Diamonds reimagined: Luxury jewelry’s resilience and growth in China

Editor’s note: This story is part of Jing Daily’s latest report, Diamonds Reimagined: How China’s New Generation Redefines Luxury Through Self-Fulfillment. Download the report to unravel the intricate market trends, consumer behaviors, and economic drivers propelling the natural diamond sector towards sustained growth. In 2023, China's economy grew by approximately 5.2%, a noteworthy figure given the OECD put global growth at 3.1%. Despite a decade-long deceleration, China’s luxury sector exhibited remarkable resilience, expanding by 12% YoY, driven by fashion, lifestyle, and jewelry, with the latter growing sales between 15% and 20%. The luxury jewelry market saw significant gains, with Richemont, the parent company of Cartier and Van Cleef & Arpels, reporting a 25% increase in sales in mainland China, Hong Kong, and Macau for the last quarter of 2023. Chow Tai Fook, a Hong Kong-based jeweler, although facing a revenue contraction of 4.3%, remains a powerhouse, accounting for 7.6% of total jewelry sales in China and achieving over €10 billion ($10.9 billion) in revenue in FY 2023. Its aggressive expansion, growing from 5,700 outlets in 2022 to over 7,200 by March 2023, underscores its market dominance. Urbanization and rising disposable incomes have fueled demand for luxury goods, including diamonds. Between 2008 and 2018, diamond jewelry sales in Greater China expanded at a 10% compound annual growth rate (CAGR), outpacing global averages and establishing China as a critical market for diamonds. While 2023 presented challenges including Covid-19 disruptions, stagnant income levels, and a struggling property market, which led to an 18% contraction in the jewelry sector, the future looks promising for China’s luxury market. Opportunity amid a rising middle class Driven by an expanding middle class and a rise in high-net-worth households. The World Bank projects that by 2030, nearly 70% of China’s population could belong to the middle class. Moreover, the Centi-Millionaire Report 2023 forecasts a surge in ultra-high-net-worth individuals in key Chinese cities. Luxury diamond jewelry continues to captivate Chinese consumers. The Diamond Insight Report 2023 by De Beers Group revealed that diamonds are the third most-coveted gift category among Chinese women. Additionally, 70% of affluent female consumers prioritize diamond jewelry in their luxury purchases. Bain & Company predicts that mainland China’s share of the global luxury market will rise from 16% in 2023 to at least 20% by 2030, with the luxury jewelry segment expected to expand at a 3% CAGR from 2024 to 2028. This growth is propelled by increasing wealth among high-net-worth individuals and a burgeoning retail landscape in less-developed urban areas. Despite declining birth rates and a focus on individualism leading to fewer marriage registrations, diamond engagement and wedding rings remain integral to the Chinese wedding industry. In 2022, 75% of bridal diamond jewelry purchases were for engagement or wedding rings. Broadening the appeal of diamond jewelry Beyond the bridal market, evolving attitudes towards relationships and love continue to drive diamond jewelry sales. The China Diamond Acquisition Study 2023 commissioned by De Beers highlighted that 71% of Chinese women see diamonds as a timeless symbol of love, and 78% of non-bridal diamond gifts mark relationship milestones or express love and commitment. This presents an opportunity for diamond brands to expand into the non-bridal segment, promoting diamonds as symbols of love beyond wedding traditions. China’s macroeconomic landscape, coupled with an evolving stance on luxury and diamond jewelry, presents a dynamic market with both challenges and opportunities. As China’s middle class and HNWIs continue to rise, the demand for luxury jewelry, particularly diamonds, is poised for sustained expansion. Brands must navigate economic shifts while tapping into the evolving consumer sentiments to ensure long-term growth in China’s vibrant luxury market.

Diamonds reimagined: Luxury jewelry’s resilience and growth in China

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Published June 17, 2024

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Diamonds reimagined: Luxury jewelry’s resilience and growth in China