The numbers are staggering and ought to have cheered me up, but I was actually alarmed by what some of them implied. I read this report titled How The World Spends Its Money, that quotes Forbes. It informed me that last year, Americans spent a staggering $907 billion on discretionary items! Of this, nearly 43 per cent or $390 billion was spent in restaurants and 15.5 per cent or $141 billion was spent buying electronics. Going by that, jewellery, if we reckon was worth $70 billion, consumed roughly 7 per cent of the discretionary expenditure made by Americans.

I clicked on the link to the Forbes report In Pictures: How Americans Spend Their Money and got this interesting nugget, which I’ve pasted below, from one of the slides.

Luxury (Excluding Jewelry)

2005

Total Spent: $10 billion
Percentage of Annual Discretionary Spending: 1.2%
Year-Over-Year Change: 5.3%

2006

Total Spent: $10.5 billion
Percentage of Annual Discretionary Spending: 1.2%
Year-Over-Year Change: 4.8%

2007

Total Spent: $11.5 billion
Percentage of Annual Discretionary Spending: 1.3%
Year-Over-Year Change: 9.8%

Okay, it’s a sixth of what Americans spent on jewellery, but look at how rapidly the expenditure in this sector is growing! And check this other slide out:

E-Commerce

2005

Total Spent: $66.5 billion
Percentage of Annual Discretionary Spending: 7.9%
Year-Over-Year Change: 14.3%

2006

Total Spent: $68.5 billion
Percentage of Annual Discretionary Spending: 7.7%
Year-Over-Year Change: 3.1%

2007

Total Spent: $78.3 billion
Percentage of Annual Discretionary Spending: 8.6%
Year-Over-Year Change: 14.3%

Don’t miss the growth rate here either. So putting the two together, here’s what we have – expenditure on luxuries other than jewellery growing at just under 10 per cent a year and e-commerce booming with a 14.3 per cent growth rate.

And now let me come to the part that alarms me. Jewellery seems to be actually losing ground. Indian jewellery exports to the US have gone down by between 10- and 15 per cent. So Americans are getting turned on to other luxuries and the jewellery industry seems to have fallen off the e-commerce express. The really alarming part is that unless the industry does something fast, this could happen in India – one of the world’s fastest-growing consumer markets and going by what happened at the India International Jewellery Show (IIJS), something of a safe haven right now for the global gem and jewellery industry.