De Beers sees growth opportunity for diamond industry in India

With emerging middle class in India, growing economy, changing retail landscape, diamond industry’s biggest opportunities are in India, says Diamond Insight Report by De Beers.

The report has revealed the extent of opportunities presented by the growing economy and emerging middle class in India. Driven by a widening consumer base, economic development and increasing volumes, India’s diamond consumer market has achieved almost uninterrupted growth over last 20 years. It is now one of the world’s largest consumer markets, states the report. In India, retail landscape is changing. Chains are set to grow in significance and lead the way in online development, both as a sales channel and as a means of researching future purchases. Brands are becoming increasingly important for Indian consumers as reassurance of quality and authenticity. Further, the report adds that 75 million new Indian households are expected to see income rise above US$5000-6000 in the decade, contributing to growing diamond demand.

Global diamond jewellery demand rose 3 per cent to exceed US$80 billion for the first time in 2014 – representing the 5th year of consecutive growth since the global recession – while global rough diamond production rose 6 per cent to US$19 billion, says the report.

Consumer demand in 2014 grew in each of the top 5 diamond consuming markets – the U.S., China, Japan, India and the Gulf – which account for 75 per cent of global demand. The strength of the U.S. dollar suppressed further global growth, which at constant exchange rates amounted to almost 5 per cent.

While rough diamond production value increased in 2014, production volume actually decreased 3 per cent to 142 million carats. According to the report, rough diamond demand is likely to be lower in 2015 as higher levels of stock in the midstream and downstream work through the system.

Philippe Mellier, chief executive officer, De Beers Group, says: “2014 saw strong levels of consumer demand across all key markets. Rough diamond demand was also strong in 2014, although we have seen more challenges in 2015. Indigestion in the midstream and downstream has impacted rough diamond demand this year, despite consumer demand for diamond jewellery being stable on the levels seen last year.

However, the challenges faced by the sector in 2015 are expected to be short-term and the industry has excellent prospects. The long-term trend for demand has been positive, with consistent growth in demand for diamond jewellery since the 2008/9 financial crisis. There are also further exciting growth opportunities in the main consumer markets and India is a great example of this. Already one of the world’s largest markets for diamond jewellery, the growth of the middle class in India over the next decade is set to make a major contribution to growing diamond demand.”