Diamond Industry on Path of Recovery

For the Indian and global diamond industry, past years Following turbulent conditions in 2020, the diamond industry proved to be brilliant and resilient, and delivered a spectacular showing in 2021.

Every sector of the diamond industry performed very well in 2021 and emerged from the Covid-19-induced crisis well-positioned for future growth. In 2020-21, the diamond industry invested heavily in technology to gain operational efficiency, create marketing and consumer experiences that attracted buyers, and accelerate e-commerce schemes. Even smaller mom-and-pop retailers added online sales platforms to reach consumers who couldn't shop in person or travel due to government-instituted health measures.

To add to the positive note, consumers were ready to spend. They were flush with cash from buoyant capital markets and economic stimulus programs, and eager to spend it on meaningful gifts for their loved ones (or rewards for themselves). Diamonds hit an emotional chord, which had been carefully cultivated by years of targeted marketing campaigns and storytelling. Diamond jewellery was also easier to access than other luxury and experience-based spending options.

Strong retail demand for diamond jewellery drove up prices and profit margins along the value chain. As rough diamond sales increased, miners increased production volumes and pulled from inventories to keep cutters and polishers busy. Healthy demand and price recovery for polished diamonds helped the midstream achieve decade-high margins.

In 2021, the industry had a renewed sense of value, which it answered through partnerships, consolidation, and technology. Now, every player along the value chain must add value-or remove hardship-on the path from mine to market.

Reversal in 2021: