Forevermark, the diamond brand of De Beers, sees great opportunities in the Indian market and is massively expanding its business in India - this is the conclusion reached by the Rough&Polished correspondent after analyzing the recent data, events, and opinions expressed by the company's management.
On the one hand, India is a traditional gold culture where diamond gifts for a wedding or engagement are still considered a newfangled trend. On the other hand, a sharp drop in the value of Indian rupee (more than 7% over the last year), combined with an increased import duty has led to higher prices for the yellow metal and gold jewelry bringing about a more than 30-percent drop in demand for gold in India in the first half of 2012, according to the Wall Street Journal.
Add to that the large losses incurred by Indian companies due to fluctuations in the national currency exchange rate and the apocalypse experienced by the Indian agriculture, which employs 70% of the population (according to Russian online publication "Expert"), and you will see a difficult economic situation not too favorable for sales of high-end diamond jewelry.
However, De Beers is dead earnest in setting its sights on the Indian market and even doubled its initial forecast of India's share in the structure of international sales from 10% to 20%. In August, it was reported that in the next 5 years Forevermark expects 10 per cent of its global sales to come from India (Financial Herald). And in October, Dominic Brand, Worldwide Marketing Director, Forevermark, announced: “We are looking to grow to 20 per cent in the next year or two. That is why we are so rapidly creating consumer awareness.”
As the Rough&Polished correspondent found out, for deeper penetration and understanding of the cultural differences in the Indian market De Beers sought the services of an international marketing company, Added Value. According to Neil Martin, Head of Brand Planning at Forevermark, this collaboration “really opened our eyes to the market in a way that we may not have expected to put cultural context on all the insights we saw.”
Forevermark started to operate in India just a year ago. Neil Martin noted that De Beers had faced serious obstacles to entering the Indian market. “De Beers has a great heritage in India, but the Indian trade was skeptical about its brand Forevermark, which offers a completely different concept. In addition, during 3-4 years De Beers had not been active in the Indian market," Neil Martin explained.
“Despite the economic conditions, we are optimistic about India,” said Stephen Lussier, Executive Director, De Beers Group. Currently, Forevermark diamonds are on display in 65 stores across 11 cities in India. By the end of this year, the company plans to drive the number of distribution outlets to a hundred. According to various sources, Forevermark will cover 35 cities in the next five years.
Forevermark’s strategy is pursuing the following goals in India:
1) Accessing the second- and third-tier cities, particularly in the south of India, where the market is the briskest, simultaneously expanding the retail network.
2) Working with the target audience embracing high-income Indians, as well as distributing intent advertising messages.
3) Establishing an emotional bond with Forevermark diamonds. "Forevermark promise signifies beauty, inspiration and integrity that every woman stands for. My promises mean a lot to me," Priya Anand, the famous Indian actress, told the Times of India at one of the events.
4) Introducing the concept of necessity and functionality of a diamond as a symbolic gift on special dates in people's lives - weddings, birthdays or anniversaries. In other words, it is turning fashionable to talk about the transfer of the American "diamond dream" to the Indian land.
To implement these plans, Forevermark intends to launch a TV advertising campaign, which will be repeatedly broadcast via English-speaking TV channels, mostly watched by the brand’s prospect clients, according to an Indian advertising magazine, the Pitch.
In addition to TV advertising, Forevermark will spend a major part of their marketing budget to create digital campaigns. “We are going to spend a little bit more in the digital than we do in the traditional media. In digital advertising, innovative ideas such as iPad applications and trial facilities on our websites are in the pipeline,” said Dominic Brand, Worldwide Marketing Director, Forevermark.
As I believe, one of the main reasons for enhancing the De Beers diamond brand in the Indian market is India’s penchant for diamonds timely noticed and possibly even created by De Beers. Of course, a major role in the gradual shift of demand from gold to diamonds was played by high gold prices, the rupee depreciation and other above mentioned factors.
It is correctly formulated and timely circulated marketing messages which softened up the Indians towards diamonds making them a desired alternative to gold. After all, they could have switched over, for instance, to platinum and emeralds.
And indeed, why shouldn’t the world's largest diamond center turning rough diamonds into polished gems become the biggest market for their consumption? It is quite possible that we are now witnessing classy aerobatics on the marketing sky performed by Forevermak: to meet demand you have first to create it.
Dasha Platonova, Editor in Chief of the Asian Bureau, Rough&Polished
