Jewelry has always been an important commodity during the holiday season; whether couples are looking to get engaged (because after all, December is the most popular month to pop the question), or whether a shopper is trying to find the perfect watch or necklace for his/her significant other, jewelry stores have long been known as hotspots for finding the perfect holiday gift.
And the same holds true for East Asian countries that are beginning to enter their holiday festival seasons as well. Despite recent declining gold and fine jewelry sales for Chinese and Indian markets, industry experts predict that the price of gold could begin to rise, due to increased demand caused by the beginning of the festival seasons for both countries.
In India, the Diwali holiday — which involves gift-giving — takes place at the end of October, and certain days in the beginning of December have long been considered “auspicious days for weddings,” according to a recent Forbes article on the Asian jewelry industry. In China, the Lunar New Year will be celebrated in February, and jewelers are already anticipating an increased demand for gold jewelry to begin around December.
Two other factors affecting experts’ predictions come from unlikely sources: politics and weather. A new Indian government has recently been elected, and because Indian Prime Minister Narendra Modi has put an emphasis on reducing food prices, jewelry industry mogul C.K. Venkataraman states that consumer confidence in the industry has begun to rise. This, in turn, can lead to greater spending on luxury items such as jewelry.
“Jewelers all around the world are well aware that the holidays bring their best sales of the year,” says Ruthanne Carroll, Marketing Director of Smyth Jewelers. “Holidays are such an emotional time of the year and people like to give ’emotional gifts,’ such as jewelry, to express their strong feelings to one another.”
And as far as the weather is concerned, economists are well-aware that the strength of Indian monsoon season largely determines how much money Indians are willing to spend (especially on non-essential items like jewelry). Fortunately, more than 75% of Indian regions experienced a normal monsoon season this year, meaning that agricultural output will be strong and, therefore, the majority of the population will have some extra income.
Although a stronger Asian jewelry market won’t necessarily influence the strength of Western markets, industry experts are still paying attention to how the Chinese and Indian gold markets are changing — and what’s causing them to change. The jewelry industry is, by nature, a global industry, and jewelry sales largely rely on national trends and events. Analyzing the causes of rising jewelry sales now will be able to help jewelers provide better in-demand products for their customers in the future, while keeping prices reasonable enough for the average consumer.
“I’m sure there are quite a few similarities between the Western and the growing far East jewelry markets, but right now I don’t see their markets affecting us in inventory or price. However that could change as their average incomes continue to grow and put demands on the industry,” says Carroll.