The diamond industry has a size problem.
Instead of splashing out on a ring or necklace featuring one big, bright diamond, shoppers are increasingly choosing pieces with several, smaller gems, which are often lower quality, while selling jewelry with smaller stones has been a good way for retailers to save money.
As a result, the diamond content in jewelry has been shrinking since 2011 back to a level last seen almost a decade ago, creating a headache for miners.
It is part of the reason the jewelry industry has been struggling to grow.
The amount spent on diamond jewelry items has stayed at about US$80 billion a year since 2014, De Beers said.
Less money is being spent on diamonds partly because jewelers are cutting back amid higher overheads and other costs, while Asian consumers are accepting lower-quality stones, analysts said.
The anemic growth has forced gem producers to respond.
Top miner De Beers last year raised its marketing budget to US$140 million, the highest in almost a decade.
The campaign reversed spending cutbacks that followed the collapse of De Beers’ monopoly in the early 2000s, leaving the industry splintered and unwilling to pay for promotion that could aid rival miners.
The sector also launched the Diamond Producers Association in 2015.
The lobby group, which raised its budget almost 10-fold last year, was set up to revive the glory days of 50 years ago, when slogans like “a diamond is forever” were ubiquitous in popular culture.
Consultant Bain & Co in December last year warned that demand could stagnate for another decade unless the industry increases marketing spending.
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