With China’s strong economic growth in the first quarter of this year, jewellery demand in that country also increased, but platinum jewellery demand lagged behind other jewellery segments owing to a lack in innovative product and market-wide marketing support, says Platinum Guild International (PGI).
PGI, on Wednesday, released its quarterly ‘Platinum Jewellery Business Review’ saying that the outlook for Chinese consumption this year and over the coming years remains positive, driven by a growing middle class and rising income.
This has led to a change in consumer preferences along with increasing urbanisation, wider Internet penetration and retail competition, which will benefit consumption of high-end goods.
Meanwhile, India’s economy returned to strong growth in the first quarter of this year, and the implementation of a goods and services tax will continue to benefit the organised trade, while unorganised trade is likely to experience further pressure, says the PGI.
Platinum retail sales among partners outperformed that of gold and diamond jewellery.
PGI reported robust growth in the first quarter, mainly contributed by heavier products sold by retailers. Growth predominantly came from one of the PGI’s flagship brands Platinum Evara, and men’s jewellery increasing the average weight of platinum jewellery sold.
Japan’s economy, meanwhile, declined in the first quarter, ending the longest sequence of growth since 1989. Platinum jewellery sales by unit increased slightly, despite a marginal decline of total jewellery sales in both value and unit terms. Moderate growth is expected to come from nonbridal jewellery.
“Traditionally domestic retailers dominated Japan’s retail market, but some of the largest global retailers play an increasingly significant role in the local market.
"Although the market is relatively mature, high urbanisation levels and growing household income will continue to benefit retailers especially those selling premium and luxury goods,” said PGI.
Additionally, some leading retailers in Japan are planning to launch new platinum jewellery and related products in the second quarter, including the first platinum religious object.
The religious object is expected to have a positive impact on platinum demand, as one unit sale of such object is equivalent to over twenty unit sales of platinum wedding bands.
In the US, continued gross domestic product growth together with a low unemployment rate, strong consumer confidence and tax reform, have resulted in strong jewellery sales.
PGI USA’s Platinum Crown initiative presents an opportunity to make platinum crowns, which hold diamonds more securely, a part of conversation at retail level. These conversations are expected to result in conversion to complete platinum rings.
Platinum Born, the new branded collection of platinum jewellery from Japan to target female self-purchase, was launched at the Centurion Jewellery Show and has begun hitting stores in the US.
Platinum has mainly appeared in engagement rings and wedding bands, however, Platinum Born introduces a new category of platinum jewellery accessible to a range of consumers.
The combination of current platinum prices, major tax reform, historically low unemployment and a growing economy is driving continued business growth.
According to PGI’s yearly retail sentiment survey, the industry-at-large anticipates another strong year for platinum with a projected business increase of between 8% and 11%.