The COVID-19 pandemic caused diamond jewelry sales to fall 15% during 2020, but the industry saw significant sales growth during the last quarter, according to the 10th annual Global Diamond Report, coproduced by Bain & Co. and the Antwerp World Diamond Centre.
Diamond jewelry sales climbed 5 to 10% in the U.S. during the fourth quarter of 2020 over the prior year, while they climbed 15 to 20% in China, the report found. Despite the struggles of the pandemic period, diamond jewelry performed better in 2020 than the overall personal luxury market, which saw sales fall 22%.
Among the report’s other findings:
Natural rough diamond production fell 20% to 111 million cts. Peak diamond production was in 2017, when 152 million cts. were mined. Diamond production is expected to be flat over the next few years, with very few new mines coming online.
Around 20% of diamond retail sales occurred online, up from approximately 13% in the year before.
Lab-grown diamond production reached 6 to 7 million cts. in 2020, thanks in part to technical advancements that increased yields and production levels. About 50 to 60% of lab-grown diamonds are manufactured in China using high-pressure, high-temperature technology. However, stones produced by the chemical vapor deposition (CVD) method in the United States and India are gaining market share.
Retail prices for lab-grown diamonds fell in 2020 while wholesale prices remained stable, leading margins to contract. However, some of the drop in prices among smaller stones has slowed a bit. The report sees lab-grown manufacturers becoming unmoored from natural diamond prices, and moving toward a cost-plus model.
The lab-grown market is primarily based in the United States, with China a distant second. The report predicts that lab-grown manufacturers will increasingly target the fashion market.
Self-purchase emerged as a top reason to buy diamond jewelry in the U.S. Asked why they had bought a non-engagement piece of diamond jewelry, 29% of consumers said they had bought it for themselves as a treat, topping the 27% who said they had bought it as an appreciation gift for someone.
Diamond industry marketing spend is still around 1 to 2% of retail sales, far less than other industries.
Top: Mateo small axis diamond hoops (image courtesy of Mateo)Follow JCK on Instagram: @jckmagazine
Follow JCK on Twitter: @jckmagazine
Follow JCK on Facebook: @jckmagazine