Core Question That Consumers Will Answer At Diwali

(IDEX Online News) – Indian jewelry retail has decide what it is selling – an idea that floats above the ups and downs of the economic marketplace, or merely a commodity that rises and falls with its every ebb and flow.

Gold and gold jewelry has for millennia been firmly in the commodity bracket. Diamonds, the relative newcomers, were introduced to the Indian consumer however, as an emotional symbol. So should retailers push diamond jewelry sales with economic value or emotions?

That question is going to be brought into sharp focus this Diwali as retailers contend with consumer hesitation in an uncertain market along with sky-high and volatile gold prices and a range of other consumer products that want to cash in on the festival sales season and are willing to offer free gifts and deep discounts to ensure that they do.

A symbol of emotion – that nonetheless carries as a subtext, the fact that it is a storehouse of economic value that will not only hold but actually increase its worth over time – has a strong sales driver working for it even in adverse economic circumstances.

The very backbone of the global diamond industry today is the diamond engagement ring. This segment, which has products ranging in price from the very low end to those that are the exclusive preserve of millionaires is driven by the institution of marriage. People get married all the time, regardless of the economic situation.

In India, where the open display of emotion between men and women is still something pretty new, it makes sense to infuse the diamond with an emotion other than that associated with the relationship between men and women. A symbol that represents the many roles that a woman plays in society is something that will find ready acceptance.

But diamonds are going to be sold this Diwali with nothing other than their economic investment value to drive sales. Business sentiment is currently on the rise and the rupee has strengthened against the US dollar. Diamonds are definitely an attractive buy when viewed in this light.

However the crucial question of whether consumers will indeed buy diamond jewellery – or any jewelry for that matter – in substantive quantities remains unanswered.

Indians bought a lot of gold but relatively little jewelry last Diwali. Bullion dealers and commodity exchanges were happy with this but it didn’t do anything for jewellery retail. And as time goes by, that economic driver might become even less relevant to the younger generation who will become the mature consumers of tomorrow.