Blessing in disguise: pandemic and a new interest in diamonds

Aruna Gaitonde

The period 2020-21 of the global diamond and diamond jewellery industry could be termed as the most trying and arduous ever faced in recent times. When COVID-19 made its appearance, the diamond industry as part of the luxury sector was majorly impacted, due to lockdowns, travel restrictions and other hurdles.

This, in turn, resulted in demand for diamond and diamond jewellery becoming localized which again put a brake on the growth of the industry globally, negatively impacting the economies of most countries.

But, the diamond industry, slowly and surely, returned to a strong position towards the 2020 year-end, bring the much-needed cheers and confidence across global. Though ALROSA’s diamond production in Q4 2020 recorded only 7.1 million carats against 8.8 million carats in 2019, while sales went up to 17 million carats compared with the previous quarter against 8.2 million carats in 2019. For 12 months of 2020, diamond production amounted to 30 million carats against 38.5 million carats in 2019, sales – 32.1 million carats, against 33.4 million carats in 2019. De Beers’ fourth-quarter rough diamond output too dropped by 14% to 6.7 million carats, driven by continued planned reductions in response to the lower demand for rough diamonds caused by the Covid-19 pandemic and operational challenges at Orapa, in Botswana that led to lower than expected production.

But the major Miners – De Beers and ALROSA – who had slowed down and cut production, returned with a vengeance and so did the diamond and diamond jewellery manufacturers. Demand picked up in the consuming markets too, and the industry was on ‘return mode’, with sales showing an upturn in the economies with the global retail sector booming.

Diamond and diamond jewellery, which was thought of as the last thing on consumers’ minds during the pandemic, had consumers returning with renewed interest. This saw the retail sector investing in stocking up on diamond jewellery with growing confidence. And, as this rubbed on to the consumers, demand for jewellery too increased multifold, both in physical stores as well as in online platforms across the world.

Happy days were back again… gifting jewellery picked up, engagements and weddings too upped the demand quotient bringing the industry’s retail activities to ‘a festival of sorts all over the globe.

The US, being the largest diamond jewellery market, saw the demand for jewellery and watches reach the highest demand, followed by consumers in China and India. According to reports, consumers in the US, China, and India preferred to buy diamond jewellery for engagements and weddings, with the pandemic not making any changes in their decisions. With unspent extra money on hand, consumers were ready to spend more on diamond jewellery than they would have before the pandemic crisis. So, despite any global misfortunes bringing temporary despair, emotional connections with diamonds are forever, says a media report.

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Source Rough&Polished