China And India Emerging As Drivers Of Diamond Demand
Westernization also a factor
But it's not just billionaires who are contributing to the increase in diamond demand in China and India. Consumers picking up the western custom of marking occasions — primarily weddings and engagements — with diamond jewelry are also adding to demand and are expected to continue doing so. Rare Investment's report notes that there is already a precedent for this type of shift. In 1940, only 10 percent of brides in the United States received a diamond engagement ring, but by 1990 the amount had hit 80 percent; similarly, “in Japan, brides receiving diamond went from 6% to 80% over a period of 30 years.”
By the numbers
An article published last week by Forbes states that in 2011, retail diamond sales were 18 percent higher than they were in 2010; 2012 figures, when announced, are expected to show further gains. China and India are both contributing to such sales increases: with yearly sales of more than $9 billion, China is currently the second-largest diamond market in the world, while India's annual sales of the gem sit at $8.5 billion. Both countries buy more diamond jewelry than Japan, the European Union and the Persian Gulf area. By comparison, in the United States, diamond sales amount to $27 billion per year; however, consumers there are starting to favor "cheaper jewelry and smaller stones."Which companies will succeed? The Forbes article corroborates Rare Investment's outlook, citing both growing wealth in China and India and the countries' increasing adoption of the western custom of marking auspicious occasions with diamond jewelry as factors that are influencing growing demand for diamonds in the east. It goes on to note that those interested in taking advantage of this demand would do best to keep in mind what Asian consumers are looking for. That means offering diamonds at prices that the growing middle class can afford and taking into account the fact that “Chinese shoppers, for instance, have tended to buy diamonds in department stores because of the variety offered and the assurance of reputable, high-quality goods.”
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