How much potential does the diamond market have?

On May 14, Anglo American plans to sell or spin off its diamond business De Beers, platinum and coking coal assets. As global economic fluctuations intensify and the diamond market cools, De Beers' divestiture of its diamond business has sparked heated discussions. The industry recommends focusing on the present and tapping into the potential of diamond consumption. This article briefly analyzes the Chinese diamond market data in the "2023 Diamond Industry Insight Report" to provide market insights and business adjustment ideas for practitioners.

Market Size Potential

Figure 1 shows that Chinese consumers will continue to be enthusiastic about diamonds in 2023, ranking third after gold and overseas vacations in the women’s gift preference survey; about 30% of the respondents intend to buy or receive diamonds as gifts. Cross-generational generations (post-80s to post-00s) have similar desires for diamonds, and younger groups continue to be enthusiastic. In the past three years, the potential demand for diamonds has continued to grow. The demand is not saturated due to economic and other factors, and the purchasing potential of the wealthy class is particularly significant. There is a large room for improvement between purchase intention and actual actions.

Consumption Scenarios

Figure 2 shows that in 2022, 97% of China's diamond jewelry market will be dominated by female consumption. Non-wedding diamond jewelry consumption far exceeds wedding diamond jewelry consumption, but wedding and lover gifts account for more than 60%, highlighting the close connection between diamonds and love. Non-lover gifts account for 22%, an increase of 4% over 2018, showing the growth potential of diamond jewelry in expressing multiple emotions, providing new opportunities for brands to expand the market. Only 14% of women purchase for themselves, a decrease of 3% over 2018.

Consumer Groups and Preferences

Figure 3 shows that the 26-41-year-old group is the core of China’s diamond consumption, accounting for 49% of respondents, accounting for 67% of consumers, and contributing 66% of consumption. The 18-25-year-old group has grown significantly, and its consumption power has gradually matched its population proportion, indicating future potential. In the short term, 26-41 year olds will firmly occupy the market base; in the long term, 18-25 year olds will gradually become mainstream. The wedding market is dominated by people aged 26-30, who prefer clarity, size and price; those aged 31-41, who prefer size, clarity and price. 18-25 year olds are more concerned about brand ethics and social responsibility, 65% consider brand image, and prefer online search and purchase, which is twice that of older people, but their purchasing power is still limited. This age group prefers non-wedding commemorative consumption, pushing brands to expand market boundaries.

Significant trends show that consumers attach more importance to brands. Between 2016 and 2022, the market share of well-known brand diamond jewelry jumped from 44% to 92%, highlighting the trend of consumers seeking brand values and emotional resonance.

Wedding and Other Markets

In recent years, the number of marriages in China has declined, but the increase in the unit price of wedding diamond jewelry and the increase in penetration have supported the diamond consumption market. In 2022, 47% of brides will buy diamonds, an increase of 14% over 2020, the average price will increase by 10%, and the market size will expand by 6%. Among non-wedding gifts, wedding anniversary gifts are the most popular (41%), and the average price of diamond gifts is 9,500 yuan, which is higher than self-purchase. In 2023, De Beers added 55-65 years old and fourth-tier cities as samples, and estimated that the former has a consumption potential of 4.3 billion, preferring self-reward but with low consumption; the latter market accounts for 10% of the total, covering 16 million people, with a low purchase rate and expectations, wedding anniversary gifts account for 35% of diamond jewelry consumption, and gift consumption accounts for 88%. With the expansion of the middle-income group, the diamond market potential in fourth-tier cities is promising.

Summarize

In recent years, the diamond industry has faced multiple challenges in terms of economy, supply chain and values, but this is not the first time it has experienced a market downturn. As the cornerstone of the jewelry industry, diamonds have a solid foundation. We need to remain optimistic, overcome difficulties together, and wait for the market to pick up.

曼尼森吉他定制

How much potential does the diamond market have?

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