While growth in the watch sector has been relatively flat, the jewellery industry represents substantial financial opportunities for everyone from powerhouse Cartier to newcomer Kimai.
The Big Fine Jewellery Opportunity
It’s been a challenging decade for luxury, but the jewellery sector has been keeping strong and is poised for further growth in 2020.
Buying habits have transformed, with self-gifting trends coming into play and new digital channels, from e-commerce sites to WhatsApp, becoming available. But heritage labels have reaffirmed their power in this evolving market, while new names are cropping up too, creating new opportunity and initiating more m&a; activity than previously seen in the sector.
According to McKinsey & Company’s latest report, the category is looking at “a glittering future” with a healthy projected growth of 5 to 6 percent each year and annual global sales set to total 250 billion euros in 2020.
Strong Industry Players
This robust performance is partly due to established players, which have been working tirelessly to stay appealing and speak to the new generation of luxury consumers. So appealing are some household names like Tiffany & Co, that luxury behemoth LVMH spent $16 billion to acquire the business last November, in what was one of the biggest luxury deals of the decade.
“Jewellery is the least crowded category in the luxury sector with one of the highest barriers to entry, since there’s only a handful of global luxury jewellery brands. So Tiffany will be highly complementary to LVMH’s hard luxury portfolio given its broad consumer base and high exposure to the all important U.S. luxury market,” said Rogerio Fujimori, analyst at Royal Bank of Canada.
Another strong player, illustrating the momentum fine jewellery is experiencing, is Cartier. With a successful e-commerce launch that saw high-ticket items sold within minutes over WhatsApp, new renovated store concepts in London, an expansion into fashion accessories and buzzy influencer campaigns, the French jeweler has been seeing steady sales growth and boosting parent company Richemont’s bottom line.
In fact, Richemont has been seeing growth slow down given continued investment in Yoox Net-a-Porter and instability in Hong Kong, but jewellery has been a standout category for the group throughout the years. In its most recent financial results, jewelery sales grew 8 percent, mainly driven by high single-digit growth in Cartier and Van Cleef & Arpels.
The jewellery opportunity is so appealing that fashion brands want in too, with Gucci opening its first fine jewellery space at Paris’ Place Vendome last year.
According to McKinsey, branded jewellery will claim a higher stake in the market in 2020 and growth will mainly come from “non-jewellery players in adjacent categories such as high-end apparel companies like Dior or Louis Vuitton.”
Industry Newcomers
Meanwhile, new names are also cropping up one after the other and luring investors’ attention. Some of the most noteworthy newcomers are direct-to-consumer brands selling affordable or ‘demi-fine’ gold and diamond pieces, as well as sustainable labels choosing lab-grown over mined diamonds.
Up-and-coming lab-grown diamond label Kimai, which was endorsed by Meghan Markle soon after making its online debut, announced a $1.2 million seed investment round late last year, led by the likes of fashion designer Rebecca Minkoff; head of the Facebook app Fidji Simo; Cartier France’s former managing director Coralie De Fontenay; and billionaire businessman Xavier Niel.
Also in the last year, affordable diamond jewellery brand Aurate raised $13 million in a series A investment round, after growing a sizeable customer bases across the U.S. for their designs, clever Instagram marketing, sweet-spot prices and ethically-sourced diamonds.
“The fine jewellery market in the US alone is projected to be over $50 billion next year, and its growth is all stemming from online (with a 50 percent growth rate since 2015). It’s a market with a few big players and a lot of unknown commodities. This makes it a very attractive market to play in for somebody like us,” noted Aurate co-founder, Bouchra Ezzahraoui.
Watch Sector Must Adapt to the Times
The same cannot be said for the strength of the watch sector, where growth has been more flat and the interest has been turning more towards the resale market.
Swiss watch exports were down 3.5 percent, with most markets remaining stagnant and political unrest in Hong Kong driving the sector down.
The second-hand watch market on the other hand has been gaining momentum, as younger customers get more price-savvy and environmentally-conscious. Discontinued or vintage pieces are particularly popular and consignment sites like Xupes have been gaining ground.
“There’s a huge market in watches alone and we’ve been experiencing 30 percent growth in the last year, even under tough market conditions,” said Joseph McKenzie, Xupes founder. “The consumer has been 80 percent male at the moment, although there’s an interesting change in the market. In watches you’re seeing women look at watches as both a statement and an expression of perhaps their sophistication. You’re seeing men’s watches being worn by women as a fashion item and something that they’re actually interested in as well.”
Cover image credit: Aurate New York.
Journalist & Editor
Natalie is a journalist and editor specialising in luxury fashion, fine jewellery, business strategy and online retail. She has written for a wide range of b2b platforms and consumer publications in the London and Middle Eastern markets. Her biggest areas of interest include the intersection between fashion and technology and new media frontiers.
The Big Fine Jewellery Opportunity
While growth in the watch sector has been relatively flat, the jewellery industry represents substantial financial opportunities for everyone from powerhouse Cartier to newcomer Kimai.
It’s been a challenging decade for luxury, but the jewellery sector has been keeping strong and is poised for further growth in 2020.
Buying habits have transformed, with self-gifting trends coming into play and new digital channels, from e-commerce sites to WhatsApp, becoming available. But heritage labels have reaffirmed their power in this evolving market, while new names are cropping up too, creating new opportunity and initiating more m&a; activity than previously seen in the sector.
According to McKinsey & Company’s latest report, the category is looking at “a glittering future” with a healthy projected growth of 5 to 6 percent each year and annual global sales set to total 250 billion euros in 2020.
Strong Industry Players
This robust performance is partly due to established players, which have been working tirelessly to stay appealing and speak to the new generation of luxury consumers. So appealing are some household names like Tiffany & Co, that luxury behemoth LVMH spent $16 billion to acquire the business last November, in what was one of the biggest luxury deals of the decade.
“Jewellery is the least crowded category in the luxury sector with one of the highest barriers to entry, since there’s only a handful of global luxury jewellery brands. So Tiffany will be highly complementary to LVMH’s hard luxury portfolio given its broad consumer base and high exposure to the all important U.S. luxury market,” said Rogerio Fujimori, analyst at Royal Bank of Canada.
Another strong player, illustrating the momentum fine jewellery is experiencing, is Cartier. With a successful e-commerce launch that saw high-ticket items sold within minutes over WhatsApp, new renovated store concepts in London, an expansion into fashion accessories and buzzy influencer campaigns, the French jeweler has been seeing steady sales growth and boosting parent company Richemont’s bottom line.
In fact, Richemont has been seeing growth slow down given continued investment in Yoox Net-a-Porter and instability in Hong Kong, but jewellery has been a standout category for the group throughout the years. In its most recent financial results, jewelery sales grew 8 percent, mainly driven by high single-digit growth in Cartier and Van Cleef & Arpels.
The jewellery opportunity is so appealing that fashion brands want in too, with Gucci opening its first fine jewellery space at Paris’ Place Vendome last year.
According to McKinsey, branded jewellery will claim a higher stake in the market in 2020 and growth will mainly come from “non-jewellery players in adjacent categories such as high-end apparel companies like Dior or Louis Vuitton.”
Industry Newcomers
Meanwhile, new names are also cropping up one after the other and luring investors’ attention. Some of the most noteworthy newcomers are direct-to-consumer brands selling affordable or ‘demi-fine’ gold and diamond pieces, as well as sustainable labels choosing lab-grown over mined diamonds.
Up-and-coming lab-grown diamond label Kimai, which was endorsed by Meghan Markle soon after making its online debut, announced a $1.2 million seed investment round late last year, led by the likes of fashion designer Rebecca Minkoff; head of the Facebook app Fidji Simo; Cartier France’s former managing director Coralie De Fontenay; and billionaire businessman Xavier Niel.
Also in the last year, affordable diamond jewellery brand Aurate raised $13 million in a series A investment round, after growing a sizeable customer bases across the U.S. for their designs, clever Instagram marketing, sweet-spot prices and ethically-sourced diamonds.
“The fine jewellery market in the US alone is projected to be over $50 billion next year, and its growth is all stemming from online (with a 50 percent growth rate since 2015). It’s a market with a few big players and a lot of unknown commodities. This makes it a very attractive market to play in for somebody like us,” noted Aurate co-founder, Bouchra Ezzahraoui.
Watch Sector Must Adapt to the Times
The same cannot be said for the strength of the watch sector, where growth has been more flat and the interest has been turning more towards the resale market.
Swiss watch exports were down 3.5 percent, with most markets remaining stagnant and political unrest in Hong Kong driving the sector down.
The second-hand watch market on the other hand has been gaining momentum, as younger customers get more price-savvy and environmentally-conscious. Discontinued or vintage pieces are particularly popular and consignment sites like Xupes have been gaining ground.
“There’s a huge market in watches alone and we’ve been experiencing 30 percent growth in the last year, even under tough market conditions,” said Joseph McKenzie, Xupes founder. “The consumer has been 80 percent male at the moment, although there’s an interesting change in the market. In watches you’re seeing women look at watches as both a statement and an expression of perhaps their sophistication. You’re seeing men’s watches being worn by women as a fashion item and something that they’re actually interested in as well.”
Cover image credit: Aurate New York.
Journalist & Editor
Natalie is a journalist and editor specialising in luxury fashion, fine jewellery, business strategy and online retail. She has written for a wide range of b2b platforms and consumer publications in the London and Middle Eastern markets. Her biggest areas of interest include the intersection between fashion and technology and new media frontiers.