In the western world, diamonds have been intimately linked to weddings and engagements since De Beers famously coined the slogan “a diamond is forever” in 1947. To the dismay of those watching their wallets, that has also meant that the coveted gems enjoy a close association with February's unofficial holiday: Valentine's Day. Now, increasingly wealthy consumers in eastern markets, specifically China and India, are emerging as major drivers of diamond demand as they adopt the tradition of marking these occasions with diamond jewelry.
Wealthy Chinese and Indian consumers to drive demand
The 2012-2013 Executive Summary from Rare Investment, a company that focuses on exposing clients to fancy-colored diamonds and other rare jewel investments, notes that in the coming years, China and India will drive demand for all types of diamonds, from low to high end.In China, demand will largely be the result of the country's growing number of billionaires. The report quotes investment bank Credit Suisse (NYSE:CS) as stating that “[t]he number of billionaires in Asia rose to 351 last year from 245 in 2010” — that's compared to 332 in North America and just 251 in Europe. And that increase in billionaires has been accompanied by a “trickle-down effect in wealth across the country,” meaning that as a whole the Asian nation is primed to consume high-end luxury products like diamonds. Rare Investment's report also notes that “India, alongside China, has been identified as the fastest growing market in the world for luxury jewelry over the next five years.” In fact, Indian consumers' desire for diamonds may eventually outpace their demand for gold. That's a considerable feat considering the fact that India is widely known as a gold-hungry country.