17 May 2018
Young consumers as well as the bridal jewellery and self-purchasing sectors are expected to drive growth in the platinum jewellery market in 2018, the Platinum Guild International (PGI) announced recently.
Citing the findings of its 2017 Platinum Jewellery Business Review, PGI also reported strong retail sales growth for platinum jewellery in the US, Japan and India last year, outperforming gold jewellery in some areas.
“We saw above-market growth for platinum jewellery in three out of four key markets in 2017. This trend is tied to a robust global economy and historically low platinum prices, which together with an increasing preference for platinum among younger consumers, indicates growth potential in the platinum jewellery sector in 2018,” noted PGI CEO Huw Daniel. The research was done by independent platinum market experts and industry analysts.
According to PGI, India has become the engine of platinum jewellery growth globally. Despite continued challenges from new legislations, the industry has seen retail sales reported in platinum ounces up 21 percent year-on-year for the PGI programme and fabrication ounce demand growing at 34 percent year-on-year compared to 14 percent year-on-year demand growth for gold jewellery (according to World Gold Council).
A strong preference for platinum among young consumers is one of the strongest contributors to the growth of platinum jewellery demand in India. For young India, PGI has created a distinct positioning for platinum versus gold, tapping into modern couples’ desire for jewellery that better represents the bonds of love in a modern relationship between equals. Through the Platinum Days of Love Campaign, platinum has become the metal of choice among today's young Indian consumers shaping the country's culture and fashion.
Bridal markets around the world have become strongholds for platinum jewellery across China, Japan, the US and newly emerging in India, revealed PGI.
In China, despite continuing market challenges at the total market level, PGI has seen strong growth in platinum acquisition in the core bridal category. According to a consumer study covering 55 cities in Tier 1 to 3, platinum bridal acquisition volume has increased by 22 percent compared to 2014. Platinum has become the dominant precious metal for wedding rings. However, with the industry facing continuous structural transitions and declines in marketing investment, China’s demand for platinum jewellery is likely to have another year of decline in 2018. China annual brand tracking survey shows that consumers strongly associating love with platinum and far ahead of other metals.
Bridal jewellery is a gateway purchase leading to subsequent platinum jewellery purchases for anniversaries, birthdays and milestone occasions, which provide opportunities for growth to be further explored in 2018. China’s strongest growth is fuelled by the rising consumer affluence of Tier 2, 3 and 4 cities where a new generation of middle class consumers is acquiring taste for Platinum Pair Rings exchanged during wedding ceremonies.
In India, the market is led by love-gifting with local organised retailers finding footholds for platinum within the gold-dominated wedding category. The introduction of a new branded segment, Platinum Evara, a modern platinum jewellery collection gifted to the bride and groom before the wedding day has carved out a distinctive niche for platinum and created a new jewellery segment for the industry.
In the mature platinum jewellery market of Japan, platinum holds an astonishing 92 percent share of the engagement ring market and 82 percent share of wedding rings.
Strong results for platinum in bridal are also mirrored in the West. In the US, the economic recovery and a bullish consumer sentiment has benefited the total jewellery industry, leading to the 5th consecutive year of growth for platinum jewellery consumption at 11 percent. The growth mainly comes from strong sales in bridal jewellery including engagement rings and wedding bands. In 2018, additional growth is expected to derive from initiatives promoting the use of platinum crowns that hold diamonds more securely, regardless of the choice of metal for the rest of the ring, along with increasing demand from the self-purchase category, which is likely to generate 8 percent to 11 percent of total growth in the US.
Although majority of the platinum jewellery sold is under the bridal sector, PGI USA has also introduced a new platinum collection of platinum-only, chain-based necklaces as part of the Platinum Born collection, to target women buying jewellery for themselves, in order to continue to optimise local market growth opportunity.
With the highest per capita consumption of platinum jewellery globally, in Japan platinum accounts for over 50 percent of total jewellery sales value. Growth is driven by a strong self-purchasing market led by females that have a strong affinity for platinum. Women generally control household finances and are increasingly staying in work after marriage and child birth. The resulting higher disposable incomes combined with historically lower metal prices, have led Japanese retailers to continue substituting white gold stocks for platinum, leading to an overall increase of 2 percent in retail ounce consumption. Retail demand growth is forecasted to continue at 1 percent to 2 percent in 2018 driven by moderate growth in self-purchasing category, especially for heavier products such as Kihei chains and religious objets.