Challenging Times More Than Just A Challenge
After a year of challenges and ongoing complaints by diamantaires of the difficulties they face, there appears to be something of a dichotomy between what they say and the reported strength of diamond jewelry retail sales.
Just this week, in its latest update, Russian diamond mining giant ALROSA reported that global jewelry sales rose 4 percent overall in the third quarter of 2018. North America, the largest diamond jewelry market, showed a 4 percent sales increase in Q3 compared to the same period last year. And the Asia Pacific region, including South East Asia and India, despite a slowdown still posted an increase of 3 percent.
And last week, Bain & Company wrote in its report on the state of the global diamond industry in 2017 and the first half of 2018 that global diamond jewelry sales grew last year "fueled by strong macroeconomic fundamentals in the U.S., resurging demand from Chinese millennials, and increasing sales in the self-purchasing category in China. This healthy demand led to an unprecedented jump of nearly 20 percent in diamond production volume last year and supported a 2 percent increase in cutting and polishing revenue, putting the segment on positive ground".
Previously – at the September edition of the Hong Kong Jewellery and Gem Show – De Beers reported record demand for diamond jewelry in 2017 of $82 billion.
Many diamantaires are distinctly unimpressed with the reports, however, talking about an ongoing drop in activities – whether in Ramat Gan, Mumbai or Antwerp.
"I sometimes feel that everyone else must be selling and I am the only one feeling the pinch," said one, ironically expressing a sentiment widely felt. Meanwhile, another dismissed the use of the word "challenges".
"I understand why the word is used because it makes us feel that it is temporary and something to be overcome," he said. "But we should be honest and say these are not simply challenges, but very difficult times. Many of us are going through a tough period that has lasted for some time."
Many diamantaires also complain that the bourses should be doing more to aid them, though veteran industry members are somewhat dismissive of those calls. "I have been in the industry for more than 40 years, and I must say that this feeling that the bourse needs to do something to help companies is relatively new, to me at least. I always believed that it was up to me to find and develop business," said one.
"Of course, a bourse has strength in numbers, especially the larger exchanges, and that can be leveraged to bring benefits to its members. But as with any business, it is up to the owners and management to explore new channels."
That's not to say that the bourses are indifferent to the fate of their members. Inter-bourse trading events, for example, take place at many bourses, aimed particularly at smaller companies that don't have the financial means to market themselves. The bigger bourses in particular also provide educational events aimed at helping members to learn about new marketing methods, such as Internet sales.
Part of the frustration among many diamantaires derives from a feeling that the routine marketing channels do not appear to be producing strong enough results. Trade shows are expensive and often don't justify the expense of taking part. Orders for diamonds are smaller than they used to be, with customers increasingly opting for just in time ordering that satisfies immediate demands. And with rough on a continuous rise, and an increasing number of diamond miners selling goods at tenders there are few, if any, polished bargains.
"I don't know what the situation is at the larger companies," said one small-scale manufacturer. "I imagine it must be easier than for the small and medium-size manufacturers. This is definitely one of the tougher periods that I have known. We can only hope that 2019 will be easier."