Market Analysis

2019 was a challenging year for the diamond industry. Diamond gemstone production amount increased by about 20% compared with 2016 and 2017-2018. However, increased production did not lead to an increase in diamond jewelry’s demand. Performance is mainly exacerbated by the increase in trade barriers between the United States and China, political unrest in major trading areas such as Hong Kong, and the emotional deterioration of customers in major areas. The performance has been improved at the end of 2019, and it is expected that the market can be recovered in 2020.

However, the COVID 19 hit the entire market. In the first half of 2020, diamond sales have dropped 15% due to the shutdown of major cities and economic recession. Upstream and midstream companies also suffered an operational miscarriage, such as mining closures, restrictions on the movement of cross-border goods, and cancellation of sales, disrupting the supply and demand of the diamond market. It shook the supply chain, such as distribution collapse, closure, and shutdown. Therefore, diamond industry participants and marketers have to respond to marketing changes as below.

Up to 20% of diamond retail sales in 2020 (increased from 13% in 2019) are generated online, and most consumers (70%) can search and select jewelry online before purchasing in the store. As this trend is unlikely to be completely reversed after the pandemic, retailers have to invest in digital function, enjoyable online shopping experience, and omnichannel or physical interaction. The business industry has to support diamond certificate initiatives, warranty programs, and customer reviews to promote products and online service demand for online shoppers.

Furthermore, industry participants have to restructure their business models and fit the long-term trend and operational reality. As the result, the business must accept digital technology for long-term growth prospects, and research new marketing concepts to engage consumers differently.

Although most consumers think COVID 19 pandemic will not affect their long-term interest in diamond jewelry, COVID 19 has accelerated an emerging trend in marketing. The diamond market has become more complicated due to the reason of strong market share competition, low purchase frequency of each diamond consumer, new generation product requirement changes, etc. Furthermore, the diamond industry is not investing sufficiently in marketing compared with other premium and luxury fields. The era of uniform marketing has been over, and developing customized analysis-based strategy will become the major competitive advantage in the future. To get success in the post-crisis environment, marketers need to monitor changing customer emotions and priorities thoroughly and utilize data analysis, so a solution that can accelerate personalization is necessary.