In a recent interview
with Rapaport, De Beers executive director Stephen Lussier voiced something
that many in the diamond industry are aware of, but some of my American readers,
particularly the retailers, may not be ..
America remains the most important
market retaining between 35 percent and 40 percent of world demand, compared to
50 percent a couple of years ago. The slack has been taken up by China and
India, with Chinese consumers also buying overseas in Japan, Hong Kong, and
increasingly in Europe. China and India now equally share close to 20 percent
of world demand.
Now, part of this 10% to 15% drop in America’s market share
is because of the recession. And yet, even when the U.S. fully recovers, things aren’t likely to go back to normal. While the U.S. will likely be the dominant diamond
market for a long time to come, it is not going to be as dominant as it was.
China and India are enjoying far greater rates of growth. (China’s and India’s GDP
growth for 2010 is projected at 10.5% and 9.4%, respectively. America’s is about 3%.)
I was recently on a trip to Israel sponsored by the Israel
Diamond Institute. For the first time in memory, I was the only journalist from
the U.S.; the rest were from China and India. And some Israelis we talked to
were far more interested in the Chinese and Indian markets than they were in
the U.S.
Which is only natural, considering many overseas
companies have long considered the U.S. a tough place to do business. They
don’t like all the memo, extended terms, and stock balancing, not to mention the risks and
manpower needs associated with them. And in the last few years, more than handful of companies have shut down their U.S. offices. They just don’t think it’s
worth it anymore. One veteran industry observer noted that some companies that
are in the U.S. no longer send their best people or product.
In the current climate, this hasn’t really impacted U.S.
jewelers, who still have plenty of companies courting them and wanting their
business. But it could eventually. With Asian markets growing exponentially,
and a shortage of goods projected for the future, we may see the relationship
between U.S. retailers and their suppliers becoming a lot less one-sided than
it has been.
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