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The age of rock
New and affordable collections are making diamonds a young girl's best friend.
A diamond for Rs 500? No, you're not dreaming. To lure more customers into buying some bling, jewellery brands are now looking to catch them young. Tanishq recently test-launched 'teen diamonds' under the brand name of FQ in Delhi, Pune and Bangalore. The collection, with teeny-bopper names, like 'nettygeek' and 'bubbles', starts at Rs 499 and goes up to Rs 4, 999. At such prices, it's little wonder that diamonds are finally giving gold, India's metal of choice, some stiff competition. Sky-high prices of the yellow metal and the promise of better returns on diamonds are pushing up the sale of diamond jewellery. According to Nirupa Bhatt, managing director of the Gemological Institute of America (GIA), the demand for diamond jewellery in India has increased remarkably over the past few years, and the country is now the third largest consumer market in the world. In fact, India and China are fuelling the demand for these precious stones worldwide. A Bain & Co report for the Antwerp World Diamond Centre states that diamond prices are poised to rise as their demand is poised to grow at double the pace of supply through 2020 because of expanding middle class populations in China and India.
Jewellery designers agree that Indian consumers have taken a new shine to diamonds. Tarang Arora of Amrapali says that the demand for rocks among his clients has gone up roughly by 10 per cent in the past one year. "Especially for flat cuts as they are more affordable and accessible, " he says.
Ishita Moitra, a spunky 28-year-old scriptwriter based in Mumbai, has been saving up to buy a solitaire. "I want to buy diamonds but not the small ones. I already have two diamond nose pins but a solitaire will do wonders for my style and personality. I want its lashkara on my nose and fingers, " says Moitra. With the price difference between diamonds and gold having narrowed, consumers are choosing to spend big bucks on diamonds instead of gold. A 10 g gold ring (22 carat) will cost approximately Rs 30, 000. Add another Rs 5, 000 and you can get a 5-carat diamond ring.
It not only makes economic sense but is a style statement too. Aparna Joshi, a 31-year-old IT engineer working in Hyderabad, loves to team up her one carat solitaire pendant and smaller diamond ear studs with a pair of jeans and a tee, a wrap dress and even a sari. "Diamond jewellery has a neutral tone which lets you carry it off with so much more in your wardrobe than your mother's traditional gold pieces. "
The reason why Indians always invested their money in gold was that it assured them good returns. Diamonds, on the other hand, were seen as a bad investment choice because there was no guarantee on their quality. In fact, many jewellers used to float schemes that allowed the buyer to sell these rocks back to them later if they didn't like them. Now, almost every diamond purchased from a trusted shop or a website comes with certification. And good quality diamonds have always promised handsome returns.
According Rapaport's Diamond Price Statistics Annual Report 2011, every $1, 000 spent on a 5 carat diamond 10 years ago would have returned $1, 645 in 2011.
"Over the last few years, we have seen a trend towards people purchasing diamonds as a long-term investment. As the price and the intrinsic value of diamonds increase on the world market, it is being increasingly seen by prudent investors as a viable long-term asset, " says Bina Goenka, a Mumbai-based jewellery designer. The overall price appreciation of diamonds for 2011 was 19 per cent. In comparison, gold appreciated at just 8. 9 per cent, much less than its 10-year appreciation average of 18. 7 per cent. Interestingly, the appreciation rates of smaller diamonds (0. 5 carat to 1 carat) were higher than those of larger rocks (3 carat to 5 carat). Historically, it's always been the opposite.
Clearly, there's a bigger market for smaller diamonds. Tanishq's FQ range, for instance, uses tiny diamonds that give off a lovely sparkle. Take the quirky 'WT Fish' bracelet in the collection has WT etched on a silver fish-shaped dial studded with three tiny diamonds near the fish's tail. Or the gold-plated flip flop charm studded with a single small rock. "The response to teen diamonds has been encouraging, " says Suparna Mitra, business head-South for Titan Industries Ltd.
Fashion movement towards lighter pieces of jewellery with minimalist designs, aided by the availability of advanced machines that are able to cut and produce very light ornaments, has also pushed the case for diamonds. In Mumbai, the world's biggest diamond hub, college girls are showing an increasing penchant branded diamond jewellery. Farah Khan, a well-known jewellery designer says, "Branded diamond jewellery and contemporary designs are what appeals to the younger crowds. " Her trademark 'FK' logo can often be seen hanging from delicate bracelets studded with small diamonds.
Another reason why diamonds are becoming popular is that it is being showcased in affordable jewellery. Traditionally, 18 carat gold, which is 75 per cent pure, is used for mounting diamonds. But now with the soaring prices of 22 carat gold, manufacturers are using 14 carat instead. "What also helps to control the price is the quality of the rock, " says Gaurav Issar of jewelsnext. com, an online jewellery store. There's a wide price range available in the market. "For instance, rocks mined in Zimbabwe cost much less than those mined in South Africa, " says Issar. On his portal pieces costing between Rs 25, 000 and Rs 55, 000 get picked up the most. "Most of my buyers are single working men and women. "
This trend can be traced to the fact that diamonds carry huge aspirational value in India. Historically, it was the royalty - the flamboyant maharahas, maharanis and other aristocracy - who owned bedazzling collections of rocks. For instance, the famous Indore Pears, made with 46. 95 carats and 46. 70 carats each, which according to lore Maharaja Tukojirao Holkar (1795-1797 ) gifted to his third wife. Or the massive 'Patiala necklace' commissioned by Maharaja Bhupinder Singh of Patiala in 1928 and created by Cartier, which included the world's seventh-largest De-Beers diamond of 234 carats.
Higher disposable incomes are also driving the middle class towards diamonds. According to market research firm IMRB, urban incomes in India in the last decade rose by 100 per cent and incomes of urban women by 111 per cent.
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