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CIBJO DIAMOND PROMOTION ‘Need of the Hour’ Vasant Mehta Vice Chairman, Gem & Jewellery Export Promotion Council

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Page 1: Vasant Mehta

CIBJO

DIAMOND PROMOTION‘Need of the Hour’

Vasant Mehta

Vice Chairman, Gem & Jewellery Export Promotion Council

Page 2: Vasant Mehta

CIBJO

ContentCONTENT

Evolution of The ‘Luxury Market’

Diamond – The Epitome of Luxury

Diamond Jewellery – Current Scenario & Growth

Key Market Trends

Diamond Jewellery Promotion – ‘Need of the hour’

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CIBJO

LUXURY

LUXURY Latin - Luxuria, means the extras of life

Something Not essential but conducive to pleasure

Something Expensive or hard to obtain

The extravagant Material things affordable only by rich

In simple words the opposite of necessity

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CIBJO

Only the best of the best earned the name of luxury

And luxury was defined from the point of view of the thing itself

The product’s attributes, qualities and features qualified the item as worthy of the luxury label.

e.g a Rolls – Royce

The ‘OLD LUXURY’ refers to an object

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CIBJO

FROM 1900 TO TODAY HOW DEFINITION OF LUXURIES ALTER

1900 → Model T cars, pianos, radios, hand-

cranked Victorians 1960 →Stereo sound systems,

35-millimeter cameras, Diamonds

1910 → Fur hats, electric clocks, fountain pens, Cadillacs, Kodak cameras, transatlantic

travel

1970 →Designer jeans,

VCRs, solar homes EXEMPLARS, Diamond Jewelry

1920 → Fur coats, movie “talkies,”

gin, vacuum cleaners, washing machines

1980 → Vacation homes, BMWs,

microwave ovens, Diamond Jewelry

1930 → Baseball tickets, canned

foods, indoor plumbing 1990 → Flat-screen computer monitors, Palm Pilots, cell phones, SUVs, Diamond Jewelry

1940 →Televisions, air travel,

college degrees, refrigerators 2000 → International vacations, Ipods

LCD televisions, Electronic Gadgets, Spa’s

1950→ Color televisions, credit cards, visits to Disneyland, Convertibles

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CIBJO

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CIBJO

New luxury rather than representing an object is linked to a feeling

It is about the consumer’s experience

The ‘NEW LUXURY’

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CIBJO

Top Luxury brands

Top luxury brands

0

5

10

15

20

25

1

company

2005

bra

nd

val

ue

in $

mill

ion

s

Mercedes 20,006

BMW 17,126

Louis Vuitton 16,077

Gucci 6,619

L' Oreal 6,005

Chanel 4,778

Rolex 3,906

Porsche 3,777

Audi 3,686

Tiffany & Co 3,618

Hermes 3,540

Cartier 3,050

Moet & Chandon 2,991

Prada 2,760

Bulgari 2,717

Armani 2,677

Top Luxury Brands

Page 9: Vasant Mehta

CIBJO

• Educated

• More demanding

• More selective ( buying behavior)

• Looks beyond brand and labels, archetypes of old luxury

• Seeks emotional satisfaction

• Has more disposable income, and desire to make his life easier and less stressful

Today’s New Luxury consumer

Page 10: Vasant Mehta

CIBJO

Most popular items in personal luxuries

1. Clothes & apparel

2. Fragrances, cosmetics

3. Fashion accessories0 10 20 30 40 50 60 70 80

answers %

Automobiles & recreational vehicles

clothes & apparel

fashion accessories

fragrances cosmetics

jewellery

watches

pet products

none of the above

pro

du

ct

ca

teg

ori

es

personal luxuries

3 pre months 3 next months

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CIBJO

Most popular experiential luxuries

1. Dining

2. Travel

3. Entertainment

0 10 20 30 40 50 60 70 80

answers %

Travel

Dining

Entertainment

Spa,beauty treatments,cs

Home services

None of the above

serv

ices

cat

ego

ries

Experiential luxuries

6 next months

6 pre months

Diamond Jewelry significantly low in consumer preference for Luxury goods and Experience

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Diamond ‘The Epitome of Luxury’

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Origins of the engagement ring

Pope Innocent III1215

Fourth Lateran Council

Birthstones

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CIBJO

1938 19531948 1990s

Cullinan IX

Cullinan III & IV

Europe

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BUT WHY THE DIAMOND ?

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CIBJO

THE GREATEST MARKETING STORY EVER TOLD, BY MILLIONS

Page 17: Vasant Mehta

CIBJO

De

De Beers 3 Stone RingDe Beers Wedding BandDe Beers ‘ICE on FIRE’

Signature Round Brilliant Pendant

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The Global Diamond Mining GiantInfluenced RETAIL SALES of

Diamonds

Introduced Diamond As ASPIRATIONS

The ultimate in Luxury

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1967 The DeBeers Goes to Japan

1978 Diamonds for 50% of Japanese Brides

1981 Diamonds for 60% of Japanese Brides

Case Study: Japan

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Diamond Jewellery

Current Scenario & Growth

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8 Key World Jewellery Consuming Nations

CURRENT SCENARIO

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28.7

31.9 31.5

34.01

26

27

28

29

30

31

32

33

34

35

2003 2004 2005 2006

Retail Sales of Diamond Jewellery in USA

USA

% GROWTH (over previous yr)

2004 : 11.5%2005 : -1.25%2006 : 7.97%

Page 24: Vasant Mehta

CIBJO

8.5

8.75

9.76

10.14

7.5

8

8.5

9

9.5

10

10.5

2003 2004 2005 2006

Retail Sales of Diamond Jewellery in Japan

JAPAN

% GROWTH (over previous yr)

2004 : 2.94%2005 : 11.54%2006 : 3.89%

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CIBJO

KEY MARKET TRENDS& THE NEED TO PROMOTE DIAMOND JEWELLERY

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CIBJO

Diamond & Diamond Jewellery as a LUXURY and its prioritisation in the list of Luxury Goods in Consumer Mind space has been usurped by

other Products

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LUXURY TODAY

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LUXURY TODAY

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CIBJO

LUXURY TODAY

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LUXURY TODAY

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USA World’s largest DIAMOND JEWELLERY

consuming NationUndergoes RECESSION

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CIBJO

DTC reduces AD SPEND on

Generic Diamond Promotion

KEYTRENDS

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Emergence of a SUBSTITUTE

Synthetic Diamond

Reach US$ 2Bn at wholesale by 2015, almost 7% of the market

Usurp close to US$ 6 Bn of natural diamond sales at retail level by 2015

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CIBJO

While other Luxury Products are growing and

expected to grow at 10% – 15%

Diamond Jewellery will be the slowest growing

segment at a CAGR of 3.3%

Source – KPMG Vision 2015

Page 35: Vasant Mehta

CIBJO

In 1960, Shift Happened• Diamond Jewellery• Automobiles• Clothing & apparels• Cosmetics and beauty

products• Travel & Tourism

In 2006, Shift Happened• Mobiles• Travel & Tourism• Automobiles• Clothing & apparels• Cosmetics and beauty

products

TOP 5 LUXURY PRODUCTS

Page 36: Vasant Mehta

CIBJO

In 2015, We Can Make the Shift Happen

Diamond JewelleryMobiles

Cosmetics and beauty products

Clothing & apparels

Travel & Tourism

Page 37: Vasant Mehta

CIBJO

NEED OF THE HOUR

I call upon all stakeholders to unite together and drive the generic promotion of diamonds and

diamond jewellery worldwide zealously to drive the growth of the category

CIBJO

Page 38: Vasant Mehta

CIBJO