DUBAI // As the global financial downturn paralyses economies around the world, Middle Eastern jewellery retailers say the industry is due for a massive expansion as investors seek alternative assets and global retailers look to capitalise on regional consumer confidence. Already a hedge against inflation, demand for diamonds, gold and other jewellery is growing in the Middle East, China and India as buyers seek more stable alternatives to the financial markets.
"There has never been a better time to buy," said Varda Shine, the managing director of the Diamond Trading Company (DTC). "In times of uncertainty, consumers will buy more carefully." The Middle East is the third-largest consumer of diamond jewellery in the world. Retail diamond jewellery sales in the GCC alone bring in an estimated Dh7.34 billion (US$1.99bn) a year and are expected to see a significant increase this year despite the global sales slump, according to the Dubai Chamber of Commerce and Industry (DCCI).
"This country works with its own dynamics," said Amit Dhamani, the managing director of Dhamani Jewels. "We have a combination of customers from various nationalities here, which is driving business." As some of the world's developed countries struggle to stay afloat in the economic turmoil, jewellery retailers from around the world are embracing the region's comparatively confident consumers. As a result, Dubai is working to establish itself as a global hub for the diamond trade.
In April, a landmark initiative between the Dubai Multi Commodities Center (DMCC) and Damas Jewellery was unveiled, making Dubai the first government in the world to certify gemstone authenticity using a rare technology for grading and certifying diamonds in a way the human eye can never match. It is hoped that diamond certification will serve as a sales catalyst in this turbulent period for gold and jewellery prices. "We don't read enough internationally about what is going on here," said Peter Meeus, the chief executive of the International Diamond Laboratories (IDL), the subsidiary of the DMCC responsible for diamond certification.
"We sometimes forget that growth is produced by people, by companies who have put together real, phenomenal success stories over the past two years." According to Mr Meeus, the region is witnessing an explosion in retail space, with 6 million square metres available in the GCC and more than 4 million sq metres in development. The total is projected to top 16 million sq metres by 2015. Delegates gathered today in Dubai at the first Middle East-China Diamond and Jewellery Summit cited the massive buying power of the region's younger generation as a key to their success.
"Currently, in the Middle East, North Africa and South Asia region, there are 600 million people under the age of 20 - that is more than the entire European population," said Mr Meeus. "The industry has for so many years neglected the young generation and neglected the atmosphere to invite them and bring them back to our industry," added Tawhid Abdullah, the chief executive of Damas, the region's largest jewellery retailer.
"There is, therefore, a need to create fashionable, trendy, young jewellery." firstname.lastname@example.org