De Beers has released its 2016 diamond industry insight findings, amid a precious stone market that is increasingly volatile. The price of fine-quality precious stones has sunk up to 80 percent in the last 30 years with inflation adjustments, according to recent reports. As such, De Beers has issued intelligence on declines in emerging markets as well as a maturing Millennial market that has proven to value experiential purchases over traditional ones.
The firm has warned the diamond industry that significant “investment will be needed to safeguard and nurture the diamond dream and capture the opportunity presented by the growth potential in Asia, the U.S., and globally, by Millennials,” read the report.
The world’s largest diamond firm urges its industry to hone in on growth within the Asian market, particularly in China and India as those nations’ economies continue to develop, with incomes rising as a result.
To reign in Millennials, “Across the value chain, innovation will remain critical — to strengthen the diamond dream and motivate sales, to develop new business models in the midstream, and to counter cost pressures in the upstream,” the report said.
De Beers has issued these cautions after a tepid 2015 — in which global diamond sales declined 2 percent, accruing an estimated $79 billion — down from $81 billion in 2014.
Last year was the first time diamond sales had declined in more than five years of “uninterrupted growth.” De Beers blamed these recent shortcomings on “unfavorable currency movements and economic slowdown in China and other emerging markets.”
In an effort to look ahead, De Beers compiled a comprehensive report on Millennials’ purchasing behavior and demographics. “In the top four diamond markets of the U.S., China, India and Japan, which account for 73 percent of global diamond jewelry demand, the number of Millennials (men and women) approach one billion. Of this number, more than 220 million have the level of affluence allowing them to be actual consumers of diamond jewelry,” the firm claimed.
While reports have alleged that Millennials are not interested in purchasing diamonds as tokens of congratulation or love, De Beers said this is not true. The firm feels the diamond industry should exercise patience when dealing with Millennials, as they are proving to reach financial maturity later in life than their parents’ generation. Stated the report: “[Millennials] share many of the same views and attitudes toward life, love, marriage and family, and lifetime values as older generations, but these manifest themselves later in their lives, as they reach financial maturity later.”
In 2015, Millennials in India, China, the U.S. and Japan spent $26 billion on diamonds — representing 45 percent of the global retail spend on new diamond jewelry.