This Diwali – Let us greet Challenges and Opportunities Equally.

CHALLENGES

Today, as the industry is witnessing a flurry of problems in the form of an economic crisis, lack of demand, inflation and general apathy towards diamonds in the minds of consumer. When the going gets tough, the tough gets going, this is specifically true in our industry.

Polishing industry – Manufactures are in tremendous pressure of excess supply and reducing demand.

No long term stability of Rough prices and high dependability on price lists of polished goods from international sources.

Less advertisement and promotional activities from natural diamond segments.

Limited ideas and efforts from local jewellery manufacturers and the government to encourage world-class jewellery manufacturing and exports.

The diamond pipeline has become heavy and which in turn has resulted in heavy bank borrowings.

NPA and Dissatisfaction leads to tight or no borrowings from banks for Gem & Jewellery section.

Narrowing down the business chain, wiping out of middlemen, brokers, and Wholesalers, Manufacturers getting into supply and also retail chain shops, direct to sale, Big company eating up maximum part of the cake, nothing left for smaller traders but to exit.

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The battle between synthetic and natural diamonds, Lab-grown synthetic diamond challenges natural diamonds in many aspects such as product, price, sustainability, and positioning with mined players out to challenge the status quo.

” Jeweller ka Beta ab Jeweller Nahi Banega” – Dilemma of G & J industry, as young mind’s thought process has changed tremendously. Vouching for fixed salary and smooth lifestyles, Fewer returns – high Risks and less encouragement from the industry for entrepreneurship.

The US-China trade war has taken the sheen off the Indian diamond trade. In July, cut and polished diamond exports have dropped by 18.15 percent, compared with July last year and for the first four months of FY20, the drop is 15.11 percent. As China’s economy going down day by day, so as to demand for diamonds, the Devaluation of Yuan-Chinese currency adding more challenges for Indian traders and manufacturers.

All the above issues portray a very grim and sad picture and status of our industry. However, I believe that we are in interesting time and whole world is changing. There are these and many more challenges but at the same time there are going to be new opportunities as well. The industry will have to adapt a new environment.

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OPPORTUNITIES

Everyone agrees that the growth is going to come from and moving forward, Therefore. We should be realigning our resources to take advantage of these new opportunities. Where we were an export industry, we should now be focusing on the huge potential of the domestic market.

The market in India is also very diverse and one can find all kinds of customers to buy all kind of variety of diamond, from the very best and the large stone to the cheapest of the cheap material. For the next few years think India will grow at around 7-8% and we’ll see big wealth creation.

I see that many of us will be taking advantage of this homegrown opportunity. I am also convinced that we’ll equally take advantage of the growing China market, Where Indian traders have deep-rooted and old operations already established in Hong Kong for many years now and as it’s a neighboring country as well.

There will be some consolidation in our industry which is quite natural and has happened in many countries. India will be moving towards a much more established and organised sector for Gem & Jewellery business. Many Indian companies may establish factories in Africa, Russia, and other countries, This will transform India into a major/premier trading center over and above a manufacturing center.

I see that many of the large companies will move into retailing of jewellers as well, to own and control the distribution and translate learnings of their business with matured retailers into the nascent market of India.

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Conclusion: To sum up, our diamond industry as we know since we started exporting diamonds since the late 80’s and early 90’s has changed and transformed dramatically, The model that worked in the past may not work moving forward. We all will have to change with the time and look for opportunities in the market or growth in other segments of the pipeline.

China is presently the world’s second-largest market for diamonds after the USA. India and China both the countries are the 2 largest emerging economies, lot depend upon trade relationship and growth of these two countries. When the global diamond industry is facing many challenges, it is important that India and China cooperate and work together.

Education will give lead to new entrepreneurs. This new generation and new entrepreneurs we’ll be making most of the opportunities as and when they present themselves, We’ll have to ensure that we are excited about the future in order to take advantage of the opportunities.

 

As long as there are women in this world, Diamonds and Jewellery will be purchased, gifted and adorned.