India overtook China to become the second-largest market for diamonds, UK-based diamond firm De Beers Group's chief executive officer Al Cook said in an interview with Bloomberg.
De Beers is a South African-British diamond company that mines, grades, and sells diamonds. It is the world's leading diamond company, producing around one-third of the world's rough diamonds.
The Chinese luxury market is currently facing a slowdown, Cook noted and highlighted that the Indian market is growing at a double-digit rate.
“The good news is that India has taken over where China was, and India is now the second largest market in the world for diamonds, and that's growing at double-digit rates,” said Cook.
According to a recent Reuters report, India's cut and polished diamond exports dropped this year due to the fall in demand in the US and China. This has boosted the nation's domestic market for diamonds.
Cook observed that a slowdown in China's economic growth is taking a toll on Chinese luxury sector demand. "I think across the luxury sector in China, demand has declined as Chinese economic growth has faltered somewhat. Now we see that as a rather longer-term issue,” he said in the interview.
“So the first thing we'll see is stabilisation of Chinese demand, which is coming through at the moment. That's an important platform to build on. But quite honestly, we see the growth, the regrowth of Chinese demand being a rather longer-term story,” he said.
Cook also addressed the fall in demand for natural diamonds in the United States, stating that the inflow of lab-grown ones reduced demand for them.
“Demand in the United States has been reduced by lab-grown diamonds. So we've got to take that on and tell the story of natural diamonds far better than we have,” Cook noted.
According to him, lab-grown diamonds are made in a microwave and buying them is like buying a poster of the Mona Lisa compared to buying an actual one with a history attached to it.
“It's a little bit like taking a poster, buying a poster of the Mona Lisa and putting it up in an art gallery and telling people it's the real thing,” said Cook.
“A natural diamond is created over a billion years under the surface of the Earth, whereas a lab-grown is created in a microwave in China in three weeks,” he added.
(By arrangement with livemint.com)
