Global diamond jewelry sales hit a record $79 billion in 2013, as the market faces a coming rough shortage, according to De Beers’ inaugural Diamond Insight Report.
The report said that U.S. sales rose 7 percent last year, while sales in India and China grew 12 percent. According to the report, one in six U.S. diamond jewelry sales were made online in 2013—about 17 percent. In China, about a quarter of diamond jewelry purchases are made on the Internet.
The report highlights the looming rough diamond shortfall. While rough production hit 145 million carats in 2013—an increase over the prior year—that remains well below the 2005 peak of 175 million carats, it said.
“Diamond supply is expected to plateau in the second half of the decade before declining from 2020 onwards,” the report said, noting that costs associated with mining, such electricity, labor, and diesel, are rising.
At the same time, diamond demand is expected to increase, due to the burgeoning middle class in India and China. But it warned not to take the market for diamonds for granted.
“The overall category is facing increasingly strong and sophisticated competition from other luxury categories, with diamonds’ share of advertising voice in the U.S. market having reduced within its competitive set,” it said. “Substantial investment will be required in diamond production, technology and branding, marketing and retail standards if the industry is to sustain its recent levels.”