By Olivia Quiniquini
Buoyed by the more positive business sentiment at trade fairs this year, KP Sanghvi is banking on its jewellery collections and certified diamonds to usher in further growth over the next three years.
The market for polished diamonds and diamond jewellery is showing subtle signs of recovery after a prolonged period of sluggish growth due to global economic uncertainties, according to KP Sanghvi. Established in 1965, the India-headquartered vertically integrated company is one of the world’s major diamond and jewellery manufacturers.
In an interview with JNA during the September Hong Kong Jewellery & Gem Fair, Director Arvind Sanghvi pointed to good momentum in demand for loose diamonds from Hong Kong and mainland China through to Chinese New Year 2018.
“Business from Hong Kong and China has picked up since March, but buyers have adjusted their preferences. Where they used to buy VVS and VS diamonds, they are now focusing on SI goods. Clients are also shifting from GH-colour to IJ and even K-colour diamonds,” Sanghvi remarked. He added that certified goods from 30 points to 50 points have been moving well, especially in mainland China.
Other markets such as Europe and the Middle East have been largely steady, while the US could register a slight growth of around 2 percent for the company this year, he continued.
The diamantaire has also been concentrating on its jewellery business, which enjoys solid demand from the US, Europe and the Middle East. Vietnam and Brazil are next on the drawing board, though Sanghvi admits tapping new markets would take time.
The company’s jewellery production consists primarily of midrange diamond jewellery with commercial appeal. Its domestic and international design team continually develops new products to regularly provide clients with fresh and exceptional designs, said Sanghvi.
One of its latest releases is the KP Couture Collection of bridal jewellery and wedding bands. The collection features fine, intricate micropavé-set diamonds in two-tone gold jewellery. With prices ranging from US$500 to US$5,000 per piece, KP Couture jewellery pieces attest to the manufacturer’s design strengths and top-quality craftsmanship.
“You never really know what will take off in the diamond jewellery business. Sometimes you can come up with a design that seems okay. But then the market falls in love with it and that single design can account for up to 20 percent of your revenue,” Sanghvi explained. “It is therefore a must to constantly keep innovating and pushing the envelope on design and craftsmanship.”
Sanghvi identifies the company’s jewellery segment and its certified diamond business as the main growth drivers for the next three years. The diamantaire also intends to make further inroads in Hong Kong and mainland China.
“Our strategy is to always pursue organic growth. We aim to grow by 5 to 10 percent per year. In 2017, we only achieved a 5 percent increase but this year, we’re already up by 5 to 7 percent so far, thanks to positive indications in the market that are driving growth in both our jewellery and loose diamond segments,” he revealed.
Buyers are now slowly starting to replenish their inventory of diamonds and diamond jewellery, noted Sanghvi. Aside from renewed activity in the Hong Kong and mainland China markets for the loose diamond segment, the US is also showing promise for the upcoming Thanksgiving and Christmas holiday seasons, following a relatively positive JCK Las Vegas.
“While the diamond industry has definitely been going through challenging times, companies that are strong and have less leverage from the banks will survive. Those with a strong accounting system, a strong sales force and a strong manufacturing power will also make it,” he noted.