Nothing says 'Life is good' like jewelry, and sales are taking off in the world's upwardly mobile countries.
Forget America and Europe. When it comes to all things shiny, parts of Asia and the Middle East, are at the center of the boom. Another hot spot: Latin America, which may have the potential to explode as trade barriers fall and consumer markets grow.
Entrepreneurs in all these countries are making their move aren't shy about flaunting their growing wealth. They're going big for bling (bling is a slang term which refers to elaborate jewelry and also to a lifestyle built around excess spending and ostentation).
"Brazil is growing so much," says Danie Tangchai, head of U.S. operations for LJ International, a designer and distributor of fine jewelry. The growing consumer markets of Brazil, Argentina and Chile have jewelry wholesalers stirring. Many of them are pleading with distributors to pick up their operations there. "I have a lot more wholesalers contacting me looking to do business there; they see big potential."
No surprise. The country is one of the fastest growing economies in the world, along with Russia, India and China. Denizens are also among the fastest-growing consumers of jewelry and other luxury goods.
Tangchai pegs Brazil, and by extension Argentina and Chile, as being among the handful of countries he's looking to penetrate over the next couple of years. Pumping up some of the Latin American consumer markets is the fact that they're also big producers and exporters of metals or gems. That's been a boon during the recent rise in commodity prices.
"They're seeing large influxes of cash," says Paul van Eeden, a mining and metals investor and president of Cranberry Capital, an industry newsletter. "That's good for everything consumer, including jewelry."
Growing global demand, which is getting little lately help from some traditionally large economies like the U.S. and Japan, has set off a bull run on prices of precious metals. Gold has shot up to more than $640 an ounce from $350 over the past five years, while silver has more than doubled over the same period, to $13 an ounce from under $5.
The global silver trade grew to $2.6 billion in 2005 from $1.4 billion in 2004, according to the Silver Institute, mainly on rising prices. The industry predicts demand will remain robust despite the price increases, as silver remains a less expensive alternative to gold for a lot of jewelry buyers, especially for consumers in emerging markets like Latin America.
And while economic growth is obviously a big part of a country's growing bling factor, it's not the only one. People in fast-growing economies like Ireland, Vietnam and Guyana aren't buying as much jewelry as those in Chile, Brazil or Mexico.
Differing tastes and demographics play a big role. Mexico, for example, is a country that's big on traditions, where arty jewelry that denotes a religious belief is popular. And gradually, more people there are finding ways to afford it.
In fast-growing India, home to a rising middle class, high prices have slowed sales of gold recently, so a consumer base that likes to express itself with shiny accessories has turned to diamonds.
"Culturally, it's all about jewelry. It's really blowing most everyone else away" says Jacques Voorhees, head of business-to-business online jeweler Polygon. India is also the world's top producer of cut diamonds. Its growing domestic market spurred a national economic summit in December 2006 that cited gems and jewelry as a likely area for employment growth.
Polygon's other hot areas are China, where the market is moving from huge volume growth in the 1990s to more expensive items, and the Persian Gulf region, especially Dubai and Saudi Arabia.
Polygon recently announced a joint venture with Dubai Metals and Commodities Centre to support its expansion in Asia and the Middle East, along with parts of Africa.
"Gulf countries sell the world carbon-based petroleum and then turn around and buy carbon-based diamonds," Voorhees says.
For some of the Middle East and Asia, jewelry purchases aren't so much about bling as about investment. Most of the gold being traded around that region is of the 24-carat variety, too soft for daily wearing. The growing economies there are creating enough cash to allow more people to invest in gold and other metals as savings vehicles.
"It's money," says van Eeden, who notes that it's mainly cheaper jewelry bought by younger consumers that is the stuff for show.
And plenty of them do. When you've got it, flaunt it.