Platinum Guild International’s (PGI’s) February 2020 Insight report shines a light on how marketing can leverage shifts in demographics and steer consumer behaviour to create demand across consumer segments in India.
PGI reports that India has become the fastest growing platinum jewellery market globally, with demand having grown at a compound annual growth rate of 8% between 2013 and 2018.
A significant contributor to this growth has been the gemstone and jewellery industry, accounting for 7% of the country’s gross domestic product.
While traditionally a market for gold jewellery, Indians have already developed a strong appetite for platinum jewellery since PGI began market development in the country in 2000.
PGI says India’s strong and embedded jewellery culture has witnessed significant changes over the past decade, fuelled by demographic trends, which impact on consumption; the socioeconomic environment; and a changing retail landscape.
Indian people mark weddings, cultural and religious festivals and auspicious dates with jewellery purchases, which, coupled with a growing shift from a savings mindset to active consumerism, has bolstered the market, PGI points out.
It adds that urbanisation has also led to a shift towards households with higher disposable incomes and independent decision-making powers.
“India’s demographic advantage continues to spur growth through a large young working-age population, who are the chief wage earners of households. Educated, digitally connected and affluent, they are the key consumer opportunity in India, creating a shift from traditional values to more modern influences when it comes to purchasing decisions,” PGI explains.
It is expected that by 2021, 61% of India's 1.4-billion population will be below 35 years, and they are driving consumption across categories.
Platinum in India has built aspiration and relevance among this age of consumer, by building differentiation from gold through a strong emotional and image-driven equity, PGI points out.
It adds that platinum jewellery in India is seen as a symbol of love and an expression of commitment, making it ideal to mark milestone moments of love and bonding.
In 2009, PGI launched its Platinum Days of Love (PDOL) to appropriate spousal love-gifting, based on the insight that young couples desire love and intimacy within the contractual arranged marriage.
Platinum Love Bands, the products of PDOL, address consumers’ aspiration for modern, elegant designs and mark the discovery of love between a couple within the social norm.
The brand has built strong desire and preference among its core consumer group with values in a modern relationship to deepen the meaning of the “rare love” that platinum symbolises, linking back to the rare attribute of the metal says PGI.
“By highlighting values of friendship, respect, mutuality and equality in a relationship, brand marketing continues to initiate conversations and engage consumers on what defines a love that is rare, and befits a metal like platinum that is rarer than gold.
“As PGI’s first branded category in India, PDOL has created the foundation of platinum’s presence, and firmly established platinum as a symbol of love in India,” PGI says.
The brand footprint has grown to 1 487 stores in just ten years, as retail partners continue to see an irresistible business proposition in platinum. By driving strong ownership of the gift-of-love segment, the brand continues to appropriate milestones in modern couples’ relationships.
With weddings contributing 45% to the overall jewellery market in the country, PGI launched Platinum Evara in 2015 to create a place for platinum in the wedding jewellery segment.
The brand expanded the target consumers for platinum by including mothers, the key decision-makers at the time of the wedding.
Anchored in the bride’s parents’ aspiration for inclusive love and equivalence in relationships, the brand’s positioning is a symbol of parental love for the bridal couple.
PGI notes that each piece of Evara jewellery carries the signature platinum bond as a design element, speaking to the bride and reflecting her lifestyle and aspirations, and the bond of love between the couple and their families.
In terms of men’s jewellery, PGI says Indian men are not modest about wearing jewellery, with the average weight of men’s chains and bracelets being equal to the weight of up to seven rings.
With this in mind, PGI launched Men of Platinum in September 2019, with PGI ultimately hoping to reach six-million men in high-affinity consumer segments for platinum jewellery.
Despite the fact that India’s platinum jewellery market has grown at a fast rate, the country’s jewellery industry has experienced constant regulatory and legislative challenges since 2016.
PGI reports that, from January 2016, income tax identification became mandatory on all jewellery purchases over $2 950, while demonetisation was announced by the government in November 2016 – restricting access to cash impacted negatively on sales in the last quarter of 2016.
In 2017, India’s complex taxation system was replaced with a simpler, nationwide Goods & Services Tax (GST).
The Indian government introduced a GST of 5% on jewellery sales in July 2017 and revised the rate to 3% in August 2017. While the trade has been positive with the reduced rate, PGI says compliance requirements remain challenging.
Further, the Union budget for 2019 announced an increase in import duty on precious metals from 10% to 12.5%.
PGI, nonetheless, remains focused on ensuring an optimum stock mix with best-sellers to deliver better stock turn for the existing brands and unlock new consumer segments to tap into.