The global luxury jewelry market was valued at 53.56 US$ billion in 2017 and is expected to reach 94.72 US$ billion by 2026, at a CAGR of 7.3% over the forecast period (2018–2026), according to a Global Luxury Jewelry Market Report, by Material (Gold, Diamond, Silver, Platinum, and Others), by Product Type (Necklace, Ring, Bracelet, Hair Ornaments, Earring, Leg & Feet Ornaments, and Others), by End User (Men and Women), and by Distribution Channel (Mono-brand Stores, Multi-brand Boutiques, Departmental Stores, Online Stores, and Others).
Increasing disposable income and consumer spending on luxury goods is fueling growth of the global luxury jewelry market. Consumers in the category of millennial and baby boomers prefer to spend on luxury products such as diamond or gold jewelry, owing to increasing disposable income. According to data published by Bureau of Labor Statistics, U.S. Department of Labor, the average annual expenditure on jewelry was US$ 106 in the U.S. in 2016. According to the same source, jewelry was the third largest item after wine and sweets, on which highest expenditure was made by consumers in the U.S. in 2016. However, changing fashion trends is expected to be a key challenge for growth of the market over the forecast period.
Manufacturers and retailers are required to offer updated designs of luxury jewelry to cater to changing preference of local and global consumers, in order to maintain their presence in the luxury jewelry market. Most manufacturers produce specific types of luxury jewelry products pertaining to the market demand due to lack of innovative designs and development centers. Moreover, changing fashion trends has led to decreasing demand for such specific type of luxury jewelry. This reduces the initial investment of manufacturers and adversely affects their business. Therefore, changing fashion trends is a major challenge for small and medium scale jewelry manufacturers and retailers.
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Key Trends and Analysis of the Luxury Jewelry Market:
- Among distribution channel, online store segment is projected to be the fastest growing segment throughout the forecast period. Online channel offers customer opportunity to order anything at a customer’s doorstep. Consumers have the option of comparing prices of different products on different websites and choosing from the various available options. Furthermore, online store segment offers options such as free shipping, home delivery, on-time delivery, and easy exchange and return in addition to discounts. Therefore, consumers are preferring online shopping over the offline buying model.
- Among end user, women segment accounted for largest revenue share in the global market in 2017 and the segment is projected to retain its dominance in the near future. Growing women working population and growing disposable income of women are the major factors driving growth of the women segment in the global luxury jewelry market. According to the U.S. Department of Labor, total annual median earnings of women in 2014 was US$ 40,168, which increased to US$ 41,554 in 2016 in the U.S. Moreover, women in work force was 72,722 thousand in 2013, which increased to 74,432 thousands in 2016 in the U.S.
Key Takeaways of the Market:
- In the U.S., luxury jewelry market is highly fragmented. Small & medium sized luxury jewelry manufacturers and international luxury jewelry brands such as Tiffany & Co. and Gucci are competing within themselves by selling luxury jewelry through their well-established supply chains and competitive pricing strategy. Mexico is projected to be the fastest growing market in North America luxury jewelry market over the forecast period. Factors such as economic recovery, political stability, and increasing awareness of luxury goods in terms of quality & status, especially in middle class households are projected to drive growth of the market in Mexico.
- Increasing government and private investment in South America is fueling growth of luxury jewelry market in the region. For instance, in April 2015, World Jewelry Hub (WJH) was inaugurated in Panama. WJH is the first dedicated trading center for diamond, colored gemstone, and jewelry. The aim of establishing WJH was to serve as the primary business center for the trade in South America, Central America, and the Caribbean, and the access point to the region for suppliers and buyers across the world.
- In the Middle East, luxury jewelry retailers are focused on investing in latest technologies and marketing strategies, in order to increase their sales. For instance, in July 2018, Pure Gold Jewellers, a jewelry retailer in the U.A.E, announced opening of seven new concept stores in the U.A.E, Kuwait, and Oman, with an investment of over US$ 10 million.