So far, 2018 has been a positive year for the diamond trade, with the US and China, the two largest diamond-jewelry markets, showing steady growth. In fact, in China, the jewelry-retail sector has experienced positive results after three years of decline.
Sales stagnated between 2014 and 2017 while the Chinese economy was transitioning from being dependent on exports and infrastructure investment to being more reliant on consumption. The government’s clampdown on corruption under President Xi Jinping also impacted diamond purchases. That program targeted the practice of offering officials luxury gifts such as expensive watches or wine, making it almost taboo to display any form of wealth, including jewelry.
Consumers seem to have acclimated to that new normal and gained confidence to spend. The government, meanwhile, having gotten its message across, has also relaxed its anti-corruption campaign. And while the transition to a consumer-centric economy is by no means complete, technology and the younger market are having a significant effect on China’s culture and spending habits. As a result, the major Hong Kong-based jewelers — Chow Tai Fook, Chow Sang Sang and Luk Fook Holdings — all reported double-digit increases in the last fiscal year, with improvement continuing through June.
However, growth is set to slow in the coming half-year, which includes important shopping periods such as the October 1 National Day holiday, Christmas, and the Chinese New Year, which this year falls on February 5.