While the diamond industry suffered during the Covid-19 crisis, it still managed to keep its sparkle. Lockdowns, travel restrictions and economic uncertainty pushed diamond jewellery sales down by 15% in 2020 with most of the decline happening in the first and second quarters. But faced with store closures, diamond retail sales pivoted online, and benefited from consumers who could not spend on travel or experiences choosing diamond jewellery instead. Demand returned during the fourth quarter, culminating in a strong holiday season across the globe.
The industry proved its resilience in the face of an economic downturn as consumers continue to see its value. The boost was driven by Holiday jewellery sales, particularly in the US and China, which saw a 5-10% and 15-20% rise in the fourth quarter, respectively, year-on-year. Diamond jewellery is expected to perform better than the global personal luxury market in 2020, with only a 15% drop compared to a 22% decline in luxury.
Rough diamond production continued its downward trend, falling to 111 million carats. After peaking at 152 million carats in 2017, rough diamond production has declined by about 5% per year. In 2020, production decreased by 20% compared to 2019 levels. Notwithstanding changes, the mix of diamonds remained largely constant, with medium and large diamonds accounting for 25% of production volume in carats but around 70%-80% in value in US dollars.
These are among the findings of Bain & Company and the Antwerp World Diamond Centre’s (AWDC) tenth annual Global Diamond Report 2020-2021, confirmed in Antwerp’s 2020 performance.
“In 2020 the diamond industry as a whole unexpectedly benefited as consumers unable to spend on experiences or travel used those funds for items such as diamonds, which are considered a tangible physical investment,” said Olya Linde, a partner in Bain & Company’s Energy and Natural Resources practice. “Our research found that more than 75% of consumers intend to spend the same amount or more on diamond jewellery than before the crisis, indicating a strong, ongoing emotional connection with the diamond story.”