The Christmas and New Year season in the United States has given hope for India’s diamond jewellery exporters on better days ahead. The turnout of customers improved with each passing day, with retail jewellery sales showing a three to four per cent increase over last year.
However, some had expected more. The season was just okay, said Raju Jain, vice-chairman of the Gems & Jewellery Exports Promotion Council (GJEPC). Even marginal growth in US retail jewellery sales is significant, as a decline here, in the world’s largest economy, can’t be made up by in any other market. Christmas and New Year sales constitute over 25 per cent of US jewellery sales in a year (currently $100 billion). Of this latter figure, India contributes 34 per cent. For Indian jewellers, 30 per cent of their direct and 50 per cent of their indirect sales are made to the US.
Jewellers had started looking for alternative markets, including local ones and a fast-emerging Chinese market. But, they are finding it hard to compensate the US deficit after the world economic slowdown. According to Praveen Shankar Pandya, chairman of Diamond India Ltd and managing director of Revashankar Gems Ltd, Indian jewellers will turn to the US market again.
Overall, jewellery sales in the US rose by 5.6 per cent in November and December over the previous year. Retail sales between November 1 and December 24 showed a 3.6 per cent increase year. The rise in retail sales was fuelled by online shopping for jewellery which increased 15.5 per cent, and electronic purchases (use of credit, debit cards), which posted a 5.9 per cent increase.
“The season was merely okay and not up to the expectation. After a drowning 2008 season, the 2009 holidays were expected to compensate the loss of the previous season. Jewellery sales in the US were more regional this season,” said Mehul Choksi, chairman and managing director of Gitanjali Gems. About 150 retail shops of Gitanjali in the US contribute 12 per cent of its annual turnover.
India’s jewellery exports to the US declined by 20 per cent on the occasion of Christmas and New Year last year, due to the economic slowdown in the world’s largest economy.
The 20 per cent fall in jewellery exports helped ensure a 40 per cent slump in manufacture of jewellery from here, in the period between October (when Lehman Brothers collapsed and triggerred the slowdown) and December over the earlier year. Manufacturing has been especially hit in the gold industry’s prime areas, such as SEEPZ in Mumbai, which depends solely on US exports.
Source : Business Standard