Consumer sentiment for diamonds improving, to reach pre-Covid level by 2022

Forevermark, owned by the De Beers Group, expects global consumer demand for diamonds to come back to pre-Covid-19 levels by 2021-2022.

"The first half of the year was very difficult for all luxury segments due to lockdowns to curb the spread of coronavirus. However, the good news is that we are coming out of that," Stephen Lussier, chairman of Forevermark and executive vice-president (consumer and brands) of De Beers Group, told PTI on Thursday.

He added that there is a good pick-up in demand for Forevermark in key markets, including in India, and it is expect to improve further in third and fourth quarters supported by the weddings and festivals.

If the current economic trends continue at the same pace, the consumer demand is expected to return to the pre-coronavirus times by 2021-22, he added.

"The weddings have been postponed and not cancelled. We see them taking place either in the second half of this year or in 2021. This gives us an opportunity to capture the market and increase our market share," Lussier said.

There has been a complete shutdown of businesses for over two months due to the pandemic, which impacted the luxury segment, including diamonds.

 

This has given rise to a strong digital medium across the globe, especially for luxury goods including diamonds, he said.

"Another positive was that online consumption is at an all-time high, reinforcing the importance of Forevermark's e-tail proposition, another opportunity in these challenging times as people have embraced living in the new normal," he added.

Further, he said that with continued restrictions in manufacturing units, there will be reduced inventory resulting in challenges in the supply side.

"The demand is growing steadily. However, there are restrictions that allow limited artisans or workers in order to curb the further spread of the pandemic. Therefore, we see the inventory getting reduced but slowdown in manufacturing of new jewellery," he added.

Lussier added that this will create challenges in the supply side. "At this stage we look for the return of consumers and the focus is increasingly on the supply chain constraints largely in India."

Besides this, Covid-19 remains the key challenge with renewed local lockdowns and the impact in terms of economic recovery, both fast or slow, he said.