The outlook for the diamond industry continues to dull as it is losing ground in its second-largest market — China. Besides the global economic factors all industries are facing, two in particular are affecting sales in the region.
This article takes a closer look at why this market is suddenly giving diamonds the cold shoulder…
The Lab-Grown Fad Has Gone International
Earlier this year, we covered how lab-grown diamonds have seen a recent surge in popularity. And while not everybody is convinced that synthetics are as good as the real thing…
Many younger Chinese are going lab-grown when it’s time to pop the question. It is to such an extent that the diamond industry must acknowledge the impact on their bottom line.
In the Chinese edition of Financial Times, De Beers’ CEO, Al Cook, spoke on how the country’s market was “challenging.”
However, jewel sellers have another issue on their hands…
Their most important customer base is shrinking in mainland China…
Is it a Diamond Industry Issue or a Commitment Issue?
Another obstacle the diamond industry faces is that fewer Chinese couples are getting married at all.
This is mainly due to the tradition of men paying the bride’s family a large dowry before nuptials. These dowries can be upwards of $70,000 — more than the average rural man living in the country makes in a year.
THAT IS BEFORE WEDDING EXPENSES LET ALONE, A DIAMOND RING.
Consequently, the marriage rate has seen a downward trend over the past couple of years. The costly payment to the bride’s family makes the less expensive synthetic stones even more appealing…
These factors have made investors in the diamond industry uncertain as well and there is a general move towards gold.
Although leaders in the industry have explained why they are struggling, they have yet to offer any solutions thus far.
Hopefully, their recovery plan is more than a diamond in the rough.
Be Great,
GCTV Staff
Disclaimer: This content is intended to be used for educational and informational purposes only. Individual results may vary. You should perform your own due diligence and seek the advice from a professional to verify any information on our website or materials that you are relying upon if you choose to make an investment or business decision. Investment, real estate, and business involve great risk and there is no guarantee of performance or results.We are not attorneys, investment advisers, accountants, tax professionals or financial advisers and any of the content presented should not be taken as professional advice. We recommend seeking the advice of a financial professional before you invest, and we accept no liability whatsoever for any loss or damage you may incur.
