New Delhi : As diamond markets around the world improve, advocacy body The Natural Diamond Council said the category is seeing rapid growth. In an interview, David Kelly, chief executive of The Natural Diamond Council, said the industry has lagged behind in adopting the digital channel and hasn’t really motivated the young female consumers who are buying luxury bags or iPhones. However, this is changing, and the industry is seeing a significant increase in the desirability of natural diamonds. “It gives us space ahead,” he said. Edited excerpt:
How did the pandemic affect the diamond business?
The pandemic was a strange time in every industry. For us, it happened just as we were relaunching the Natural Diamond Council. After the first lockdown was lifted, consumer demand for diamond jewelery performed well. It exceeded all expectations at the stage of development. The only thing that was left behind at any point was that retail was closed and even then, a lot of shopping went online thanks to e-commerce. 2021 was a record year in this industry. So far 2022 has also started very strongly. I think there are both cultural reasons and epidemic reasons for this. But overall, diamond jewelery is developing very fast at the moment. According to a report by Bain, the sale of diamond jewelery declined by 14% and the sale of rough diamonds by 31% in 2020. In 2021, revenues grew by 62% in the diamond mining segment, 55% for cutting and polishing, and 29% for diamond jewelery retail. In 2021, the personal luxury and diamond jewelery markets experienced decade-high growth (35% and 29%, respectively).
Is this true for India as well?
We have very little macro data for India, but certainly, anecdotal data suggests that once the lockdown was lifted, demand was very strong. The same report said that sales of diamond jewelery in India grew by 16% in 2021 after a decline of 25% in 2020.
How does India compare to the US or China in diamond jewellery?
The US accounts for about 50 per cent of the world’s diamond jewelery market. The second largest market is China, accounting for 16-17%. Third is India, at 5-6% of the market. Has India reached the pre-Covid diamond sales numbers?
In 2020 it was not, but this year, it will recover and surpass 2019.
What about America and China?
For the US, 2021 was a recovery year, and it was about 30% ahead of 2019. So, it didn’t go well, it went beyond it. Much more challenging for China as they are still in lockdown – Beijing and Shanghai have been closed for the last two or three months. Earlier Hong Kong was closed. So, China is still in a much more challenging position as the government strategy around COVID and lockdowns, and this affects retail. Traditionally, Indians prefer to invest in gold rather than buying diamond jewellery. What do you think?
I was in India a few weeks ago, and it was interesting to see that Malabar, Tanishq and even niche companies, which were traditionally gold reserves, did a really good job of creating separate zones for diamonds – their Store footprints about 25% of the whole. I was in India when the pandemic broke out, and at that point, everything was “gold, gold, gold”, and only little real space was given to make up those areas. And, yes, while gold is traditional in terms of its inherent holding value, young female consumers, especially those who are shopping on their own, and are on Instagram, are being inspired by cultures around the world, and more on diamonds. Jewelery is something you want and want, whereas gold is seen as a store of value around weddings. But now, the same consumers are buying gold and diamonds as investments because they are desirable.
Are lab-grown diamonds especially on the rise in countries like the US?
Lab grown diamonds will have a place in the world. The logical conclusion is that, as with all technology, it gets better and cheaper. And, we are already seeing that with the increase of manufacturers in India and China.