Diamond

Worldwide diamond consumption to surge 60 per cent by end of decade

A surge in rough diamond consumption by the growing middle classes in China and India will push global consumption to USD26.1bn in value from its 2011 level of USD15.6bn, reflecting an annual compound growth rate of approximately six per cent, according to the 2012 Global Diamond Industry Report released by Bain & Company.

 

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

“The fundamental forces point to a bright outlook for the diamond market,” says 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.”

The report a survey of more than 5,000 consumers in eight countries and a detailed examination and findings from three core diamond markets, the US, China and India. The report finds:

In the US:

 • The US is far and away the world’s largest diamond market. Its USD27bn in revenues are more than three times the revenues of number two market China or number three 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 US market hard, as diamond jewellery sales fell 18 per cent from 2008 to 2009. The market has rebounded somewhat, but 2012 revenues are only slightly above those of 2000

 • Retail trends play an important role in reflecting and shaping the consumer demand. The specialty retail sector has consolidated in recent years, with the disappearance of more than 5,000 specialty stores. Despite the change, the sector remains very viable, and Internet outlets and discounters are playing an increasingly prominent role

In China:

 • China has grown rapidly into the world’s second-largest market for diamonds, with annual sales approaching USD9bn

 • 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 USD15,000 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 USD15,000 per year own at least one diamond

In India:

 • Home to the world’s first diamond mines and the centre of the cutting and polishing industry, India is the third-largest global diamond market, with annual revenues approaching USD8.5bn, 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

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