India’s 2022 diamond sales will top 2019 numbers: Natural Diamond Council

As diamond markets recover worldwide, advocacy body The Natural Diamond Council said the category is seeing rapid growth. In an interview, David Kellie, chief executive of The Natural Diamond Council, said the industry has lagged in adopting the digital channel and has not really inspired the young female consumers who are buying luxury bags or iPhones. However, that is changing, and the industry is seeing significant growth in the desirability of natural diamonds. “That gives us space ahead of us,” he said. Edited excerpts:

How did the pandemic impact the business of diamonds?

The pandemic was a strange time in every industry. For us, it happened just as we were re-launching the Natural Diamond Council. After the first lockdown was lifted, consumer demand for diamond jewellery did well. It exceeded all expectations on growth levels. The only thing that held back at any time was that retail was closed and even then, quite a lot of the shopping went online to e-commerce.  2021 was a record year in this industry. So far, 2022 has also started out very strongly. I think there are both cultural reasons and pandemic reasons for that. But all in all, diamond jewellery is on a very rapid growth curve at the moment. According to a Bain report, in 2020, diamond jewellery sales fell 14%, and rough diamond sales declined 31%. In 2021, revenue increased 62% in the diamond mining segment, 55% for cutting and polishing, and 29% for diamond jewellery retail. In 2021, the personal luxury and diamond jewellery markets experienced decade-high growth (35% and 29%, respectively).

Is that true for India as well?

We have little macro data for India, but certainly, anecdotal data suggests that once the lockdowns were lifted, demand was very strong.  The same report added that in India, diamond jewellery sales rose 16% in 2021, following a 25% drop in 2020.

How does India compare with the US or China in diamond jewellery?

The US has about 50% of the world’s diamond jewellery market. The second biggest market is China, which has 16-17%. Third is India, at 5-6% of the market.  Has India reached pre-covid diamond sales numbers?

In 2020 it hadn’t, but this year, it will recover and surpass 2019.

What about the US and China?

For the US, 2021 was a recovery year, and that was around 30% ahead of 2019. So, it didn’t just recover it went way past it. China’s much more challenging since they are still having covid lockdowns–Beijing and Shanghai is closed for the last two or three months. Before that, Hong Kong was closed. So, China is still in a much more challenging position because of the ongoing government strategy around covid and lockdowns, and that impacts retail.  Traditionally, Indians prefer investing in gold rather than buying diamond jewellery. What’s your view?

I was in India a few weeks ago, and it was interesting to see how even Malabar, Tanishq and niche companies, which were traditionally gold stores, had done a really good job of creating different areas for diamonds — nearly 25% of their entire store footprints. I was in India when the pandemic broke out, and at that time, everything was “gold, gold, gold”, and only a small amount of actual space was given to build those areas out. And, yes, while gold is traditional in terms of its inherent holding value, the younger female consumers, particularly those that are buying themselves, and are on Instagram, they’re being inspired by cultures from all around the world, and diamond jewellery is something you desire and you want, whereas gold is seen as something as a storage of value around weddings. But now, the same consumer may be buying gold as an investment and diamonds because they are desirable.

Are lab-grown diamonds picking up, especially in countries like the US?

Lab-grown diamonds will have a position in the world. The logical conclusion is that, as with all technology, it gets better and cheaper. And, we are already seeing that with the growth of manufacturers in India and China.

Courtesy: Live Mint