind ever conducted in the country. This report describes the main findings of the study and draws conclusions about the prospects for the Indian domestic diamond jewellery market, based on De Beers’ historic market information and the context of broader macroeconomic and social trends.