Global consumer demand for diamond jewellery hit a new all-time high in 2017, with the US continuing to be a reliable market for luxury items and millennials proving that diamonds still have that sparkle.
Global consumer demand for diamond jewellery climbed to $82 billion, a two percent increase on the previous year, according to industry insight data published Thursday by De Beers Group. In 2016, the demand for diamond jewellery increased marginally to $80 billion on the back of consumer demand in the US, which remained the fastest growing region, climbing more than four per cent to exceed $40 billion for the first time, supported by job creation, wage growth and a strong stock market.
In the latest report by De Beers, the US was still the main driver of growth for the fourth consecutive year, where positive macroeconomics and strong consumer confidence saw demand for diamond jewellery increase four per cent to $43 billion, representing more than half of total global demand. Fears of millennials – defined by De Beers as those aged from 18 to 34 – losing interest in diamonds and the rise of synthetic diamonds have been quelled by an increase in self-purchase of diamond jewellery which helped drive demand, representing 33 percent of total US diamond jewellery pieces acquired in 2017.
In the top four diamond jewellery markets of the US, China, India and Japan, which account for 73 per cent of global demand, the potential diamond buying millennial market is more than 220 million people, 39 per cent of the diamond buying population in these four countries in 2015. As such a large cohort, Millennials are already driving global consumer demand, yet they also represent a source of considerable future potential for the sector.
These 220 million potential diamond consumers are still a decade away from their most affluent life stage, representing a “significant opportunity” for the industry, De Beers said in a 2016 report.
Consumer demand in Mainland China, the world’s second largest consumer market for diamond jewellery, also returned to positive growth in 2017, reflecting the trend of the broader luxury goods sector. Demand increased three percent in local currency and one percent in US dollars, totalling US$10 billion. Growth was supported by strengthening macroeconomics towards the end of the year and a 20-year high in consumer confidence. In addition, there was a revival in the Hong Kong market in the second half of 2017, driven by both stronger local demand as well as a resurgence of Mainland visitor shopping.
According to a previous De Beers insight report, diamond jewellery sector has more than tripled in size within a decade. The Chinese diamond jewellery sector has been the fastest growing in the world. Brides and millennials have been driving Chinese diamond jewellery demand growth since 2016 as desire for diamonds among Chinese women has remained consistently strong and is the highest of any leading diamond region in the world. The younger millennial generation acquires diamond jewellery at a considerably higher rate than older women, not least because half of brides are in this age group. So-called millennials now account for 68 percent of diamond jewellery sales by value in the world’s most-populous country according to research by De Beers SA, the world’s biggest diamond producer.
Bruce Cleaver, CEO, De Beers Group, said: “People around the world are spending more on diamond jewellery than ever before and it’s encouraging to see consumers in the US, the world’s largest and most mature market, leading the way. While new designs and brand concepts played a key role in catching the consumer’s eye, it’s the timeless natural beauty, uniqueness and enduring value of diamonds that continues to resonate with people when looking to celebrate life’s special moments.”
Demand for diamond jewellery in the other main consumer markets of India, Japan and the Gulf saw low single digit declines in US dollar terms, affected by a range of macro-economic factors and regulatory and exchange rate impacts. Consumer demand in other diamond jewellery markets globally increased overall.
The outlook for 2018 demand growth remains positive in most of the main diamond consuming countries, based on solid world economic prospects, positive consumer sentiment and continued investment from the diamond industry in category marketing. Consumer demand growth will continue to be generated from Asia, particularly China and India, driven by higher household income over the next 10 years, and the US, the world’s largest market.