The diamond industry has seen significant fluctuations in recent times with prices dropping nearly 6% in the current year.
Vipul Shah, Chairman of the Gem & Jewelry Export Promotion Council (GJEPC), attributes this decline to the demand and supply dynamics.
In an interview to CNBC-TV18, he highlighted that while the US market has performed well, the Far East, especially China, has seen a notable drop in demand post-COVID.
Given that China and surrounding countries account for 40% of the market share, this decline has had a substantial impact.
Shah believes that a unified approach among stakeholders, coupled with substantial marketing investments, is crucial to address these challenges.
Shah suggests that rebuilding consumer confidence and re-establishing the emotional connection with diamonds through targeted marketing campaigns can help rejuvenate the segment.
He is confident that with strategic spending on marketing, the industry can see a positive turnaround.
On the other hand, Smit Patel, Director at Green Lab Diamonds, highlighted the remarkable rise of lab-grown diamonds over the past decade.
Unlike natural diamonds, lab-grown diamonds have gained popularity through word-of-mouth and transparency about their manufacturing process.
Patel notes that the surge in interest has not been driven by extensive marketing but by consumer curiosity and the accessible information available online.
However, Patel acknowledged that pricing remains a challenge for the lab grown diamond market.
He believes that strategic planning and market prediction will guide future industry stability.
These are the excerpts of the discussion.
Q: First of all, on the prices itself, because that really seems to be a big blazing headline with the kind of decline that we’ve seen in diamond prices. What would you give that to?
Shah: The prices have gone down because of demand and supply. There were a lot of challenges last year and there was a correction in prices. If you see US markets have performed well as far as our exports are concerned, but at the same time, in far east where China is one of the major consumer and post COVID, it has not picked up at all. So that was the main cause because 40% of the market share is with China and surrounding countries. So that was one of the reasons for the demand supply issue. In the natural diamond process, the supply can be controlled, so that’s a positive side.
However, I am confident that the US market will perform well for this year as well as for far east we’ll be working hard on the Chinese market, we need to spend more on marketing and we’ll make sure that the diamond desire is there for everyone.
Q: Diamond as a product has been all about emotions, sentiment, pushing it through in various forms through the year. But would you say that there has been a bit of a lack when it comes to advertising, campaigning, marketing, diamond in the last couple of years, perhaps?
Shah: Yes, I personally feel this is a segment where we need to work together. All the stakeholders of this industry need to come together. There has to be enough spending which needs to be done because we need to understand in which market why the sentiments are down and then we need to run the program accordingly to that market. Currently, we don’t see any issue as far as US markets are concerned, the demand over there is strong. But as far as Chinese market is concerned, you have to understand one thing, the Chinese people post COVID have lost confidence on this segment as such because during COVID times they found it difficult to encash it. And that was one of the major reasons. So we need to bring back the consumer confidence in this product and we need to bring back emotions with marketing campaigns. I’m sure with a good amount of marketing spend, this segment will be doing good.
Q: Within the Indian market as well, the industry has been slightly jittery. We’ve seen that last year, the supplies were stopped at one point in time to ensure that the markets could be balanced well. For the Indian markets now, whether it’s about imports, exports, or the domestic demand for diamonds, how are you looking at all of those numbers?
Shah: The domestic market has really performed well. We’ve seen that it is growing and more than 3,000 new stores are coming up. But yes, there is a slight bit of slowdown and I think it will consolidate and it will take some time. But domestic market looks good for the year 2024.
Q: Lab grown diamonds is an area which has taken the world by a storm with the kind of awareness, understanding, almost everybody Googling up, wherever you sit people are discussing on what the lab-grown diamonds are about and how much are they priced and what all and where all can you find them etc. But I really want to understand, from 2015,…