De Beers banks on ‘diamonds are for me’
Anglo American unit De Beers said its 2019 marketing budget will exceed last year’s figure of $170 million and will focus on the biggest market the United States, where women lavishing diamonds on themselves has boosted sales.
While U.S. demand has held firm, the diamond market has weakened elsewhere and trade tensions and protests in Hong Kong have dented sales in China, the second largest diamond market.
But luxury groups see potential for growth in jewellery demand, as shown by LVMH’s nearly $14.5 billion offer, made public on Monday, to buy Tiffany & Co.
Esther Oberbeck, group head of strategy at De Beers, the world’s biggest diamond producer by value, said in an interview the company was about to launch new marketing campaigns, focused on the U.S. and China.
She did not specify the budget, but said De Beers’ 2019 spend would exceed last year’s $170 million and was the highest in more than a decade.
The campaigns, which she said would concentrate on “self-purchase and the bridal market”, are based on research carried out for De Beers, published on Monday.
It found the share of U.S. women buying their own engagement ring doubled from 7% to 14% over the five-year period 2013-2017 and that women on average spent a third more than men – $4,400 compared with $3,300.
De Beers sells rough diamonds and jewellery through its Forevermark brand.
Its research anticipates the rough diamond market will recover from a period of oversupply as some mines reach their end of their lives, notably Rio Tinto’s Argyle mine in Australia.
Global consumer demand for diamonds rose by 2% in 2018 to $76 billion and, in dollar terms, China and the United States were the fastest-growing regions, both increasing by 5% year on year, it said.
Demand for diamond jewellery in the U.S. rose by 5% to $36 billion, representing just under half of total global diamond jewellery demand, underpinned by “solid macro-economic factors”, the De Beers research found.
Diamonds are still the leading choice for engagement rings, whether between same-sex or heterosexual couples.
But demand for diamond jewellery as a gift to mark all kinds of special occasions, including rewards to oneself, now outweighs demand directly related to weddings, De Beers said.
(By Barbara Lewis; Editing by Ed Osmond)