Friday 25 September 2020

Global diamond consumption to surge 67pc

Dubai, August 29, 2013

A surge in rough diamond consumption by the growing middle classes in China and India will push global consumption to $26.1 billion in value, from its 2011 level of $15.6 billion, marking a rise of more than 67 per cent, a report said.

The increase reflects an annual compound growth rate of approximately six per cent per year, added the 2012 Global Diamond Industry Report, released by Bain & Company, a global business consulting firm.

The annual bellwether diamond industry report, conducted in collaboration with the Antwerp World Diamond Centre (AWDC) finds that global demand will outpace supply, signaling solid pricing prospects and a strong positive outlook for the industry overall.

“The fundamental forces point to a bright outlook for the diamond market,” said Yury Spektorov, Bain & Company partner and co-author of the report. “However the global market is becoming increasingly diverse, so successful players will need to understand the changing forces in global wealth distribution, customs and consumer tastes.”

Some of the findings:

The US

•    The US is far and away the world’s largest diamond market. Its $27 billion in revenues are more than three times the revenues of No. 2 market China or No. 3 market India—and twice those of the US mobile phone market

•    Women continue to crave diamonds, but popularity of diamond engagement rings among younger consumers is marginally slowing down. It is unclear whether this is a temporary phenomenon or a long-term trend, but younger women show a growing preference for other luxury goods, especially consumer electronics

•    The 2008–2009 financial crisis hit the U.S. market hard, as diamond jewelry sales fell 18 per cent from 2008 to 2009. The market has rebounded somewhat, but 2012 revenues are only slightly above those of 2000


•    China has grown rapidly into the world’s second-largest market for diamonds, with annual sales approaching $9 billion

•    Rising wealth, popular fascination with Western culture and the fast-expanding middle class have powered the market’s growth, with a boost from lower taxes and tariffs

•    Approximately 90 per cent of affluent households (those with annual incomes of $15,000 or more) own at least one piece of diamond jewelry, and most own multiple diamonds

•    Market penetration among lower-income Chinese, who make up half the country’s 1.34 billion population, is much lower, representing a large growth opportunity for diamond retailers. Some 20 per cent of households making less than $15,000 per year own at least one diamond

•    Diamonds have strong emotional and spiritual resonance for Chinese women, who associate them with eternity and high status. The custom of giving diamond engagement rings is catching on quickly in China

•    Chinese women like highly visible diamond jewelry, preferring rings, necklaces and pendants to earrings. Stones of one carat or more are popular, and even mass- and premium mass-market stores in large cities often have several large stones on display

•    Retail expansion plays a key role in promoting diamond availability in all regions, established and emerging, in China

•    The retail scene is highly fragmented, with independent and local chain stores dominating the mass- and premium-mass segments, which account for 95 per cent of annual sales


•    Home to the world’s first diamond mines and the center of the cutting and polishing industry, India is the third-largest global diamond market, with annual revenues approaching $ 8.5 billion, and growing rapidly

•    Diamonds are the country’s second fastest-growing discretionary purchase, trailing only mobile phones

•    Many Indians have adopted Western holidays such as Christmas and Valentine’s Day, and diamonds are the most desired gift on such occasions. Diamond engagement rings are also a well-established custom

•    About 90 per cent of India’s affluent women own diamonds, with most receiving their first diamond to celebrate a wedding, engagement, birthday or anniversary

In addition to providing deep dives of the markets in the U.S., China and India, the report also includes a contrast in behaviors and attitudes between the more than 5,000 consumers surveyed by Bain across eight countries:

•    In both emerging and developed markets, diamond jewelry is at or near the top of most women’s lists of preferred presents. In China, India and Russia, diamonds are far and away women’s favourite gift

•    The popularity and penetration of diamond jewelry is high in the U.S., U.K. and Italy, where diamonds make up about half the jewelry market. Penetration and popularity are moderate in most of continental Europe

•    And in China, India and Russia, diamonds have been embraced by the affluent but have scarcely penetrated lower economic groups

•    Chinese women, unlike Indian women, associate diamonds with eternity. For American and Indian women, diamonds carry a strong monetary association as well as a positive emotional charge. Across all markets, diamond rings symbolize engagement, marriage and love

•    Nonetheless, adoption of the diamond engagement ring tradition is uneven. In the U.S. and U.K. about 80 to 85 per cent of engagements are formalized with a diamond, but in Germany the percentage is only 40 per cent

“Many elements of the global diamond consumer experience remain universal,” said Ari Epstein, chief executive officer of the AWDC.

“But the rise of the middle class consumer in the developing markets is having profound impacts on supply and distribution models in the diamond industry.” – TradeArabia News Service

Tags: China | India | Diamonds | Antwerp | Bain & Co |

More Retail & Wholesale Stories

calendarCalendar of Events