By Liu Chang
In the first six months in 2009, diamond sales reached $300 million, putting China along with the US and Japan to become the three biggest diamond consuming countries.
The global economic crisis has resulted in a world-wide slow-down of diamond sales. From January to May, the diamond export and import volumes in the US and Japan have dropped by 49 percent and 24 percent respectively. China is the only country that has witnessed a growth in diamond consumption. Sales of the prized gem have increased 12.7 percent compared with the same period in 2008.
According to Liu Jianhua, an official from the Diamond Department of the Gems and Jewelry Trade Association of China (GAC), the annual diamond consumption in China has exceeded 25 billion yuan, and the figure is growing exponentially. Experts predict the diamond market in China is going to catch up with that of the US, and China is poised to become the next biggest diamond consuming country.
Wang Fei, researcher at the Cheungkei Research Center for Luxury Goods and Services (SITE) in the University of International Business and Economics, said that the rapid growth of diamond market is due to both supply and demand.
Diamonds, once a luxury rarely owned by a Chinese family, has now become a must for Chinese newlyweds. According to Wang, the largest population of diamond buyers is newlywed couples born in the 1970s and 1980s.
They are heavily influenced by western culture, where diamonds are seen as a token for love and loyalty. The second-largest customers are couples born in the 1960s who are financially more capable of affording a diamond than they were 20 years ago. The last group to buy diamonds are those who see the investment value in diamonds, which becomes clear in the economic downturn where currencies are depreciating faster than ever.
Although a rapidly growing market, Liu of GAC points out that the current diamond market is not a mature one, saying diamond consumption in China is still for sensational reasons. A true mature diamond market should be one driven by the diamond’s investment values, Liu said.
Liu also mentioned that there’s no leading brand in the Chinese diamond market which has nationwide recognition. Diamond enterprises are still limited to local markets. Brands such as Boee Jewelry and Diamond Charm, which are originally based in Shenzhen, are popular among the southern provinces in China, while Northern Chinese prefer brands like Caibai Jewelry, which is primarily based in Beijing.
Information about diamonds are not only limited to brands, Wang says. Diamond buyers are also said to be ignorant of the pricing system for diamonds, as well as the basic diamond evaluation standards, such as the 4 C standards (cut, color, carat and clarity). Wang believes the Chinese market is still a low-end market, where the customers have limited purchasing power.
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