Global jewellery sales are increasing, but demand for natural diamonds is weakening due to lab-grown alternatives, rising gold prices, and changing retail strategies.
Jewellery Sales Are Growing Globally
Jewellery sales have shown strong growth across major markets including the US, India, Hong Kong, and Europe. Major luxury brands and retail chains reported steady revenue increases. Examples of Retail Growth
• Richemont jewellery revenue increased 6% year-on-year • Kering jewellery brands grew around 9% • Birks Group reported 12% growth in holiday sales • Titan Company (India) jewellery income rose 24% • Chow Tai Fook and Luk Fook reported 18% and 26% growth These results show that consumer demand for jewellery remains strong worldwide. ________________________________________
Traditional Diamond Demand Model
Historically, jewellery sales created a chain reaction across the diamond industry.
How the System Worked
• Higher jewellery sales increased retailer inventory demand • Retailers ordered more polished diamonds • Manufacturers purchased more rough diamonds • Rough diamond demand increased rapidly This phenomenon is known as the “Bullwhip Effect”, where small retail growth created a larger impact upstream in the diamond supply chain. ________________________________________
Why Natural Diamond Demand Is Slowing
Despite strong jewellery sales, natural diamond demand is declining due to several market changes. ________________________________________
1. Growth of Lab-Grown Diamonds
Lab-grown diamonds are rapidly gaining market share, especially in engagement rings. • 61% of US couples in 2025 chose lab-grown diamonds • Retailers now offer both natural and lab-grown options • Lab diamonds are often promoted due to affordability ________________________________________
2. Price Advantage of Lab Diamonds Lab-grown diamonds are significantly cheaper than natural diamonds. This allows: • Consumers to buy larger stones at similar budgets • Retailers to sell more lab-grown center stones • Natural diamond demand in the 0.50–1.50 carat segment to weaken ________________________________________
3. Rising Gold Prices Gold prices have increased significantly, affecting jewellery manufacturing. Manufacturers are: • Reducing diamond content in jewellery pieces • Using smaller accent stones • Prioritizing gold weight in designs This results in fewer natural diamonds used per jewellery item. ________________________________________
4. Fewer Jewellery Retailers The number of jewellery stores has been decreasing. According to the Jewelers Board of Trade (JBT): • Jewellery businesses in the US decline 2–3% each year Fewer retailers lead to fewer diamond orders across the supply chain. ________________________________________
5. Lean Inventory Strategies Modern jewellers now operate with smaller inventories. Retailers prefer to: • Purchase diamonds based on confirmed demand • Maintain lean inventory levels • Reduce risk from price fluctuations This approach lowers overall diamond purchasing volumes. ________________________________________
Changing Dynamics in the Diamond Industry
The diamond industry is undergoing major structural changes. Key Industry Shifts • Strong jewellery sales but weaker natural diamond demand • Growing popularity of lab-grown diamonds • Rising gold prices influencing design • Leaner inventory management by retailers These factors are reshaping the traditional diamond supply chain. ________________________________________
Conclusion
Although jewellery sales remain strong globally, natural diamond demand is facing structural challenges. Lab-grown diamonds, changing consumer preferences, and evolving retail strategies are transforming the traditional demand cycle. Manufacturers and suppliers must adapt to these industry changes to remain competitive in the evolving jewellery market.