Global demand for diamond jewellery touched a record high of $79 billion in 2013, almost 3 per cent higher than 2012, according to a report by The De Beers Group of Companies.
China has emerged as the fastest growing market for diamond jewellery sales in the world as the country has seen an increase of 30 per cent in the number of diamond jewellery retail doors between 2010 to 2013.
Sales of polished diamond rose 7 per cent in the US, the world's largest market for diamonds in 2013. On the other side, domestic diamond jewellery markets of both India and China grew by a compounded annual growth rate of 12 per cent in local currency terms between 2008 and 2013.
The report also highlighted that online sales medium is seen as becoming an important channel for the diamond sector. In the US, over one in six diamond jewellery purchases was done through online last year. Besides, one fourth of diamond jewellery buyers in China use internet for research purposes before purchase.
“Consumer demand remains the one true source of value for the diamond industry. With demand forecast to increase further from 2013's record levels, the opportunity for growth is clear. But this must not be seen as cause for complacency. The industry will continue to lose ground to other categories if it does not invest significantly in production, marketing and technology,” Philippe Mellier, chief executive, De Beers Group, said.
The report further said that the rough production hit 145 million carats in 2013 -- an increase 7 per cent over prior year -- but remains below the 2005 peak of 175 million carats.
“The diamond supply is expected to plateau in the second half of the decade before declining from 2020 onwards,” it added.
Over the long term, the demand is expected to rise, on the back of ongoing recovery in the US and growth of middle classes in the developing markets like India and China, the report said.
The report cautions that while diamonds retain their special allure with consumers around the world, future demand levels cannot be taken for granted. The overall category is facing increasingly strong and sophisticated competition from other luxury categories, with diamonds' share of advertising voice in the US market having reduced within its competitive set.