Africa has the numbers, in terms of population, but as was established at the 2016 Diamond Conference held last week between November 7 and 9 in Gaborone the continent does, however, not have volume from an affordability point of view to support its diamond supply consumption.
Speakers at the conference explained that factors that drive consumerism extend beyond the size of population, but are largely dependent on the number of consumers willing and able to buy luxury goods such as diamonds.
This is spurred on by the growth of income and urbanisation. Despite that the middle class is seen to be growing in Africa, investors are scared to take the bold step in tapping on the opportunities that the continent can open up. Dr Mignon Reyneke, who shared extensively on the subject of the changing landscape of consumer demand focusing specifically on millennials, said in an interview that Africa provided a potential consumer market for luxury brands. The problem she identified is that the economics are closely related to politics which makes it difficult to predict what would happen next.
On the continen as a consumer opportunity, she said: “Africa is at the cusp of reaching it. It is still, however, difficult. If things could stabilise, that stability can get us closer.”
When responding to the question of whether there could be other opportunities to tap into on the continent that investors could leverage on to drive consumerism Stephen Lussier, Chief Executive Officer (CEO) of Forevermark, told this publication that inroads could be made after understanding the nature of relationships across the different cultures such that diamond marketing could communicate it accurately to potential consumers.
His view is that research is necessary to identify where the opportunities could lie. “There must be something for the marketer,” he said. In the case of Botswana, he gave the example of the tourism sector, which could provide a route into diamond consumerism by taking the advantage that tourists may be interested in buying diamonds from places where they are sourced. He added that this could appeal to tourists as they would want to buy something from a place that they were in.
Lussier demystified the concept of marketing and its relation to a diamond. His point of clarity was that marketing has not made a diamond what it is but has rather made it easier for competitors to reach their customers.
He explained that marketing took a product that was perceived to be for the elites and made it relevant for everyone. This, he said, created opportunities for more people to see diamonds as something that was a part of their lives as a means of expressing their emotion and commitment.
Speaking specifically to the consumerism observed in millennials, Reyneke called them a challenging bunch that made marketers feel uncomfortable but, however, did them a favour as they kept them on their toes to identify how they could add value to their lives.
She mentioned that online marketing currently remains underutilised citing that millennials have the habit of making their orders online but prefer to go physically to the store to pick up the order. This, she said, reflected the consciousness of their self-image as they can be seen walking out of the store with the product which makes them feel important.
Currently in terms of diamond consumption America dominates the market share at 45 percent followed by China at a range of 12 to 15 percent and then India at 8 percent. De Beers CEO Bruce Cleaver said in an interview with this publication that the remaining two months to the end of 2016 are very important to diamond consumption in America because of the Thanksgiving and Christmas holidays.
Coming from a financially disappointing year in 2015, Cleaver said 2016 would not produce any major up-tick and expects 2017 to be modest. He maintained the view that they remained cautiously optimistic.