JEDDAH — Despite the economic slowdown brought about by persistent weak oil prices and the prevailing geopolitical straits, Saudi Arabia’s jewelry market, which is the single largest jewelry market in the Middle East, remains unperturbed and continues its upward trend.
Based on the expansion plans of major foreign players in the industry, the Kingdom’s thirst for gold and diamond-studded jewelries stays insatiable, hence, major plans are in the offing to satisfy the robust consumer demand.
Production turnover is expected to increase at 10% CAGR to reach SR5.6 billion in 2018.
Renowned players like Joyalukkas Group, Malabar Gold & Diamonds’ and jewelry retailer Damas have they eyes focused on expansion plans in the Kingdom.
Damas has set its eyes on a Saudi sparkle through an ambitious expansion of its store network in the kingdom. This, the company believes, will deliver higher sales growth and more than compensate for the slowing down the sector has been facing in the UAE.
“We are halfway there in Saudi Arabia, with 20 shops opening in the last 18 months to take the total to 40 by end-2015,” said Anan Fakhreddin, CEO. “More will be added, with a new shop getting added every other week. By mid-2017, with the Saudi expansion in place, it can deliver on the kind of growth we aim for.”
The timing of the Saudi pivot is interesting. The kingdom’s retail sector has been experiencing the same crunch as in other Gulf markets, brought on by the steep dive in oil prices and the fallout this had on consumer spending habits.
When shoppers get thrifty, jewelry buying is not a priority. The latest numbers from the World Gold Council for Q1-16 confirm this is the case with Middle East buyers and similar to the trends in China and India. Even for the whole of last year, jewelry sales had been on a slippery slope.
Malabar Gold & Diamonds, which has already nine outlets spread across KSA, is now introducing its 10th outlet in the Kingdom on Sunday (May 29) in Jeddah.
This is Malabar Gold & Diamonds’ second showroom in Jeddah, with the first showroom operating at Gold Souk, Al Balad.
The outlet unveils a significantly large collection of traditional as well as contemporary designer jewelries.
Joyalukkas commitment for growth and expansion continues in the year 2016. This year the ‘World’s Favorite Jeweler’, has planned to open more.
Joyalukkas has also started the year in the festive spirit for its customers with new exciting promotions, wherein jewelry lovers get the opportunity to purchase a host of exciting designs.
Customers at the Joyalukkas showroom in Dammam located in Lulu Hypermarket can enjoy world-class collections in stunning designs, as well as irresistible offers and surprises, such as Free 2-gram gold coin on purchase of diamond, polki and pearl jewelry and free quarter gram gold coin on purchase of gold and precious stone jewelry, zero deduction on exchange of old 22K gold jewelry.
“This new showroom is part of our plans to expand our reach further to be more accessible to our customers and continue offering only the best in products and services,” Joy Alukkas, chairman & MD Joyalukkas Group, said.
Increasing demand has been recorded due to growing per capita income levels. The growth in urban population coupled with rising awareness about different types of jewelry is expected to propel gems & jewelry demand in these countries through 2019. Gold jewelry dominated the global gems & jewelry market in 2013, in revenue terms. However, during the forecast period, diamond, platinum and costume jewelry are also expected to gain market share.
According to “Global Gems & Jewelry Market Forecast and Opportunities, 2019”, the United States continues to be the largest gems & jewelry market worldwide. The country is also the largest global consumer of diamond jewelry. However, regionally, Asia-Pacific accounted for the highest revenue share of the global gems & jewelry market due to growing demand from countries like China, India and Japan. As a result, global gems & jewelry market is anticipated to grow at a CAGR of about 6% during 2014-19.
With a value of SR6.4 billion in 2012, Saudi Arabia is the single largest jewelry market in the Middle East, soaring by a 21% annual rate over review period.
Value of imports reaches SR2.4 billion in 2012, penetration up slightly to 19%. Domestic production revenue expands by 17% annually on average over review period, reaching SR3.2 billion in 2012.
Exports account for 17% of total jewelry and related articles’ output in 2012; the United Arab Emirates is Saudi Arabia’s largest export partner. – SG
