With the US market having reached what appears to be saturation and offering little in the way of avenues for growth, it has become even more imperative to identify and develop new markets. It has been almost impossible to identify a market that combines both the size and buying power of the US. Most new markets, even if they offer good buying power like Asia-Pacific, are usually fragmented by ethnicity and too small to offer much to manufacturers of any size. India and China individually offer many times the size of the US market but just a fraction of its buying power.

The long-term future holds the promise of many new markets including large ones with a high degree of homogeneity. As a landmark Goldman Sachs study revealed, Brazil, Russia, India and China will be the only countries with growing GDP even in 2050 because, among other things, they will still have growing populations while today's established markets like the US will have large,
non-working populations.

But today's diamond and jewellery manufacturers need survival and growth strategies that involve developing markets in the more immediate future.
Enter Asia-Arabia, a new hybrid market that combines the size of the Indian market with the buying power of cash-rich countries like the UAE and Saudi Arabia as well as other oil-rich Arab countries. How did this market come to be? It starts with the somewhat shared ethnic tastes of the Arabian and Indian populations. Both populations prefer jewellery that also displays high intrinsic value. Both have similar social drivers for the purchase of jewellery.

Add to this the population demographics that have millions of expatriate Indians living in these Arabian countries, and the mix becomes a potent brew. The fact that some 60 per cent of the population of the UAE is from the Indian sub-continent means that common marketing strategies can be employed in both countries. And it takes very little tweaking to make the jewellery attractive to ethnic Arab consumers. This leads to huge savings in manufacturing and design costs.

De Beers has identified Asia-Arabia as the fastest-growing market with the most future potential and is encouraging its clients to use the techniques it has successfully employed in India to grow sales in the Middle East. Many of the other big players agree and have initiated growth strategies based on Dubai being their entry point into Middle Eastern markets (see article on Dubai).

Keep an eye on Asia-Arabia. It is likely to attract the most attention in the near and medium future.

Sandra Merchant
Editor
e-mail: solitaire@ccs-publish.com