Luxury Jewelry Market

Market Overview

The global luxury jewelry market size was valued at USD 45.39 billion in 2022. It is estimated to reach USD 89.98 billion by 2031, growing at a CAGR of 7.9% during the forecast period (2023–2031).

Jewelry expresses a person's orientation. The luxury good of jewelry serves as a link between lower- and upper-income class groupings. The word "luxury" is used to describe jewelry that is of the finest caliber. These products are seen as more extravagant because they frequently use precious metals and gemstones significantly more expensive than those found in other, lower-quality items. Precious metals like gold and diamonds are used to make luxury jewelry.

Luxury jewelry may be described by how the stone is cut, how well it is rated overall, or by the level of craftsmanship used in the stone's cutting and the making of the jewelry item itself. As a result, a piece of jewelry that is seen as wealthy typically costs more than one that is not. The price tag is not the only factor determining the luxury level in jewelry. Nevertheless, the cost of these items is typically higher.

Highlights

• Rings dominate the product segment
• Women dominate the application segment
• The offline channel segment dominates the distribution channel segment
• Asia-Pacific is the highest shareholder in the global market

Market Dynamics

Global Luxury Jewelry Market Drivers

Rising Demand for Gender-Fluid Jewelry

Gender fluidity has become more common than ever. It is estimated that 35% of Gen Z know someone identifying themselves as non-binary. Consumers are not just buying jewelry for special occasions but also for themselves. In addition, Gen Z is especially resistant to labels or classifications. This has allowed brands to target products for individuals and occasions. For instance, London-based jeweler Shaun Leane is a pioneer in gender-fluid jewelry. His brand has seen a rise in demand for bespoke engagement rings from gay couples.

Brands offer new-age designs by blending feminine and masculine patterns and cuts. In 2020, Louis Vuitton introduced LV Volt, a unisex jewelry collection featuring the iconic LV initials on rings, bracelets, pendants, and bangles in gold and silver. According to a 2020 study by Taylor & Hart (a bespoke jewelry brand), published in the Jewelry Magazine, there has been a 228% rise in demand for gender-fluid jewelry and a 69% increase in year-on-year interest in male engagement ring designs, showing a shift in buyer behavior. Such factors are expected to boost the market growth.

Rising Demand for Sustainable Jewelry

Sustainable and ethically made jewelry is rising due to the demand from millennials and Gen Z consumers worldwide. With increasing awareness about sustainability, consumers seek products that are made of recycled materials. Many modern jewelers use recycled gold, while brands such as Vieri and Lilian Von Trapp work exclusively with it. Fine jewelry purchases will be influenced by sustainability considerations, leading to a dramatic growth of sustainable jewelry.

Some sustainable trends in luxury jewelry include lab-grown diamonds using renewable energy, ethically sourced traceable gems, recycled or ethical metals or ecological gold, restoration of vintage/secondhand pieces, ethical employment through the supply chain, and preservation of craftsmanship. According to ExJewel, in 2020, searches for "ethical diamond" or "ethical jewelry" increased by 75%, year-on-year, whereas for "lab-grown diamonds," it increased by 83%. This suggests that consumers constantly pursue ethical buying behavior, thereby driving market expansion.

Global Luxury Jewelry Market Restraint

Fluctuating Prices of Raw Materials

Raw materials such as gold and platinum are widely used for manufacturing luxury jewelry. Gold is widely used for making fine jewelry; hence, the price of gold is extremely important for luxury jewelry manufacturers. The COVID-19 pandemic has led to a constant rise in the prices of gold owing to the disruptions caused in the supply chain of raw materials owing to the blocked trade routes and worldwide lockdown. The luxury jewelry industry also witnessed a decline in product demand amid the surging prices of gold. The price of platinum, one of the most popular precious metals for high-end jewelry, is also rising, impeding market expansion.

Global Luxury Jewelry Market Opportunities

Increasing Wealth of Women

Nowadays, women are the most powerful consumers in the world. Women's labor force participation has been steadily rising, resulting in an increased income. According to Credit Suisse, women's share in global wealth has increased over the past few years, accounting for around 40% of the global wealth in 2018. The increase in women's wealth is fueled by changing lifestyles, higher literacy, and increased labor force participation.

Additionally, with the increasing income level of women in most developing countries, women in these countries want to lead similar lifestyles to women in developed countries. The number of affluent women in developed countries such as the U.S. and the U.K. is increasing as these women are the biggest spenders on luxury products. According to a study, high earners or affluent women account for 25% of the U.S. population, presenting major brands with unique opportunities as they account for 40% of consumer spending.

Regional Analysis

Based on region, the global luxury jewelry market is bifurcated into North America, Europe, Asia-Pacific, Central and South America, and the Middle East and Africa.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global luxury jewelry market shareholder and is anticipated to exhibit a CAGR of 8.4% during the forecast period. The global luxury jewelry market is primarily controlled by Asia Pacific, with China and India being the region's two most significant jewelry markets. The prominent factors associated with the market growth in this region are the latest designs and the demand for high-quality jewelry among elite customers. In addition, integrating emerging technologies, such as computer-aided design in jewelry manufacturing, drive the Asia-Pacific luxury jewelry market. The growing focus on visual appeal, the power of social media, and the widespread tendency of internet browsing among consumers also result in market growth.

Furthermore, the presence of many top global players, such as Tanishq, Malabar Gold and Diamonds, Qeelin, and Wallace Chan, in the region significantly impacts the consumption of luxury jewelry. For instance, in July 2020, according to data by the India Brand Equity Foundation, the Indian luxury jewelry market is estimated to be amongst the largest contributors to the global market, accounting for 31% of global consumption. The popularity of wearing expensive jewelry on occasions such as Diwali and Chinese New Year is likely to propel the expansion of this market over the forecast period.

North America is estimated to exhibit a CAGR of 6.3% over the forecast period. The demand for luxury jewelry is significantly high in the North American region due to consumers' high disposable incomes. The region is an important destination for luxury tourism, which makes it a unique market for retail luxury jewelry. The growth of e-commerce, especially since the outbreak of COVID-19, has also benefitted the market for luxury jewelry. Easy access to information such as product design, price, and quality, as well as sourcing raw materials through online sources, are some major benefits of e-commerce. In addition, with the COVID-19 pandemic disrupting physical store sales across the region, the e-commerce space stepped up to the plate to ensure market stability. Online sales of luxury jewelry saw a rise during this time.

North America is also the largest market for brands such as Pandora, Tiffany & Co., Chopard, Blue Nile, Signet, Cartier, and Harry Winston. The region is the largest of Pandora's 10 geographical clusters and includes 500 concept stores and 1,500 points of sale in the U.S., Canada, and the Caribbean, further fueling the market expansion.

Economies in the European region, including the U.K., Germany, Sweden, and France, have been set back by a renewed surge in infections and COVID-related restrictions, negatively affecting the luxury jewelry market. However, luxury jewelry brands in the UK market made new moves and undertaken new growth plans to survive the COVID-19 impact. Taylor & Hart, a designer, manufacturer, and retailer of online jewelry, launched a new showroom in London and its workshop space in the first quarter of 2020. Despite a strong start to the year, the company was not immune to the challenges amid the coronavirus lockdown. Nevertheless, the company has evolved its business model by introducing virtual and live chat engagement ring consultations to meet the 'new normal' demands and planning a brand refreshment, propelling regional market growth.

In Central and South America, fast fashion trends and inflation influence the luxury jewelry market due to the continuous adoption of product offerings to serve price-sensitive consumers. As the region's economic growth has been slow, manufacturers are offering many products in the costume jewelry segment, where jewelry is made of less expensive materials like silver. In addition, key market players are facing losses, and to stay afloat and expand their businesses, some are selling their shares. For instance, in 2019, Vivara, a leading Brazilian jeweler, announced that its parent company Tellerina sold 40% of its shares in the company. Vivera also raised USD 112.9 million and plans to fund its expansion investment in branding technology.

Segmental Analysis

The global luxury jewelry market is segmented by material, product, application, and distribution channel.

Based on material, the global luxury jewelry market is segmented into gold, diamond, platinum, precious pearls, gemstones, and others. 

The gold segment owns the highest market share and is estimated to exhibit a CAGR of 8.2% during the forecast period. Gold is expected to hold the largest market share owing to the high demand for gold-based jewelry in the Asia-Pacific, especially in developing countries like India, China, and Bangladesh. According to the World Gold Council, the world's three most vital gold trading centers include the London OTC market, the U.S. futures market (COMEX), and the Shanghai Gold Exchange (SGE). The usual gold futures contract size is 100 troy ounces. During times of political and economic turmoil, gold is an appealing investment.

Gold jewelry accounts for half of the global gold consumption, whereas investments account for 40% and industry accounts for 10%. In addition, China, Australia, the U.S., South Africa, Russia, Peru, and Indonesia are among the world's top gold producers. India, China, the U.S., Turkey, Saudi Arabia, Russia, and the UAE are among the highest gold jewelry buyers.

Based on product, the global luxury jewelry market is bifurcated into necklaces, rings, bracelets, earrings, and others. 

The rings segment dominates the global market and is anticipated to grow at a CAGR of 8.4% over the forecast period. Rings are expected to lead the global market due to the surging demand for luxury rings for day-to-day use. According to a study by De Beers Group, a diamond ring is the most popular piece of diamond jewelry that customers are investing in right now (36% of total respondents). Moreover, couples tend to buy different sets of rings for different occasions, another major driving factor for the segment. The strong influence of Western culture, especially on emerging economies in the Asia-Pacific, is further contributing to the demand for rings.

Rising demand for bracelets, necklaces, and earrings, among other jewelry items, for daily use due to changing fashion trends is expected to accelerate market growth for luxury jewelry. In addition, the rise in the LGBTQ+ community is also driving the demand for engagement rings over the forecast period.

Based on application, the global luxury jewelry market is divided into men, women, and children. 

The women segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 7.61% over the forecast period. The increased presence of female self-purchasers is a major factor driving the luxury jewelry market. The 2021 JCK State of the Jewelry Industry Report has brought to light the immense power of self-purchasers in this market; according to one of its surveys, 76% of respondents within the jewelry industry said that they had noticed an increase in women purchasing jewelry for themselves, and these were significant purchases. Citing the findings of research conducted by Platinum Guild International, the JCK report adds that based on their data over the past two years, 73% of female jewelry purchasers bought at least one piece of jewelry for themselves. While Gen Z was the most influential age group for self-purchasing, 45% of the older generations also reported buying at least one jewelry item for themselves. Focusing on self-purchasing women will open up new design possibilities for players within this segment.

Based on distribution channels, the global luxury jewelry market is divided into offline and online channels. 

The offline channel segment is the largest revenue contributor to the market and is predicted to exhibit a CAGR of 7.81% over the forecast period. Several consumers prefer purchasing luxury jewelry from offline stores to online platforms. According to a survey in 2021, even though consumers browsed or selected products online, only 15–20% of them bought jewelry online, and the remainder preferred to purchase these items from physical stores. GRAFF and MIKIMITO's luxury brands launched flagship stores in Hong Kong in 2020 and New York in 2021, respectively. The stores have been built to provide a more personalized experience to customers.

Recent Developments

• June 2023- Explora Journeys announced that its ships, EXPLORA I and EXPLORA II, will soon feature a new luxury watch and jewelry retail offering. The new retail offerings will include Cartier, Panerai, and a watch and jewelry store called Piaget.
• June 2022- A visionary in fine jewelry, ANNA ZUCKERMAN, unveiled a collection that redefines affordable luxury. Anna Zuckerman created a line of demi-fine jewelry that emanates boldness, self-assurance, and timeless beauty through her passion for gemstones and commitment to ethical practices.