DTN News - CHINA NEWS: China Drives Global Diamond Jewelery Sales To $79 Billion
• China's market share will increase to 20 to 25 percent in a decade and could soon surpass that of the United States
• Demand for the precious stone has reached a record high
• A dearth of new diamond finds in recent years has hurt production rates, while existing mines in Botswana, South Africa and Namibia are becoming depleted
Source: DTN News - - This article compiled by K. V. Seth from reliable sources CNN News(NSI News Source Info) TORONTO, Canada - September 20, 2014: (HONG KONG) - China's demand for polished diamonds has exploded over the past decade rising from 3 percent of global demand in 2003 to 15 percent in 2013 when booming global sales reached an estimated US$79 billion.
Polished diamond sales in China rocketed by 14% last year alone, double the pace of growth seen in the U.S.
Overall, sales of diamond jewelry to the Chinese have been the fastest growing in the world, averaging about 21% a year over the last decade. China now accounts for 13% of global demand, up from just 3% in 2003.
The U.S. is still the world's largest diamond market but companies such as De Beers are increasingly looking to China for growth.
As disposable incomes rise, Chinese consumers are driving global markets for luxury products, including expensive watches, handbags, cars and diamonds. China now accounts for nearly one-third of global luxury purchases, according to the report.
China is still seeing much higher than average growth in diamond sales, even though some luxury segments have been hurt by a government anti-corruption campaign, and a slowing economy. Global diamond jewelry sales hit a record $79 billion last year, led by strong interest from the Chinese for the rare gem, according to a report from De Beers.
Based on the current trajectory, China's market share will increase to 20 to 25 percent in a decade and could soon surpass that of the United States, long the world's top market with 40 percent of global sales last year, De Beers' executive head of strategy and corporate affairs Bruce Cleaver said in an interview with The Straits Times Friday.
Demand for the precious stone has reached a record high, with global sales being driven by Chinese buyers switching their fancies from gold and jade to diamonds, according to an inaugural industry report by De Beers, the world's largest supplier of diamonds.
Demand from China grew 14 percent on year in 2013, the fastest rate globally, according to De Beers' Diamond Insight Report.
The bulk of demand came from married women, who accounted for two thirds of purchases and sales value.Engaged women accounted for around 20 percent of purchases and contributed to just under a quarter of sales value in China, while single women accounted for 14 percent of purchases and made up 11 percent of sales value.
The report, released at the Hong Kong Jewellery and Gem Fair, said the 'spoiling route' in China buying or receiving a diamond outside of a specific occasion is thriving. Last year, 18 percent of diamond purchases were made for no particular occasion, while 24 percent were self-purchases rather than gifts.
Although China remains the largest contributor to demand in the global diamond jewelry market, its exponential rate has started to slow.
"China is the biggest engine growth for the diamonds business and has been for the past five to 10 years. The rate is slowing down but it's still a big increase. I think this year China demand will be just under 10 percent," said Philippe Mellier, CEO of De Beers Group
Meanwhile, sales in India and Japan declined 10 percent and 6 percent, respectively, in U.S. dollar terms in 2013.
Mellier pointed out that consumers are set for higher prices in the coming years as demand thrives but production tightens.
A dearth of new diamond finds in recent years has hurt production rates, while existing mines in Botswana, South Africa and Namibia are becoming depleted and the need to dig deeper has made operations less profitable.
"Unless major new discoveries are made in the coming years, supply can be expected to decline gradually from 2020," De Beers said, forecasting rocky times ahead for the $85 billion a year industry.
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