The BRIC countries – Brazil, Russia, India and China – are the hotbed of growing diamond jewelry consumption. While the U.S. provides the slow, yet steady growth of a mature market, the BRICs are where the diamond industry has found large growth. Indeed, many sectors have benefited from the fast growing economies of these four countries, led by China. Setting sights on long-term growth, diamond firms should consider MIST – Mexico, Indonesia, South Korea and Turkey. Although not emerging economies like the BRICs – the four are part of the large G-20 global economies – they are forecast to continue and have large growth after more than doubling their economies in the past decade.
This forecast is based on positive demographics, fiscal and monetary discipline, low debt rates and policies aimed at improving the business climate and promoting private sector, says Jim O’Neill, the retiring chairman of Goldman Sachs Asset Management who coined the term BRIC in 2001.
Although the MISTs GDP last year was just a third of the BRICs and their population a mare sixth, their growth rate is impressive.
Their middle class is reaping the financial benefits of this growth and is growing in number as well as in discretionary income – precisely what every diamond retailer strategy aims at.
Mexico is a growing manufacturing alternative to China, and conveniently located right next door to the U.S. Indonesia’s middle class, one of the world’s fastest growing, is driving the country’s 60-percent private consumption, nearing that of developed countries.
South Korea is a developed country but still has great growth potential as its consumer electronics and transportation industries keep conquering the world. Its biggest problem is an aging population.
Turkey has the greatest growth potential and is already an important gold jewelry market as well as home to a great tradition of gold jewelry manufacturing and a society that is expanding its taste to diamond jewelry. Sandwiched between Asia and Europe, a close ally of the U.S. and a candidate to join the EU, Turkey’s economy is growing thanks to structural reforms that include privatization and liberalization.
Despite the slowing growth in China, the underperformance of India, Russia’s growing economic uncertainties and Brazil’s high protectionism and tariffs, the BRICs will continue to be important diamond jewelry markets. However, if you want to look beyond them, the MISTs are a promising option.
