Dubai: The local shoppers’ overwhelming obsession with gold jewellery — in its 22-carat avatar — may have come to pass. These days, a good number of them are just as likely to commit to a diamond-studded purchase, where the decision is based on the aesthetic value of what that piece of jewellery will offer rather than just the investment returns it will give in future.
It is being reflected in recent transactions billed by leading retailers. Where earlier the average diamond jewellery sale would be dominated by transactions of Dh10,000 and more, it is steadily coming down to around the Dh5,000 mark at the lower end of the spectrum. (Some retailers are lowering the bar even further — a Dh2,500 jewellery set anyone?) A wider buyer base immediately translates into a greater depth for the local jewellery retail sector. And retailers are quite in sync with what is happening.
“Certainly, there has been increase in sales of diamond jewellery in the lower and mid pricing spectrum due to changing customer tastes and aspirations,” said Amit Dhamani, CEO and Managing Director of Dhamani Jewels, a retailer who only sells diamonds and other precious stones. “While the increase is predominately led by visitors, we are of late seeing the local consumer base getting more inclined. The average ticket range in the small to mid-range categories are between Dh5,000 to Dh30,000.
“For retailers and buyers alike, the present is a good time to indulge in a spot of buying. Loose diamond prices have been stable for quite some time now after the sudden and violent spike it went through in 2011. (It was brought about by supply shortages and led to increases of more than 20 per cent.)
“During the global crisis in 2008-09, diamonds prices — as with many other commodities — softened,” said Dhamani. “When stability came around in 2011, prices strengthened and kept that momentum. Now, loose diamond — and jewellery — prices have been stable and are at pre-2008 levels. Supplies are running at stable levels and the primary sources of rough diamonds has been consistent.”
For retailers, there are quite a few pluses from any marked gains in their diamond sales. An obvious one is that margins are definitely better than on gold jewellery, which are bound within a tight range as per local regulatory requirements. Another is that gold sales are increasingly getting cyclical and need to be backed up by massively mounted — and costly — promotions such as during DSF or DSS.
Malabar Gold & Diamonds has set a target of achieving 25 per cent of its total revenues from diamond jewellery this year, compared with 18 per cent last year. It was three years ago that the retailer introduced an exclusive diamond collection under the ‘Mine’ range.
“It has been difficult, but the cult of 22-carat gold domination is slowly being eroded,” said Abdul Salam, K.P., executive director at Malabar. “What we have done to win over more consumers is maintain as fresh an inventory of diamond jewellery as possible — this was done recently by starting a dedicated diamond setting for this at our Sharjah plant. This helps cut down on time needed to replenish local stocks, but the bulk of our jewellery design continues to be done in India and Hong Kong.”
