America may be the largest consumer of diamonds today but the focus is now being shifted to Asia which could overtake the US by the end of this decade. Rapid growth of consumers in China and India is helping now to drive a rebound from the economic downturn that had adversely affected the world economy in 2008.
Will both demand of polished and rough diamond expand in near future? According to an annual survey released recently by Boston-based consulting firm Bain & Co in collaboration with the Antwerp World Diamond Centre, fundamental forces indicate a bright outlook for the diamond market and based on increased demand in the top markets, rough diamond sales are expected to rise to $26.1 billion by 2020 from $15.6 billion last year. The report says that revenue generated from rough diamond sales in the top three consuming markets (the United States, China and India) this year is estimated to be 44.5 billion USD, 61% of which is generated in the US. But the rapid gradient of personal income in China's II and III tier cities will cause demand for diamond jewellery and other luxuries to expand along with that growth. In other words, China is likely to maintain its second-place status for years to come. India's demand is also expected to rise, but at a slower pace.
Another report titled "Asia Gems and Jewellery Industry Outlook to 2015 – China Outpacing India as the Market Leader in Asia" provides an in-depth analysis on the gems and jewellery industry of major Asian countries viz India, China, Japan, Hong Kong and Thailand. It covers various aspects like market size of the gems and jewellery sector on the grounds of revenue generated from retail sales of gold jewellery, diamond jewellery and other precious stones jewellery segments, major gems and jewellery import and export market size and segments.
The SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats involved) report says that Greater China, which consists of Mainland China and Hong Kong is a major jewellery market and is today the second largest market in Asia followed by India and is poised to overtake India to become the leading gems and jewellery consuming area in Asia in 2015.
According to feedback provided by Anglo American which has recently taken over 85% stake in De Beers, Chinese and Indian consumers, who each buy about 10% of the world's polished diamonds, will continue to grow demand, to 13% for India and 15% for China by 2016. The Company's estimates say that the global trade in finished diamonds will be about 31 billion USD three years from now.
Along with this encouraging outlook, the diamond industry has been cautioned against some challenges by doyens of the industry. CEO of the Namibia Diamond Trading Company (NDTC) Shihaleni Ndjaba says, "The year 2012 proved to be much more challenging for the industry. But the global diamond industry is being negatively affected by uncertainty created due to the volatility in the exchange rate, the protracted Euro Zone crisis, a slowdown in demand in China and India and the general lack of liquidity in international markets."
International Diamond Manufacturers' Association (IDMA)'s President Mr. Maxim Shkadov, his first public message has called upon the rough diamond producers to support a joint industry marketing plan to increase the market share of polished diamonds and diamond jewellery in the luxury product sector. He says, "Sadly, there is no real competition in the rough diamond market. In a truly competitive market, when you fight for the client, you'll see progress. But when the client is turned into some kind of money extraction machine, we find ourselves where we are now. And no machine can function without the necessary lubricant to keep the cogs moving. Producers too, must know that sales of diamond jewellery are declining, and are losing market share within the luxury goods consumer market. So they must know that a joint, dynamic effort is needed to increase demand for diamonds."
So despite some challenges, the global diamond industry has got a bright outlook.
