Global diamond demand to grow 6% by 2020 with solitaires set to rise.
By Kathryn Lewis
A new study released last week by consultancy firm Bain & Company forecasts a decline in the combined share of the diamond market between Europe, the US and Japan.
The study, The Global Diamond Industry: Portrait of Growth, stressed the importance of emerging markets like India and China for the diamond industry. Nearly 50% of new diamond consumption is expected to come from India and China by 2020, while combined diamond spending in Europe, the US and Japan will drop from more than 50% to to account for 40% in the next 8 years.
The study forecasts that demand for diamonds globally will grow at an average of 5.9% annually to nearly US$26 billion (£43.79bn) by 2020. The diamond industry has grown by 18% since 2008 in spite of the global financial crisis, with diamond jewellery sales reaching US$71 billion (£57.66bn) in 2011.
By 2020, India and China will account for 50% of global diamond demand and will overtake the US as the world’s largest diamond market. According to the study, disposable income is one of the key drivers of diamond consumption in developed nations. Growth in disposable income will be modest in Europe, the study forecasts, going from US$8.9 trillion (£5.49tr) in 2011 to US$10.5 trillion (£6.48tr) in 2020.
Among the study’s findings was an increase in the popularity of engagement rings in continental Europe, China, India and Russia. In the UK and US nearly 85% of engagements involve a diamond ring. That figure is much lower in countries like Germany where just 40% of engagements involve diamonds.
In the UK and Italy diamonds account for half of the jewellery market, while popularity is moderate in most of continental Europe.
Germany and France, with most of continental Europe, represents a middle ground. Diamonds are fairly popular across all income groups, and between 60% and 80% own at least one piece of diamond jewellery. However, diamonds make up a moderate share of the jewellery market in those countries.
One of the key findings of the study involves India, now the world’s third largest market for diamond jewellery. With annual sales of US$8.5 billion (£5.24bn) accounting for nearly 12% of the global market, India already surpass Japan, the European Union and the Persian Gulf. The study forecasts that India will be a major market for growth in the coming decade.