Better margins, higher premiums: It’s time for the Middle East to jump on the coloured gemstones bandwagon

After suffering significant damage during the pandemic in 2020, the gemstone and jewellery industry is again experiencing a recovery in demand. The demand for coloured gemstones are rising from their foetal stage to full-blown adolescence. This is the story globally. There are a number of reasons for this, which vary from person to person and even region to area, and include everything from their beautiful and opulent beauty to their originality and uniqueness.

How the coloured gemstone wave spread globally

Overseas nations with a sizable upper-class population have long been considered potential markets for coloured-gemstone jewellery. However, demand for coloured gemstones has surged in emerging nations in recent decades, with the majority of middle and low-income countries reporting an increase. Many factors are influencing the shift in demand, including the effect of social media, growing middle-class wants for a lavish lifestyle, and an ever-improving standard of living.

The pandemic effect

While the pandemic saw a shift in people’s investment patterns, there was also a shift in trends in the gem and jewellery industry. While gold prices went up and people saw it as a valuable investment option, the popularity of diamonds and coloured gemstones also reached a new high. People started looking at coloured gemstone jewellery across the world for their vibrancy. The pandemic has been a drab period for many. While the horizon looked grey for everyone because they were stuck at home, the coloured gemstones spelt vibrancy and positivity that people could not find in the whiteness of diamonds.

Why the Middle East needs to jump on the trend

The popularity of coloured gemstone jewellery is catching on globally. The market in the Middle East has always looked at coloured gemstones as a lower rung in jewellery categories. However, there is a rising premium to these products and that is evident in how emeralds and rubied are being auctioned off my mining companies at unbelievable prices.

The concept is similar to an art piece in an auction. It earns its price based on its unique beauty. Retailers in the Middle East can grasp on to the concept and earn premium returns on coloured gemstones based on its uniqueness. These are mined stones, so each piece has a story, which can be leveraged beautifully.

Coloured gemstones are attracting the attention of diamond market investors, who will benefit from the rising industry. They are attracting a lot of international money from the diamond industry. They are increasingly commanding high prices, with one Colombian emerald collecting a staggering $5.5 million at a Christies auction in 2018 —- just one of many signs that diamonds are no longer the sole god’s treasures.

How do you sell them?

Ashish Garg, head of business, of KGK Group, Dubai and board of director of Dubai Gold and Jewellery Group, says that the secret to selling coloured gemstone is no rocket science.  He quipped how the KGK Group is born out of coloured stones and has done brilliantly in the Middle East.

“We emphasise and develop products that sell well and make margins. There is a need to build a vision or understanding that unique coloured gemstones can fetch $2,000 or $20,000 a carat. Today, vibrancy of colour in jewellery is a trend. It has helped people selling colouredgemstone jewellery make more margins and sell more. It made a huge difference. Build a story around your coloured gemstone pieces. With mining companies auctioning goods in Dubai, there is a better understanding now that this kind of jewellery has more variety and is more valuable,” he said.

It works better because every gemstone has a story of origin that millennials are very interested in now. The traceability story alone pushes the price up and helps in earning a premium.

“Traceability is important for millennials, just like De Beers Forevermark has done. The market, in general, should adopt this. People don’t want to understand traceability and sustainability and they need to be made aware. Once jewellers start doing this with coloured gemstones, there is no stopping them. There is a market at home and abroad,” he said.

To conclude

While the Middle East has been known as the hub of jewellery, it is high time they make the most of the coloured gemstone trend. All it requires is awareness and knowledge that jewellers spread best. Buyers are really going for the beautiful natural gemstones. Most of the top 10 lots are emeralds, rubies and sapphires.

Coloured gemstones have a longer history and can be more valuable than diamonds. At auction, a red ruby fetches more per carat than a white diamond. However, unorganised players have long dominated the colourful gemstone business, which had put a dent to its popularity. The moment has arrived to organise ourselves, and reap the benefits of a market area that has yet to be fully tapped to its potential.

Image Courtesy: BBC

Courtesy: Retail Jeweller World News