by Martin Ritchie
(Bloomberg) — De Beers SA, the world’s biggest diamond producer, is banking on Chinese generosity to help reverse a sharp slowdown in the country’s demand for jewels.
“We’ll push behind the big occasions, so weddings and anniversaries, which are becoming an increasingly important occasion for gift-giving in China,” Stephen Lussier, executive vice president of De Beers, said in an interview Tuesday in Hong Kong. “We see the gift market as more important and interesting than self-purchasing.”
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Prices for rough diamonds have slumped about 15 percent this year as Chinese demand growth has shrunk amid an economic slowdown, stock market turmoil, and an anti-corruption campaign that’s stifled purchasing of luxury goods. De Beers is boosting expenditure on marketing in China to prop up growth and attract new consumers, targeting women between the ages of 18 and 29, and buyers in third- and fourth-tier cities.
Growth in China’s less developed cities in inland provinces will be much stronger than in areas that already have mature diamond markets like Beijing or Shanghai, he said.
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China’s diamond jewelry market grew six percent in 2014, amid a rapid expansion of stores across the nation. That has slowed to three or four percent this year, Lussier said, forcing world producers to cut prices and pare production.
“The big jewelery chains have still added stores this year, but their desire is to take a pause in expansion,” Lussier said. “The overall network will remain the same size but they will make some smart decisions about where they want their stores, rather than this dash to get everywhere.”
