Millennials spent more than $25 billion on diamond jewellery in 2015
De Beers Group, the world’s leading diamond production company, has announced that millennials aged between 15-34 spent more than US$25 billion on diamond jewellery in 2015, more than any other generation.
This comes from the company’s Diamond Insight Report 2016.
In the four largest markets (US, China, Japan and India), which makes up 73 percent of global diamond jewellery demand, the Millennial generation account for more than half of the total retail value of new diamond jewellery.
This is just over 220million people, and the report outlines that amazingly, this generation is yet to reach its most affluent life stage. That is expected to happen in another 10 years, which means this generation is also one of diamond sector’s largest growth opportunities.
With such a huge figure, there are undoubtedly a number of myths as to why it is so high. De Beers have gone to the effort of making sure those myths are knocked back – the pick of the bunch? Millennials have a different attitude to romance and the romantic significance of diamonds.
Well, take it away De Beers: “Millennials share many of the same views and attitudes to life, love, marriage and family, and lifetime values as older generations, but these manifest themselves later in their lives, as they reach financial maturity later.”
The report also identifies nine fundamental trends that will shape the future of the industry over the next 10 years:
- Global economic growth will continue to be volatalie, with business becoming more highly leveraged, markets interconnexctiong, foreign exchange rates fluctuating and geopolitical instabilitiy increasing.
- AConsumers, particulaty Asian consumers from China and India, will drive positive consumer demand growth. With an increase in international travel, national demand is not strictly restricted to domestic.
- Retiriing and elderly consumers are expected to generate the majority of global urban consumption growth by 2030. An increase in focus on self-expression will see design and branded jewellery continue to increase in relevance. Importantly, consumers are becoming more knowledgable meaning they will push for ethical products more and more
- Global luxury players, such as retail focused on branded diamond jewellery, will be able to differentiate themselves from generic proportions
- Financial challenges will persist, with a tighter grip on lending standards and an increased pressure on outdated and unprofitable business models to be adapted. There will also be a clearer transparency of supply chains through digitalisation, coupled with rigorous professional standards.
- Mines are getting deeper, which means more production is going to come from these costly operations and additional investment from producers will be needed to drive productivity.
- There will be a “relatively stable” and predictable diamond production
- Producing companies will face increased pressure in maximising the value of diamond assets
- And finally, the capacity to produce synthetics for gem applications is likely to continue to expand meaning that over time, production cost and value of synthetics is expected to reduce.
Looking to the future, De Beers state that as with most things – consumer attitudes to diamonds is entirely unpredictable. New demographics and company innovation will have a huge say in the matter as demand could broaden or even shrink.
Visit the De Beers Group website, where you can read the Diamond Insight Report 2016.
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