The rapid industrialization of China and India will be good for the diamond business, and in the next decade demand will break through the peak reached in 2006, according to an analyst at Bain & Co.
"It is true that the share of the diamond jewelry in the overall jewelry market consumption in India and China at 32% and 29% respectively is lower than that of United States and Japan (52% and 51%)," said Olya Linde, a principal at Bain & Company, who spoke to Rough and Polished this month.
"However, there exists a relatively recent example of stimulating demand for diamonds through creative marketing and focused effort by the industry."
Linde notes that Japan's share of diamond engagement rings, out of all engagement rings purchased in the country, was just six percent in 1966. By 1990 it reached 80%.
Linde estimates that currently only 30% of Chinese brides have diamond engagement rings.
While the future of diamonds may be bright, Linde notes there are been no successful investment vehicles for diamonds, which are less fungible than gold or other commodities.
Unlike gold which has rocketed to new highs due to the introduction of ETFs, diamonds have unique properties related to size, clarity and aesthetics that make them less interchangeable than other commodities.