India's diamond industry grew by 30% last year. Another 20% hike is expected this year. The recent diamond jewellery boom is old news. Here's the story of how a marketing idea that equates diamond buying with investing in mutual funds, a trading treaty with Zimbabwe, and your favourite Bollywood hero's sis-in-law are making sure you pick heera over sona
India's diamond industry grew by 30% last year. Another 20% hike is expected this year. The recent diamond jewellery boom is old news. Here's the story of how a marketing idea that equates diamond buying with investing in mutual funds, a trading treaty with Zimbabwe, and your favourite Bollywood hero's sis-in-law are making sure you pick heera over sona
Richie Rich isn't the only one wearing diamond studded cufflinks. De Beers, the diamond company headquartered in South Africa, involved in mining, manufacturing and trading of diamonds since 1888, made total sales worth $5,877million in the year 2010, a recovery from the previous year's sale of $ 3,840 million. A 53 per cent increase that the company terms as 'recovery' with a capital ka-ching!
While the US is still in stages of recovery, India and China have done surprisingly well, and are now tagged as two nations with strong domestic markets.
A casual flip through any Indian lifestyle magazine littered with diamond jewellery brand ads corroborates the tag. Orra, the Indian jewellery brand from the RosyBlue Alliance is going places, quite literally. With 31 stores in 21 locations around India, it's now set to penetrate smaller towns. New stores are coming up in Aurangabad, Nagpur and Bhopal next month.
And in April, their humble Borivli store will transform into a multilevel diamond destination. "Platinum is a big seller too. Diamonds of course, are seen as classy and elegant, which is what our brand also aspires to be," says Vijay Jain, CEO, Orra.
Sales figures indicate a demand for diamonds set in white gold and platinum. Gold is confined to select outlets like those in Pune, Jalandhar and some parts of south India.
As diamond buyers get younger, the occasion to invest in precious trinkets gradually moves from the once-in-a-lifetime big family wedding to an annual celebration like Valetine's Day.
Tanishq, the Tata group jewellery brand, recorded a sizeable profit during this month's V-Day sales. "We saw customers as young as 17 inquire about our Valentine's Day promotions, and pick up diamonds for their girlfriends," says Sanober Mannan, brand manager, Tanishq. 
Within the store, gold seems to have made space for diamonds, with almost 50 per cent display space across big metros set aside for dazzlers. And it's not just the big brands that are noticing the shift.
Opera House-based diamond trader Ruchir Agarwal runs Ruchir Enterprises, a family-owned jewellery trade. Gold is gradually turning into raw material, she claims. "Diamonds are the big new gift to give. In fact, we just received a corporate gifting order for 50 diamond broaches worth Rs 10,000 each. That's a departure from earlier when companies would distribute gold coins among business partners."
Industry experts say it's this robust domestic demand that saw the Indian gem and jewellery industry bounce back after the global economic downturn.
Sanjay Kothari has over 40 years of experience in the industry. As head of Kunal Diamonds, and Vice Chairman of the Gem and Jewellery Export Promotion Council (GJEPC), a non-profit organisation, Kothari plays the role of an advisor for players in the gem industry, helping promote trade for both, small family-owned businesses and large brands in the global market.
A platinum, diamond, ruby and topaz Cartier necklace dated 1928
is pictured at the Maharaja: The Splendour of India's Royal Courts
exhibition at the V&A museum in London, 2009. In 1925, Maharaja
Bhupinder Singh of Patiala asked Cartier to re-set some of his
jewels. Taking three years to complete, this remains the
biggest commission the Parisian firm has ever received from a
single client. Pic/AFP Photo
Net exports of gemstones from April 2010 to January 2011 saw a rise of 32 per cent as compared to the previous year, while imports increased by 35 per cent to cope with demand, GJEPC's annual report reveals. "Diamond sales grow annually at a steady two per cent. But at the end of 2010, we measured a 20 per cent rise. This is significant," says Kothari.
Marketing gurus at work
The consumer is tempted but still needs that tiny bit of coaxing to make a buy. Marketing managers are making you believe a purchase at their store is like investing in a mutual fund. Tanishq's Golden Harvest Scheme allows you to invest an amount as low as Rs 500 every month for 11 months, with Tanishq paying off the final installment, letting you purchase jewellery of your choice from the accumulated sum.
Orra follows an 80 per cent buy back policy on old diamonds with a reimbursement in the form of store credit.
In case you are looking for cash in return for the jewellery, there could be a deduction of between 10 and 20 per cent on current prices. Most jewellers say they offer a resale value of up to 80% of the amount the diamonds were bought at. Certified solitaires fetch a higher resale value, but these make a very expensive purchase in the first place.
The star power puff girls
Even if your mother manages to talk you into going gold because there is no investment quite like the trusted precious metal, Katrina Kaif flaunting a seven stone floral diamond cluster from Nakshatra's bridal jewellery collection, Bipasha Basu saying diamonds make her feel like a "girly girl" at a Gili launch, and Amitabh Bachchan sporting an 18-carat smile while endorsing the D'damas Solitaire collection insist you do a re-think.
But there's a far more subtle and powerful force at play. Bollywood's first ladies have penetrated the jewellery design studio, and are effortlessly dragging A-listers onto the ramp to make sure you want that canary yellow round diamond set that Sridevi wore with a Herve Leger dress for Queenie Dhody at India Couture Week. 
This Orra ad invites customers to invest in the Desire Kitty
Scheme by paying a monthly installment as low as Rs 2,000.
Farah Ali Khan is DJ Aqeel Ali's wife, actor-director Sanjay Khan's daughter and star Hrithik Roshan's sis-in-law. She is also one of the first independent designers to have emerged from the socialite clique. Farah Khan, her label, enjoys an exclusive Bollywood clientele and is often sported by Deepika Padukone, Dia Mirza, Sussanne Roshan, and Malaika Arora Khan.
Actor Sanjay's Kapoor's wife and Anil Kapoor's sis-in-law Maheep Kapoor showcased the MSK Maheep Sanjay Kapoor jewellery line at Couture Week, putting Sonakshi Sinha, Natasha Khan, Ayesha Takia and Bhavna Pandey on ramp. Close pals Gauri Shahrukh Khan, Karishma Kapoor and Kareena Kapoor are usual suspects on front row.
It's another stud in the Mahesh Notandass crown that stocks pieces by both celebrity designers. Notandass is liable to drop more than a few names with its popular ad campaign featuring former actress Neetu Singh and daughter Riddhima Kapoor in heavily set fine jewellery.
Former actress known for being most often paired with Govinda in the 1980s, Neelam Kothari joined the family jewel business when she set up Neelam Jewels, a line of handmade jewellery that caters to an affluent, niche group. She prefers not to dish out fashion advice because, "jewellery is a very personal thing", but does say that customers are increasingly seeking high quality gemstones, and opting for single statement pieces over entire sets.
Mumbai based Poonam Soni, who has been crafting signature statement pieces since 1989, agrees that buyers are leaning towards diamonds. "What we are seeing now is a crescendo of what has been building up for a while. Western trends and increased spending power have brought high end jewellery within reach."
The love factor
Tanishq's Valentine's Day campaign says there's no better way to say, "I love you" than of course, buy a trinket off their shelves. A special promotional campaign set the starting price of diamond trinkets as low as Rs 999. Mannan says, "We saw great results. Our focus is going to remain on diamonds for the next five years."
The Gitanjali group has always played the love card in ad campaigns. The most memorable perhaps is for Sangini jewellery, with stars Salman Khan and Kareena Kapoor sharing a couch that says "The best part of me, is you." They are not to be outdone by the recent campaign with bowler Shreesanth slipping a ring onto actress Riya Sen's finger in a campaign for Riyaaz.
D'dmas announced its Vivaha collection with Amrita Rao aptly surrounding the Rajshri film of the same name's release. "Gold is a huge tradition at weddings, and that will stay, but while 20 years ago, a trousseau had perhaps one diamond set, diamonds today are a large part of the bride's attire," says Soni. Love can sell anything, they say. And the guys who sell you dreams, agree.
"You see, love is blind. It has no rationale. So when you receive a product that you can't find a rationale for, just say it's a gift for someone you love. Roses and diamonds have no functional purpose. Diamonds are worse because no one except the guys selling it can tell the real from fake," says top ad filmmaker Prasoon Pandey.
Miner problem, major outcome
While 2008's global recession meant a drop in demand leading to a cut down in mining activity, a steady improvement in the market last year has caused a shortfall of supply, leading to a hike in prices, says Dinesh Navadia, president, Surat Diamond Association.
While India is responsible for eight out of every 10 diamonds cut, and its exports go to USA, Europe, Japan, Hong Kong and the Middle East, production of roughs within the country is confined to Madhya Pradesh. But the quality is mediocre, and sizes small.
And who'd think geo-politics has an impact on what stone you choose to sport on your ring. "International tensions increase pressures on the diamond pipeline," explains Vinod Hayagriv, Chairman, The All India Gems & Jewellery Trade Federation and Managing Director C Krishniah Chetty & Sons, one of Bengaluru's oldest jewellers.
The bright side is an expected supply of rough diamonds from Zimbabwe. Last month, Indian diamond processors were relieved after the Kimberley Process Certification Scheme (KPCS) approved Zimbabwe's proposal to allow exports of its rough diamond stockpile. KPCS that was launched to watch over rough diamond trade globally, had banned Zimbabwe from exporting rough diamonds since 2009 on allegations of human rights violations by its army in the diamond mines in the Marange region. Zimbabwe is said to have a rough diamond stockpile of over two million carats mined in the last few years.
"Thanks to Zimbabwe, the lower end of the supply chain makes diamond flow slightly smoother for Indian cutting factories. Zimbabwe is a large producer of rough diamonds and contrary to popular belief rough mining in Zimbabwe is both ethical and economical," says Hayagriv.
Pass it on, no returns
An old south Indian tradition says when you buy a diamond, keep it under your pillow. If it leaves you with a good night's sleep, it will bring you luck. Nightmares mean you must get rid of it.
Understandably, people aren't chucking out unlucky diamonds just yet. The perception of diamonds is changing with some help from enticing campaigns by diamond jewellery brands. "People are afraid they will be cheated on the value of a diamond, and are hence hesitant to buy," says Mannan of Tanishq. The brand launched their Diamonds of Class campaign to convince buyers that their stones are legitimately graded and of the finest quality.
De Beers adds its dose of authenticity with Forevermark diamonds, a collection of stones that comes with a Forevermark promise. "The best quality stones marked with a unique identification seal of approval ensures that the diamonds you buy are 100 per cent natural and conflict free," says Rajeshree Naik, head of marketing, Forevermark.
We guess the Kohinoor, once the world's largest diamond and the bitter fights among royalty to acquire it, might have had a role to play with associating the stone with everything regal. And then when you haveu00a0 Maharani Gayatri Devi of Jaipur endorsing Arisia solitaires as a favourite with royal women, the case grows a bit stronger. Once seen as treasure reserved for royalty, Indians are now warming up to the idea of owning their own booty.
"India has always seen owning jewellery as a tradition that can be passed on in the family. Gold's value is volatile. Diamonds are long lasting, therefore seen as valued. Their price steadily appreciates, even if it is only marginally, over time," says Kothari of GJPEC.
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