The retail sales of diamonds have recovered from a decline during the COVID-19 pandemic.
The industry recorded a 14% drop in sales during 2020. Diamond sales are now 11% higher than in 2019 and 29% higher than in 2021.
A new report published by Bain & Co. and the Antwerp World Diamond Centre notes that revenue in the diamond mining industry increased by 62% during last year. The diamond polishing segment reported similar increases with 55% growth recorded last year. Both metrics are above their 2019 rates.
The report’s author, Olya Linde, is a partner in Bain’s energy and natural resource practice.
“Throughout the value chain, the industry experienced a recovery and boom at an unexpected speed, which has taken insiders by surprise,” Linde wrote.
Uncut gems were in high demand following worldwide lockdowns and subsequent shipping constraints.
In June of 2021, Anish Aggarwal of the diamond advisory firm Gemdax told Bloomberg, “There are supply shortages at the moment. That’s creating a sense of scarcity at every stage of the pipeline.”
The increase in diamond purchases stems from the “urge for emotional gifting, increased savings and expansion of stores into additional cities,” according to the report.
Economic uncertainty and store closures impacted the industry at the height of the pandemic in 2020.
Today, “ninety percent of jewelry retailers are now equipped to do e-commerce and the digital share of market reached 23 percent in 2020,” reports WWD. “Digital sales also underpinned the 19 percent increase in diamond jewelry sales in China in 2021 as retailers joined online marketplaces and promoted jewelry on social networks.”
De Beers, one of the world’s top diamond producers, has raised its 2022 sales prices by roughly 8%. The company implemented the biggest increase — about 20% — on smaller, less expensive stones. The price of larger stones increased by 5%.
Some industry experts believe the upturn is not a long-term, sustainable trend.
“Price fluctuation is unavoidable in any market. After an extended downturn, it’s nice to have a rise,” Edahn Golan of the Natural Diamond Council told Forbes. “Now, it is in the hands of the industry to maintain the power of diamonds and continue to drive growth. Careful management at all times will hopefully avert a diamond price bubble.”
The Bain-AWDC report still expects increasing demand for diamond jewelry and rough diamonds during the first half of 2022.