China’s Diamond Market Rebound Sparks Optimism for Indian Exports

The Chinese diamond market, second only to the US, is showing early signs of recovery, sparking optimism in India’s diamond industry. According to the Gem and Jewellery Export Promotion Council (GJEPC), this shift could reshape the global diamond manufacturing landscape.

China’s economic slowdown and declining marriage rates had severely impacted its diamond market, valued at approximately USD 9 billion. In 2023, diamond sales in China generated around USD 5.7 billion, but analysts project growth to USD 7.2 billion by 2030. Over the past two years, demand has dropped by as much as 50%, with wholesale diamond prices falling 40%. This downturn significantly affected India, which exports nearly a third of its cut and polished diamonds to China.

The impact was evident in India’s February 2024 gems and jewellery exports, which declined by 23.49% to USD 2.42 billion (Rs 21,085 crore), driven by weak demand from both the US and China. To counter this, GJEPC participated in the Hong Kong International Diamond, Gem & Pearl Show (DGP) earlier this month, showcasing 71 exhibitors across 116 booths in categories such as Loose Diamonds, Lab-Grown Diamonds, and Fine Jewellery.

Hong Kong, a key hub for India’s diamond trade, played a vital role in strengthening global ties. GJEPC Chairman Kirit Bhansali noted that stabilising prices and renewed Chinese demand are promising signs for the global diamond industry. He emphasized that India’s strong manufacturing capabilities and adaptability put it in a favorable position for long-term growth.

After a prolonged slump, buyers are now accepting current price levels, leading to steadier sales. GJEPC Vice Chairman Shaunak Parikh believes this renewed demand could shift India’s diamond manufacturing back towards natural diamonds. Industry insights indicate a resurgence, particularly in smaller diamonds, though a full-scale revival is still some way off.

According to Ajesh Mehta, Convener of the Diamond Panel at GJEPC, this year’s Hong Kong trade shows marked the first positive development in four to five years. While Chinese demand hasn’t returned to previous highs, price stabilisation and increased movement in smaller diamonds are encouraging. “Confidence is slowly returning, especially in diamonds below 10 points and dossier sizes,” Mehta said.

A shift in Chinese consumer preferences is also influencing the market. Retailers are now incorporating smaller diamond accents in gold jewellery instead of featuring diamonds as centrepieces. However, Mehta believes this trend is temporary, predicting a gradual return of confidence in larger stones, such as 30 to 50 points.

Beyond China, emerging markets like Cambodia, Vietnam, Brazil, and Venezuela are showing growing interest in larger stones. While they cannot replace China’s dominance, they are contributing to new demand pockets.

Devansh Shah, Partner at Venus Jewel, observed an increase in inquiries at the Hong Kong trade shows from diverse markets, including Europe, Australia, the US, and the UAE. He noted that Chinese and Far East buyers remain highly quality-conscious, with round brilliant diamonds attracting strong interest, while larger fancy cuts and 3-carat-plus rounds were available on an order-only basis.

Although the Chinese market’s resurgence remains gradual, it presents growth opportunities for India’s diamond cutting, polishing, and export sectors. With strategic planning and market adaptability, India is well-positioned to navigate this evolving landscape and sustain long-term industry growth.

Source: DCLA

Swarovski bullish on lab-grown diamond business

Austrian jewelry brand Swarovski’s entry into the lab-grown diamond sector has seen a positive reception in the China market, signaling growing consumer acceptance and confidence in the product category, said a senior executive.

Since the launch of Swarovski Created Diamonds Swarovski’s lab-grown diamond product line in April, the company has found that Chinese consumers are gradually accepting the concept of laboratory-grown diamonds, which gives the brand huge confidence in the market, said Yvonne Chan, president of Swarovski Crystal Business Greater China.

Chan added that as the market has responded accordingly, the brand has seen a steady growth in sales figures. “In some of the better-performing stores, sales of Swarovski Created Diamonds jewelry can account for as much as one-fourth of the store’s jewelry sales,” she said.

The consumption of diamonds is diversifying and is no longer limited to bridal occasions, with an increasing number of female consumers showing interest in “self-rewarding “diamond purchases and usually more for daily wear occasions, Chan said.

“We believe lab-grown diamonds are ‘the diamonds of the future’, and that’s why they represent a strategic growth category for Swarovski,” she said.

According to data from consulting firm Bain & Company, China’s rough cultured diamond sales reached 1.4 million carats in 2021, with a market penetration rate of 6.7 percent. The figure is expected to reach 4 million carats by 2025, with a market penetration rate of 13.8 percent.

“We are delighted to be one of the first global brands to launch lab-grown diamonds in China in April, which marks a significant milestone in the company’s global rollout of fine jewelry collections,” Chan said. “China is undoubtedly one of Swarovski’s most important markets globally. Swarovski has long-standing ties of business and friendship with China that were forged three decades ago.”

Lab-grown diamonds, created by simulating the natural growth environment of diamonds, are high-quality synthetic gems with jewelry application value, said Sun Zhaoda, secretary-general of the superhard materials branch of the China Machine Tool and Tool Builders’ Association, adding that the emerging jewelry category is growing rapidly due to its eco-friendly and sustainable characteristics.

According to a recent white paper published by the association, the global cultured diamond supply chain is now largely concentrated in China, India and the United States. China leads in the production of rough cultivated diamonds, with over 22 million carats produced in 2023, accounting for more than 70 percent of global output. India dominates diamond processing, controlling 80 percent of the market, while the US remains the largest consumer market for cultivated diamonds.

“While China’s share in diamond processing is still relatively low, the country is exploring new green development models,” said Sun. “With increasing consumer acceptance of cultivated diamonds in China, the market for lab-grown gems is expected to grow significantly.”

Source: DCLA

Pandora in the Red as China Market Slows

Pandora reported a loss in the first quarter following global store shutdowns amid the coronavirus outbreak.

The company posted a loss of DKK 24 million ($3.5 million), compared with a profit of DKK 797 million ($115.8 million) the previous year, the Danish charm maker said Tuesday. The loss was driven by the global shutdown of all the company’s stores during the period as the COVID-19 pandemic spread, particularly in China.

“The Chinese market was in many ways challenging for Pandora in [the first quarter],” the company noted. “Pandora started to close physical stores due to COVID-19 from late January, and the logistics of the online channel were also disrupted.”

Global sales fell 13% year on year to DKK 4.17 billion ($606.1 million) for the January-to-March period, the Danish charm maker reported Tuesday. Revenue in the US slipped 7% in local currency to DKK 935 million ($135.8 million), while sales in China plunged 61% to DKK 212 million ($30.8 million) in local-currency terms.

Prior to the closures, the company saw positive growth in the first two months of the year in key markets including the US, the UK, Italy, France and Germany. Total revenue was up 1% for January and February, as consumers responded to the company’s new brand marketing.

Online sales were also strong, primarily during the lockdown period, growing 29%, Pandora said. The online channel grew by triple-digit rates in April.

Sales have improved since the end of the quarter, as stores began to reopen, the company noted. Although markets in China reopened in March, traffic was still weak, but demand strengthened “substantially” in April.

“Traffic into the stores is gradually improving and is getting closer to a normalized level,” Pandora said. The company has hired a new general manager for the region to help turn around performance and establish Pandora as a “unique and well-known brand” in China. The jeweler has also begun to reopen stores in Germany.

Pandora is preparing a number of commercial initiatives it plans to roll out as soon as the market situation strengthens.

“The group is now preparing for the recovery after the pandemic, and our strong performance in January and February makes us confident in the underlying brand momentum,” said Pandora CEO Alexander Lacik. “We have implemented cost and cash initiatives to ensure that we have the necessary financial strength for a strong commercial comeback when demand starts normalizing.”

The company will not issue financial guidance for 2020 until the market stabilizes and it can provide meaningful information, it noted.

Source: DCLA

Pandora in the Red as China Market Slows

Pandora reported a loss in the first quarter following global store shutdowns amid the coronavirus outbreak.

The company posted a loss of DKK 24 million ($3.5 million), compared with a profit of DKK 797 million ($115.8 million) the previous year, the Danish charm maker said Tuesday. The loss was driven by the global shutdown of all the company’s stores during the period as the COVID-19 pandemic spread, particularly in China.

“The Chinese market was in many ways challenging for Pandora in [the first quarter],” the company noted. “Pandora started to close physical stores due to COVID-19 from late January, and the logistics of the online channel were also disrupted.”

Global sales fell 13% year on year to DKK 4.17 billion ($606.1 million) for the January-to-March period, the Danish charm maker reported Tuesday. Revenue in the US slipped 7% in local currency to DKK 935 million ($135.8 million), while sales in China plunged 61% to DKK 212 million ($30.8 million) in local-currency terms.

Prior to the closures, the company saw positive growth in the first two months of the year in key markets including the US, the UK, Italy, France and Germany. Total revenue was up 1% for January and February, as consumers responded to the company’s new brand marketing.

Online sales were also strong, primarily during the lockdown period, growing 29%, Pandora said. The online channel grew by triple-digit rates in April.

Sales have improved since the end of the quarter, as stores began to reopen, the company noted. Although markets in China reopened in March, traffic was still weak, but demand strengthened “substantially” in April.

“Traffic into the stores is gradually improving and is getting closer to a normalized level,” Pandora said. The company has hired a new general manager for the region to help turn around performance and establish Pandora as a “unique and well-known brand” in China. The jeweler has also begun to reopen stores in Germany.

Pandora is preparing a number of commercial initiatives it plans to roll out as soon as the market situation strengthens.

“The group is now preparing for the recovery after the pandemic, and our strong performance in January and February makes us confident in the underlying brand momentum,” said Pandora CEO Alexander Lacik. “We have implemented cost and cash initiatives to ensure that we have the necessary financial strength for a strong commercial comeback when demand starts normalizing.”

The company will not issue financial guidance for 2020 until the market stabilizes and it can provide meaningful information, it noted.

Source: DCLA