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World Federation Of Diamond Bourses

Interview with Edahn Golan, Diamond Industry Analyst

Q. What’s the state of the diamond industry today?

The diamond industry is going through a difficult period and a lot of it has to do with changes that occurred during COVID.

Firstly, there is a slowdown in China’s economy, and that is affecting demand for diamond jewelry.

In the US, consumer demand is in a post-party state after the record increase in demand 2021-22. The diamond industry is currently experiencing a typical decline, of the kind seen in 2011 after the 2010 highs. Our projection is for a recovery in Q4.

The one issue that is truly challenging the industry is the increasing prevalence of lab-grown diamonds. Currently, sales as measured by units sold are double digit year over year. However, due to the sharp decline in prices, gross profits from LGs are not catching up with the increase in unit sales. In some areas they are even declining.

That indicates that there is a growing gap in consumer perception of fine luxury jewelry and fashion jewelry. We should expect that gap to grow and that is good news for the diamond industry.

Q. How will the G7 sanctions affect the industry?

At first, it will cause some disruption as everyone – traders, manufacturers, miners, and government official – learns to operate with the system. However, once fully incorporated into the industry’s everyday operations, there will be great benefits for the industry.

The ability to share with trade clients and consumers a diamond’s origin is underrated. One of the major challenges the diamond industry has faced in recent years, and is yet to address effectively, is the issue of a diamond’s source.

Being able to demonstrate in uncertain terms that a diamond was fairly mined and fairly polished will contribute a significant element to the diamond story, to the credibility of the diamond industry, and as a result to consumer confidence.

Q. China- what’s happening now and how long if ever till the market recovers?

China’s economy is forecasted to rebound next year. We are already seeing a rise in demand for gold jewelry, and diamond jewelry will follow. The decline in weddings in China is one of our concerns. That is hurting demand for bridal jewelry.

Q. Younger generations- are they buying diamonds today? Will they buy in the future?

Yes! Especially if the industry invests smartly in marketing. That requires market research to understand what drives consumers, and I hope we will see more of that.

Q. It is said that we’re always fighting yesterday’s battle. What are we not looking at and what should the industry be doing to face the future?

Be agile, remember that change is constant, unstuck from the old notions of “this is how we always did it,” while keeping true to the basics. Not fall for fads but understand real trends and act on them. It’s tricky, not simple at all. The best recommendation would be to always be curious.

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