The potential recovery of the Chinese diamond market could have substantial implications for the global industry, especially given China's status as a leading consumer of luxury jewelry. Below, we’ll dive into some detailed insights and figures to provide a clearer picture of the impact of China’s rebound on the worldwide diamond trade.

Economic and Market Conditions in China

GDP Growth and Consumer Spending: China’s GDP growth rate, forecasted at approximately 5% for 2024, provides a positive economic backdrop for luxury spending. Consumer spending on luxury items is expected to see a lift due to increased disposable income, with an anticipated 15% increase in spending on jewelry and luxury goods by 2025​.

Market Shift to Lower-Tier Cities: An essential component of China’s recovery involves the rise of lower-tier cities as critical areas of growth. Cities beyond major metropolitan areas have demonstrated increasing demand for luxury goods, with disposable income among residents in Tier 2 and Tier 3 cities growing approximately 9% annually. As retailers like Tiffany & Co. and Cartier expand into these cities, they’re tapping into an emerging market segment that was previously less accessible.

Changing Consumer Preferences in China

Sustainability and Ethical Sourcing: Approximately 67% of Chinese consumers now factor in sustainability when making luxury purchases, a trend that is particularly prominent among younger generations. According to recent surveys, nearly 36% of Chinese women are actively seeking ethically sourced diamonds, and around 51% of Gen Z consumers avoid purchasing diamonds without transparent sourcing credentials​.

Lab-Grown Diamond Popularity: Lab-grown diamonds have gained significant traction among young, price-conscious buyers in China. Sales of lab-grown diamonds in China have increased by around 15% annually in recent years, and analysts expect this trend to accelerate as younger consumers prioritize affordability and eco-friendliness.

Sales Channels and Technology Integration

Rise of “Phygital” Experiences: China's consumers favor a mix of online and offline shopping, with approximately 60% preferring to explore products in-store for assurance while completing purchases online for convenience. High-tech shopping experiences—such as AR virtual try-ons and livestreamed sales on platforms like WeChat—are resonating with digital-savvy Gen Z buyers. In 2023 alone, the Chinese market saw a 20% increase in online luxury sales, with the jewelry segment contributing significantly​Livestream Sales and Social CommerceThe adoption of social commerce has seen rapid growth, with Chinese consumers spending nearly 30% of their online

shopping time on platforms like Weibo and Douyin (TikTok). Livestream sales for diamonds and luxury goods have

created a new avenue for brands to reach younger audiences, with some brands reporting up to 40% of their annual revenue

originating from livestreamed events​.

Impacts on the Global Diamond Market

Global Sales Rebound: If the Chinese market continues on a recovery trajectory, analysts anticipate a 5-7% boost in global diamond sales, with China alone contributing an estimated $10 billion in annual revenue by 2025. This increase could also help stabilize diamond prices worldwide, as increased demand from China helps offset any dips in other regions​Rough Diamond Demand and PricingLeading diamond suppliers, such as De Beers and Alrosa, have already reported a slight uptick in rough diamond sales,

attributed to renewed demand from Asia. A full recovery in China could potentially boost rough diamond prices by 3-5%,

helping to revive an industry that experienced significant declines during the COVID-19 pandemic​.

Forecast and Future Expectations

Long-Term Growth: With the expected growth in China's middle-class population, anticipated to exceed 200 million by 2030, long-term demand for luxury goods, including diamonds, is strong. Analysts project that by 2030, China could account for up to 40% of the global luxury diamond market, making it a crucial player in the industry’s future growth.

Emphasis on Innovation: As consumer preferences evolve, companies are focusing on customization and ethical practices. For example, brands that allow for tailored designs and sustainable sourcing are likely to resonate more with Chinese consumers. By 2026, about 70% of Chinese diamond buyers are expected to prioritize customized and ethically sourced options, reflecting a broader shift towards value-driven purchasing.

The Strategic Importance of China’s Diamond Market

China’s diamond market recovery could indeed provide a much-needed boost to the global industry, as demand stabilizes and prices potentially rise. The Chinese market’s unique trends, from the popularity of lab-grown diamonds to the integration of “phygital” shopping, emphasize the importance of understanding local consumer behavior. For global players in the diamond trade, focusing on customization, ethical sourcing, and digital innovations will be essential to capture the potential of China’s recovering market and support sustainable growth in the years ahead.