Market Overview
Despite the economic challenges, the European jewelry market has shown growth in 2018 and is expected to continue the same during the forecast period, 2019–2027. However, the number of weddings in the EU is declining. It dropped to 4.4 marriages per 1,000 persons in 2016 from 7.8 marriages per 1,000 persons in 1965, as per the data published by Eurostat in 2017.
Figure 1: European Countries with Most Marriages, 2018 (‘000)
Source: SR Analysis, Government Publications, and Secondary Research
Over 30,000 jewelers are active in the regional market, which is either specialized in rings/jewelry or a production stage. From the last few decades, Italy has remained a leading production hub for jewelry in Europe and holds more than 30% of total wedding ring production in Europe. After 2010, most of the EU manufacturers started to outsource their production to remain competitive and profitable in the market.
Europe is one of the prime importers of gems and jewelry in the world, and intra-European exports have been increasing immensely. In 2018, it reached more than 57% (comparing 51% in Europe). Apart from EU countries, China, India, and Thailand are some of the leading exporters of gems and jewelry to EU countries and hold more than 70% of total imports from developing countries (excluding imports from EU countries). Switzerland, France, Italy, and the U.K are the prime importers of gems and jewelry.
Currently, the online channel is holding a substantial share of the European jewelry market. However, offline channels are more commonly preferred for buying wedding rings as compared to other jewelry items. Cultural diversity in European countries compels manufacturers to adopt different marketing strategies, product development, and pricing strategies. For instance, French brides tend to wear vibrant gemstones instead of diamonds, while Irish brides wear Claddagh styling rings, which affects the pricing and product development strategies in different countries.
Market Dynamics
Frequent New Product Launches and Attractive Price Offerings by Local Players
The Europe wedding ring market is highly fragmented and dominated by unorganized and small national brands. One of the vital advantages of a fragmented market is the absence of a dominant company. The market comprises numerous national brands and very few international brands, including Tiffany & Co and Boucheron. Such a scenario represents lucrative opportunities for small players to grow in the market. To sustain in the market, most of the wedding ring brands offer products with competitive pricing and adopt attractive selling strategies, which somehow compel the consumers to spend more on their rings and other jewelry items.
Almost all of the national and global brands offer more than 100 types of rings, specially designed for wedding and engagement purposes. Affordable price, along with a wide range of variety, triggers the consumers’ buying decisions, which positively supports the growth of the wedding ring market. Furthermore, cultural diversity across several European countries leads to rising partnership agreements between global and local players to penetrate the market. Recently, Forevermark, a global jewelry brand, announced its plan to enter the European market—starting with Germany and France. Forevermark is also partnering with some of the local brands and designers, including Heinz Mayer, to serve the premium jewelry segment better.
Increased Spending on Wedding
Wedding is one of the most expensive events across the globe, and the average spending over a wedding was accounted for over USD 5,500. In the past few years, the wedding cost has driven up a notch due to shifting trend towards expensive and fancy wedding with added specific categories, such as wedding venue (USD+ 1,950), ceremony site (USD+ 652), wedding band (USD +545), and wedding jewelry. In 2018, the average wedding ring budget was valued at USD 33,931.
With the rising penetration of the internet and smartphone, players active in the jewelry industry have slowly started opting for this retail channel. Several manufacturers are introducing online websites and apps to cater to the online consumer. Moreover, the recovery of the global economy is boosting the expansion of retail and e-commerce sectors across the globe. For instance, the European e-commerce market was valued at USD 646.8 billion and is expected to grow with a CAGR of 12.7%.
Challenging Economic and Political Scenario
Ongoing trade barriers between the U.S. and China and the withdrawal of the U.K. from the European Union are affecting the regional wedding ring market. The economic downturn in Europe will affect the purchasing power of the consumer, which will further hinder the market growth. In Germany, the economy is moving towards recession and economic crisis. Strong measures need to be taken to avoid an economic fall down in the coming years. The last economic crisis in 2008 cost around USD 55 billion to the country.
Trade barrier policies from the U.S. and China have cumulatively affected the economic and political environment in Europe. This implementation of the trade barrier has struck China, Canada, and some of the EU countries with the same laws. For instance, the U.S. increased the import tariffs on Chinese goods by 25%, and China has also raised the import duties on U.S. goods by 25%.
3D Printing in Jewelry Industry
The concept of 3D printing was first introduced in 1980, and since then, the technology has witnessed tremendous growth. Today, the 3D printing machine has achieved efficiency in producing complicated designs and has become a key focus area for researchers and inventors across the globe. In addition, 3D printing technologies such as Computer-Aided Design (CAD) and Computer-Aided Manufacturing (CAM) have made a huge impact on the jewelry industry.
CAD and CAM enable jewelry software are used extensively to provide incredible design-flexibility, along with improved quality. The weight reduction of jewelry provides additional cost benefits to the end consumers. Currently, 3D printing holds around 8% of the total jewelry production across the globe and is expected to reach 38% by 2024.
The jewelry industry is highly fragmented and is mainly dominated by traditional jewelers. The ten largest branded jewelry group merely holds around 12.49% of the global market share. However, branded jewelry offering players are holding a relatively higher share of the Europe jewelry market than the rest of the world. In addition to this, these players have adopted 3D printing to a greater extent. Recently, egfManufaktur, one of the leading wedding ring brands, introduced on-site 3D printing projects for improving jewelry customization.
After understanding the potential of 3D printers, several manufacturers have started investing in developing a better 3D printer. For instance, Prodways Group announced plans to invest in new 3D printers, including SolidscapeDL that is specially designed for jewelry printing.
Segmental Analysis
Gold to Be the Most Commonly Used Metal for Making Wedding and Engagement Rings
Gold is one of the most expensive and commonly used metals for making wedding and engagement rings. It is witnessed that yellow gold, rose gold, and white gold is mostly preferred in wedding rings because of their malleable and durable nature. White gold is mainly available in two variants, 14k and 18k. Consumers are shifting their focus to buying this metal because it is more malleable and cheaper than platinum. Switzerland, the U.K, Germany, Russia, France, and Italy are some of the prime exporters of gold in Europe. As per the observatory of Economic Complexity, Switzerland exports 21% of the world’s gold, followed by the U.K with 4.9%.
Bridal jewelry is gaining momentum in the European market. In Germany, a wedding is considered a significant life event, and it includes several rituals and ornaments. Brides are increasingly wearing necklaces, bangles, and other related jewelry made from white, yellow, and rose gold. In Germany, couples wear a promise ring while dating and even after marriage. On account of this, the region is projected to witness significant growth in the demand for wedding rings. For instance, 2.2 million marriages took place in Europe in 2016, Eurostat. The gold segment generated about USD 6,584.0 million in 2018 and is expected to reach USD 8,175.6 million by 2024, with a CAGR of 3.7%.
Top Key Players
August Gerstner Ringfabrik GmbH & Co. KG
Fischer & Sohn KG
Roland Rauschmayer GmbH & Co. KG
Albert Wörner GmbH
NIESSING MANUFACTORY GMBH & CO. KG,
Breuning, inc
CHRISTIAN BAUER SCHMUCK GmbH Co. KG
Meister GmbH
Boucheron
Tiffany & Co, 123Gold
Others
