INDUSTRY

PROFILE
 THE DIAMOND INDUSTRY
 

How large is the diamond industry?

Diamonds are one of the world’s, and specifically Africa’s, major natural resources. An estimated US$13
billion worth of rough diamonds are produced per year, of which approximately US$8.5 billion are from
Africa (approximately 65%). The diamond industry employs approximately ten million people around the
world, both directly and indirectly, across a wide spectrum of roles from mining to retail. Global diamond
jewelry sales continue to grow, increasing three-fold in the past 25 years, and are currently worth in excess
of US$72 billion every year.

What are diamonds used for?

Diamonds have two main uses: in jewelry (due to their rarity and beautiful appearance) and in industry (due to
their unique molecular properties). In terms of quantity, about 30% of diamonds are of gem quality and are
distributed to experts for cutting, polishing and jewelry manufacture. The remaining 70% of diamonds are
sold for industrial applications including cutting, drilling, grinding and polishing in industrial applications.

 
Why are diamonds unique?
Diamonds have been used throughout history as a symbol to express emotions - love, affection and
commitment - and are often given to celebrate special occasions that are also unique, such as weddings, births
and anniversaries. In many cultures diamonds are considered to be the ultimate jewel. Diamonds are desirable
to consumers because they:

·  Hold deep emotional meaning

·  Are they one of the Earth’s most precious creations?
·  Are they unique, just like the person wearing them?
·  Were born at the beginning of time and will last for eternity
·  Diamonds started to form inside the Earth 3.3 billion years ago due to extreme heat and pressure. In
this environment, the carbon atoms in a diamond uniquely bond in pyramid structures; it is this
composition which makes them so vital for industrial applications.

Diamonds are:

• The hardest natural material known to man

• The most effective heat conducting material, which also expands very little when subjected to
high temperatures, unlike most other conducting materials
• Resistant to most acids and alkalis
 
 INDIAN DIAMOND INDUSTRY
 

Indian Diamond Industry has developed to great extent in recent years and has emerged as the forerunner
in the Gem and Jewellery industry.
The Indian Diamond Industry is mainly involved with cutting, polishing and exporting diamonds.
Diamonds cut and polished in India are universally prized, and India has emerged as the largest diamond-
cutting center in the world. Although India pioneered in the cutting of small diamonds yet today, its
craftsmen are equally skilled at cutting all shapes and sizes of stones, and even at faceting color diamonds.
Mumbai, Surat, Ahmemdabad, Bhavnagar and many small towns in Gujarat are the main polishing centers
of the country. The industry employs one million people, accounting for 95 per cent of the workforce of
the world`s diamond industry.
India is a precursor in the gem industry and a world leader in the manufacturing of cut and refined
diamonds. The Indian diamond industry today is a result of perseverance and hard work. After India
became independent in 1947, for several years, the nation's economy was in the depression. Several views
for business and commerce opened up as new policies came into place, journey towards progress and
development also began for the diamond industry.
The Indian diamond industry was a scattered cottage industry only three decades ago. Now the industry
has gradually evolved into a modern, mechanized, large-scale operation. Today, with state of the art laser
machines, lathes and diamond- impregnated scaives, most of the medium and large sized diamond factories
are well operational. In the world of the jewelry industry, this structured and rapid growth of the Indian
diamond industry  has  a  long-  lasting impact. The Indian exports of diamonds increased and in turn it
reflected greater than before in the export of designed jewellery. There is an evident fact that the Indian
jewellery designs have, for centuries; spellbound everyone, from the Indian Maharajas to the monarchs of
faraway lands.
Indian jewellery was made scrupulously by hand and was traditionally crafted by family jewellers skilled
in a particular style. Large exports were directed to the establishment of factories, which were prepared
with the latest modern machinery and technology. State-of-the-art techniques and recently developed
methods in the manufacturing process were employed. India`s artisans along with their traditional skills
dominated contemporary techniques to provide the world with jewellery that conformed to international
standards. There is a new generation of young designers dominating the world market, apart from a host of
established houses that design the fashion jewellery. Today across India there are several jewellery design
institutes, encouraging fresh ideas and talent.
The Gem and Jewellery Export Promotion Council (GJEPC) is the zenith body of this dazzling and
growing industry. In 1966, the council was set up under the patronage of the Ministry of Commerce and
has helped to form a better understanding between the diamond industry and the Government. The chief
function of the council is to develop and promote the export of gems and jewellery from India and to
contribute towards establishing a code of ethics to ensure that fair trade practices are followed in the
jewellery arena.
The Indian diamond industry is again at the doorstep of expansion. In order to enable diamonds to be
brought into the country to be sold, the Government has legitimated the setting up of bonded warehouses.
The unsold diamonds can then be exported without any duty or tax. The Government is also constantly
slackening its policies. Creating the Export Promotion Zones (EPZ) and Special Economic Zones (SEZ) in
order to help and promote the export of gems and jewellery from the country is undoubtedly a new step for
the betterment of the industry.

ABOUT DIAMOND

Diamonds have been a source of fascination for centuries. They are the hardest, the most imperishable, and the
brilliant of all precious stones. The word "diamond" comes from the Greek word adamas, meaning
"unconquered

A diamond is a transparent gem made of carbon, one of the earth's most common elements. The formation
of diamonds began very early in the earth's history, when the condensation of solid matter into a sphere
caused the centre of the planet to become subjected to incredible extremes of temperatures and pressure.
It was these conditions that caused deposits of carbon to begin to crystallize deep in the earth. As the earth's
surface cooled, volcanic activity forced streams of magna (liquid rock) to the surface, carrying with it the
diamond crystals. Later, the diamond-bearing rock hardened, encasing the diamonds in vertical volcanic
"pipes". But not all diamonds are found where they first came to the surface. Subsequent erosion of the
topsoils over millions of years washed some of the diamonds into streams and rivers, and sometimes as far
away as the sea. It is highly probable that they were first discovered in areas such as these, far away from
their original location.
The atomic structure of a diamond gives it the property of being the hardest substance known to man,
natural or synthetic. The diamond is thousands of times harder than corundum, the next hardest substance
from which rubies and sapphires are formed. Even after many years of constant wear, diamonds will
preserve their sharp edges and corners when most other stones have become worn and chipped.
However, many people expect a diamond to be unbreakable. This is not true. A diamond's crystal structure
has "hard" and "soft" directions. A blow of sufficient force, in a very exact direction, can crack, chip, split or
even shatter a diamond.
 HISTORY OF DIAMOND

The name diamond is derived from the ancient Greek (ADAMAS),which means "proper",
"unalterable", "unbreakable, untamed" which means unconquerable suggesting the eternity of love.
v  Diamond is a crystallized mineral essentially composed of carbon.
v  However, diamonds are thought to have been first recognized and mined in India, where significant
deposits of the stone could then be found many centuries ago along the rivers  Krishna and Godavari.
v  Diamonds have been known in India for at least 3,000 years.
v  Natural diamonds are a rare gift from mother earth to mankind.
v  Diamonds were formed billions of years ago, deep within the earth.
v  Only a small number survive the journey to the earth’s surface.
v  Diamonds are forever! Sparkling diamonds have been the center of attraction since the very beginning.
Diamonds have been associated with romance, legend, strength and power, over the centuries. However
diamond has now acquired its unique status as the ultimate gift of love.
v  The Greek also believed that the fire in the diamond reflected the constant flame of love. Diamond
essence lives longer. 

EARLY HISTORY:
v  The first recorded history of the diamond dates back some 3,000 years to India, where it is likely that
diamonds were first valued for their ability to reflect light.
\

v  In those days, the diamond was used in two ways-for decorative purposes, and as a talisman to ward off
evil or provide protection in battle.
THE DARK AGES:
v  The diamond was also used for some time as medical aid. One anecdote, written during the dark ages
by St Hildegard, relates how a diamond held in the hand while making a sign of the cross would heal
wounds and cure illnesses.
v  Diamonds were also ingested in the hope of curing sickness. During the early middle ages, pope
clement used this treatment in a bid to aid his recovery.
THE MIDDLE AGES:
v  During the middle ages more attention was paid to the worth of diamonds, rather than the mystical
powers surrounding them.
v  Due to the heightened public awareness of the value of diamonds, mine owners perpetuated myths that
diamonds were poisonous.
v  This was to prevent the mineworkers swallowing the diamonds in an attempt to smuggle them out of
the mines.
v  . The popularity of diamonds increased during the middle ages, with discovery of many large and
famous stones in India, such as the Kohinoor and the blue hope.

LATE 20th CENTURY:

v  During the mid-nineteenth century, diamonds were also being discovered in eastern Australia.
However, it was not until late 1970s, after seven years of earnest searching, that Australia’s alleged
potential as a diamond producer was validated.
v  On October 2 1979, geologists found the argyle pipe near Lake Argyle: the richest diamond deposit in
nd

the world.
v  Since then, argyle has become the world’s volume producer, and alone is responsible for producing
over a third of the world’s diamonds every year.
 

RECENT TIMES: 
v  Diamonds are mined on every continent except Europe and Antarctica in approximately 25 countries.
v  However, only a few diamond deposits were known until the 20 century, when scientific understanding
th

and technology extended diamond exploration and mining around the globe.
v  For 1,000 years, starting in roughly the 4 century, India was the only source of diamonds. In 1725,
th

important sources were discovered in Brazil, and in the 1870s major finds in South Africa marked a
dramatic increase in the diamond supply.
v  Additional major producers now include several African countries, Siberian Russia, and Australia.
v  Today, Australia, Botswana, Canada, Namibia, South Africa and Russia account for some 80% of the
world's diamonds.
THE AURA OF DIAMOND: 
v  The cultural alignment with diamonds has been there throughout the centuries. 
v  The ancient Greeks and Romans believed that diamonds were tears of the gods and splinters from falling
stars.
v  Then, the Hindus attributed so much power to these precious stones they went so far as to place diamonds
in the eyes of the idols.
v  Diamond rings have been witnesses to the talismanic power of diamonds in the middle and dark ages,
wearing diamonds as symbols of power.
v  Diamond today is cherished for their astonishing natural beauty and their aura of being such a special and
magical gift.
v  As of today a diamond is more than just a jewel it is the ultimate symbol of love. Nowadays diamonds are
a luxury and an irresistible temptation.
v  It has a huge market worldwide. This has created a big diamond and jewelry industry, giving employment
to millions of people globally.

 
MAJOR PLAYERS
The main players of rough diamonds today follow:- 

ALROSA: The predecessor of Russia’s largest diamond company was founded in 1957 in the Union of
Soviet Socialist Republics (USSR). In 1992 it was transformed into the joint stock company ALROSA.
Key shareholders are the Russian Federation government with 51 percent, the state government of the
Yakutia Republic (32 percent) and local municipalities (8 percent). The core business is the production of
rough diamonds in Russia and Angola. ALROSA production in 2010 exceeded 34 million carats. Billiton.
A global diversified natural resources company

BHP Billiton was founded in 1885. The company owns 80 percent of the Ekati mine in Canada; in 2010,
its share of diamond production from that mine totaled three million carats. Diamond sales constituted 2.4
percent of total company revenues in 2010.
 

De Beers: Founded in 1888, De Beers grew into a family of interrelated companies in diamond mining,
trading and industrial diamond manufacturing. Key shareholders are Anglo American,  the  Oppenheimer 
family,  and  the   government   of   Botswana. Rough- diamond production in South Africa, Namibia,
Botswana and Canada makes up the core business. De Beers’ production in 2010 was 33 million carats.

Harry Winston Diamond Corporation: Founded in 1994 with the discovery of its first and only asset in
the mining segment, the Diavik diamond mine in Canada (Harry Winston owns a 40 percent share; 60
percent is owned by Rio Tinto). Harry Winston is also integrated into the premium retailing segment of the
diamond industry via its subsidiary, Harry Winston Inc. In 2010 Harry Winston’s share of production from
the Diavik mine was 2.2 million carats.

Petra Diamonds: An AIM exchange-quoted independent diamond company, Petra Diamonds entered an
accelerated growth stage when it merged with Crown Diamonds in 2005, introducing production to the
group. Involved in both production and exploration, Petra Diamonds aims to optimize operations at assets
acquired from the largest players, especially across Africa. Petra Diamonds’ production in 2010 was 1.2
million carats.

Rio Tinto: Founded in 1873, Rio Tinto is a diversified UK–Australian mining and resources group with
headquarters in London and Melbourne. The company produces diamonds in Australia, Canada and
Zimbabwe. In 2010 Rio Tinto’s share of diamond production was 13.8 million carats. Diamond sales
constituted 1.2 percent of total revenues for the company in 2010.
GLOBAL IMPACT OF COVID 19 IN DIAMOND INDUSTRY

The diamond industry suffered during the Covid-19 crisis but fared better than the personal luxury
market overall. Across the value chain, revenues decreased by 15% to 33%. Operating margins
followed, with a decline of 1 percentage point to 22 percentage points. Despite the significant drops,
the $64 billion diamond jewelry retail market performed better than the personal luxury market,
which contracted by 22% at current exchange rates in US dollars.
Rough diamond production continued its downward trend, falling to 111 million carats. After
peaking at 152 million carats in 2017, rough diamond production has declined by about 5% per year.
In 2020, production decreased by 20% compared with 2019 levels. Notwithstanding changes, the mix
of diamonds remained largely constant, with medium and large diamonds accounting for 25% of
production volume in carats but around 70% to 80% in value in US dollars.
The mining response at the start of the Covid-19 crisis helped midstream players weather the worst of
the storm. Major miners canceled sales in the first half of 2020 and allowed clients to postpone
purchases. Upstream inventories of rough diamonds grew to 65 million carats by the end of the third
quarter, before decreasing on the strength of fourth-quarter sales to 52 million carats (+17% than the
inventory level at the end of 2019).
Despite challenges in 2019, midstream players finished the year on a strong note. The midstream
started 2020 with 9% less inventory, healthier financial balance sheets, and a more consolidated
market structure. In 2020, midstream players cleared existing stockpiles even further and reduced
inventories by 22%.

The midstream segment lowered its debt by half compared with its peak level in 2013; debt levels
decreased to $8 billion in 2020. Financing decreased because of lower trading levels and a higher
reliance on self-financing. Larger midstream companies with transparent operations continued to
access financing from big banks, while alternative financing options (peer-to-peer financing)
emerged for smaller players. Large midstream companies, banks in the Middle East, and specialized
funds were made available to provide additional financing in the sector. Deleveraging is expected to
speed up restructuring and consolidation of the midstream and to create long-term benefits across the
pipeline.
 
Prices for rough and polished diamonds continued to feel pressure. Rough and polished diamond
prices began trending downward in 2018, then decreased in 2019 by 7% and 4%, respectively, as a
result of over-stocking in the midstream. In 2020, rough and polished prices fell by 11% and 3%,
respectively. Divergence between rough and polished price dynamics helped midstream players post
record-high operating margins in 2020. Higher-quality diamonds recovered faster, ending in positive
territory compared with the start of 2020 and recovering most of their price drop from the past two
years.
Lockdowns, travel restrictions and economic uncertainty contributed to lower diamond jewelry sales.
Sales were down 15% in 2020, with most of the decline happening in the first and second quarters. In
addition, demand for diamond jewelry became more localized due to travel restrictions. Demand
returned during the fourth quarter, culminating in a strong holiday season across the globe. Once
fully tallied, we expect 2020 sales to be better than analysts predicted based on the first three
quarters. Preliminary estimates show growing consumer confidence and an increase in pre-holiday
retail activities.
 
Consumers continue to value diamond jewelry as a desirable gift and a key element of marriage. In a
customer sentiment survey issued by Bain in 2020, US consumers said jewelry and watches are
among the top four gifts they would like to receive; consumers in China and India ranked them in the
top two. In the US, China, and India, 60% to 70% of respondents believe diamonds are an essential
part of a marriage engagement. After the pandemic, 75% to 80% of consumers said they intend to
spend the same amount or more on diamond jewelry than they would have before the crisis. This
indicates a strong, ongoing emotional connection with the diamond story.
 
Covid-19-related travel restrictions localized jewelry consumption in 2020. The biggest winner was
China. Because Chinese consumers had limited opportunities to travel, they turned to local retailers
and Hainan duty-free stores for luxury and premium purchases. Major local chains reported double-
digit growth in sales in the second half of the year. In addition, major retailers are expanding their
retail footprints, particularly into lower-tier cities where the middle class and wealth are growing.
The repatriation trend is expected to subside in the long term, once global travel resumes, but new
consumers in lower-tier cities will provide continued demand for jewelry and drive further growth in
China.
 
Covid-19 accelerated pre existing trends that have been shaping the diamond industry:

The diamond value chain is becoming more digital, although brick-and-mortar stores still have value.
A digital pipeline for business-to-business (B2B) commerce emerged during the pandemic as several
platforms (UNI diamonds, Get-Diamonds, Clara Diamond Solutions) started or expanded trading of
rough and polished diamonds. Business-to-consumer e-commerce also grew in 2020, with about 20%
of retail sales occurring online. Major diamond jewelry retailers posted up to 60% to 70% year-over-
year sales growth in their online channels. Despite the increase in online sales and a strong preference
for online research before making purchases, nearly all consumers (90%−95%) still prefer to buy
diamonds in brick- and-mortar stores. Consumers value the opportunity to see and touch jewelry, and
they benefit from in-person advice and other personal services. The online share of diamond jewelry
sales is still low compared with other luxury and consumer products. To create a meaningful shift
toward digital channels, the industry needs to address several consumer concerns. It needs to improve
trust (by providing diamond certificates, warranties, and reviews), enhance convenience (e.g.,
implementing free delivery and returns or “try before paying” programs), and provide additional
discounts and promotions for online purchases.

Diamond jewelry marketing needs to evolve to meet new challenges, like generational shifts and
increased competition for consumers’ share of wallet. Future marketing campaigns should connect
diamonds to additional life moments, expanding the market (and consumers’ emotional connection to
diamonds) beyond marriage. The diamond story needs to become more personal and engaging, which
marketers can accomplish through storytelling, social media, and customization (e.g., products,
offers, and pricing). Retailers need to invest in omnichannel and phygital capabilities to match new
purchasing preferences, and manufacturers should promote sustainability practices that consumers
care about. Industrywide, marketing efforts need to be reinvented and increased. Despite current
efforts, diamond marketing spend is roughly 1% to 2% of industry revenue, which lags the average
luxury goods marketing spend of 6% to 8%.
Continued advances in technology contributed to double-digit growth in production and lower retail
prices for lab-grown diamonds in 2019 and 2020. The price differential between natural and lab-
grown fancy color diamonds is particularly striking—up to 10 times. In addition to independent lab-
grown manufacturers, major fashion jewelry retailers are adding lab-grown diamonds to their product
offerings, further positioning the category into the fashion jewelry segment and making it accessible
to a wider range of price-sensitive consumers.

Sustainability, transparency, and social welfare are priority issues for consumers, investors, and the
value chain. Social welfare and sustainability were growing issues in previous years. Now they are
firmly top-of-mind for mining, trading, and retail companies. In the US, and especially in China and
India, younger consumers say sustainability is part of their decision-making process and could
influence whether they buy diamond jewelry. Companies across the value chain are responding with
a range of initiatives to tackle emissions and water consumption, increase diversity and support for
local communities, and improve diamond traceability.
 
Covid-19 prompted structural changes in the diamond industry that will help it recover from the
recession. Because of the crisis, midstream inventories are at healthy levels and better aligned with
consumer demand. There are more partnerships between upstream and midstream players in regard to
technology, go-to-market strategies, and marketing. A more transparent and digitally enabled supply
chain was created in the rough and polished diamond segments, and we see innovative new
approaches to customer engagement. We are optimistic these changes will help the industry exit the
crisis in a stronger position.
 
2020 ended with strong sales across the whole value chain. The boost was driven by successful
holiday jewelry sales, particularly in the US and Chinese markets, where players reported a 5%–10%
and 15%–20% rise in the fourth quarter, respectively, compared with the same period of 2019. The
retail sales growth was feeding through to rising demand for polished diamonds. In the fourth quarter
of 2020, the cutting and polishing segment accounted for about 20% of the growth of net export of
polished diamonds and net import of rough diamonds compared with the same period in 2019. In the
last three months of the year, miners managed to release approximately 13 million carats of rough
diamond inventories, increase rough prices by 2%–3%, and show 10% sales growth compared with
the fourth quarter of 2019.

2021 started on a strong trajectory and growing market confidence. Most miners reported 5%–8%
rough diamond price and sales improvement in January, while, in addition, major miners kept a
flexible sales policy, which all combined set up a good start to the year. If that trajectory continues,
we could see faster recovery to a historic growth trajectory than anticipated in our optimistic
scenario. 
There is still a lot of economic uncertainty ahead. The current crisis could be more severe than 2009,
and a double-dip recession is possible. Full recovery and a return to a historic growth trajectory isn’t
expected until 2022 to 2024. Three factors will impact the pace and shape of the recovery:
epidemiology, government policy response, and consumer response.

Encouraged by the year-end performance, the long-term outlook for the diamond market remains
positive. In volume terms, rough diamond supply growth is projected to be −2% or 2% annually at
best. Following accelerated short-term recovery growth, demand for rough diamonds is expected to
fall back into its historic trajectory, growing at 1% to 3% annually. Demand dynamics will match the
trends in GDP and disposable income growth for affluent and high-net-worth individuals globally.
Expanded retail jewelry footprints into lower-tier cities across key emerging economies will also
support demand growth. Generation Z will be both a growth engine and a change agent for the
industry, with its evolving preferences, purchasing behaviors, and sustainability agenda.
 
1. Recent developments in the diamond industry
After a robust performance in 2018, 2019 was a challenging year for the diamond industry. Rough
diamond production was about 20% higher in 2017 to 2019 compared with 2016. However, increased
production did not translate into demand growth for diamond jewelry. Performance was tempered by
rising trade barriers, mainly between the US and China; political instability in key trading locations
like Hong Kong; and deteriorating customer sentiment across key regions. Toward the end of 2019,
performance improved, and the market expected a recovery in 2020.

Then the Covid-19 pandemic hit the entire value chain. In the first half of 2020, lockdowns in major
world cities and an economic downturn caused a 15% reduction in diamond retail. Upstream and
midstream players also suffered from operational disruptions, including mine closures, restrictions on
cross-border goods movements, and canceled sale events.

Because of the crisis, major mining companies adopted a price-over-volume strategy and took steps
to support the midstream segment. They reduced production by 20% and allowed customers to
postpone purchases. In the third quarter, when the demand was back, major miners lowered rough
diamond prices by 10%. As a result, mining revenues decreased by 33% and inventory increased by
17%. Cutting and polishing companies saw revenues drop by 25%. Polished prices decreased by only
3%. Midstream inventory decreased to prerecession levels, which are better aligned with production
profiles and which curtailed the need for financing. These changes redistributed the profit pool along
the diamond value chain. Mining profit margins decreased about 22 percentage points, retail margins
declined 1–3 percentage points, and midstream margins increased 5 percentage points.

The pandemic accelerated structural changes in the diamond industry. E-commerce adoption
increased in the retail sector and expanded into B2B trading for rough and polished diamonds. The
divergence between lower- and higher-quality diamonds deepened, with prices and volumes for high-
quality diamonds recovering faster and stronger.

There is strong evidence of a revival in the last quarter of 2020, but full recovery is not expected until
2022 to 2024. Even after the consequences of the pandemic are fully mitigated, industry players must
continue to restructure their business models to align with long-term trends and operational realities.
The industry needs to embrace digital technologies, explore new marketing concepts, and engage
consumers differently to capitalize on long-term growth prospects.
 
2. Rough diamond production
Following peak levels in 2017 and 2018, rough diamond production declined by 5% in 2019, hitting
139 million carats (+10% over 2016). Rough diamond sales decreased 18%, reflecting both volume
and price changes, and leading to a 10% increase in mining company inventories. Toward the end of
2019, the market was improving significantly. Strong holiday demand positioned the industry for a
better 2020.

Then the Covid-19 pandemic severely disrupted mining operations and logistics, causing mine
closures and restricting cross-border movements. Major mining companies adopted a price-over-
volume strategy and took actions to keep the value chain in balance. They canceled major sales
events between March and July, allowed customers to defer purchases, introduced a zero buyout
obligation on goods allocation, and discounted rough diamond prices by 10% in the third quarter.
Smaller players continued selling their diamonds from March through May to generate cash flow,
even though prices were 25% to 30% lower than pre-pandemic levels. Several mining companies
suspended operations for more than six months. Overall, rough diamond sales decreased by
approximately 30 million carats ($4.1 billion) and rough inventory increased by 7 million carats.

Production dropped by 28 million carats (20%) in 2020. The biggest decreases came from Russia,
Canada, Botswana, and Australia. In Russia, production levels were lowered at Botuobinskaya,
Almazy Anabara, Jubilee, and other smaller mines. Production in Canada declined due to suspended
mining operations at Ekati and Renard in March. In Botswana, Jwaneng and Orapa decreased
production by 26%. As planned, Rio Tinto shut the Argyle mine in Australia in November 2020. The
only mines to increase production were Venetia in South Africa and the Udachny underground mine
and Nyurba alluvial deposits in Russia. The distribution of diamond assortment by size remained
relatively constant, with medium and large diamonds accounting for 70% to 80% or more of
production values.

Except for ALROSA, all mining companies reported negative earnings before interest and taxes
(EBIT) margins during the first half of 2020. Mining activities and sales started to normalize over the
summer, so we expect better profitability in the second half of the year once the results are reported.

In the rough diamond market, new sales platforms were deployed to overcome travel constraints and
streamline the journey from miner to jeweler. Online auctions gained a higher share of rough
diamond sales and offset deficits in traditional sales channels. Miners also created profit-sharing
partnerships with midstream players to diversify rough-to-polished outcome risk and polished price
volatility for midstream players and to gain additional margins on polished diamond sales. Such
partnerships were formed between miner Lucapa Diamond Company and manufacturer Safdico
International, and between miner Lucara Diamond Corp. and manufacturer HB Antwerp.

Production is expected to remain stable in 2021, driven by the reopening of profitable mines that
were suspended in 2020. However, the increase will be offset by the closure of Argyle. During the
next three to five years, production will likely grow by 0% to 2% per year to allow the value chain to
fully rebalance.
 
3. Cutting and polishing
In 2019, cutting and polishing revenue fell by 11% for three reasons: demand for polished diamonds
declined, financing shrank, and polished prices fell by 4%. Nonetheless, midstream players
deleveraged 10% of excess inventory, lowered rough purchases by 18%, and finished 2019 on a
positive trajectory. Manufacturing sales were robust in November and December, driven by stronger-
than-expected holiday retail sales. Holiday demand caused downstream inventory replenishment and
improved polished diamond pricing. Lower rough diamond prices enabled additional margins in
trading and manufacturing.

The pandemic disrupted operations and logistics along the segment. Sales of polished diamonds fell
by 25%, and net imports of rough diamonds to key cutting and polishing countries dropped by 26%
year over year in 2020.

In India, net rough diamond imports decreased by 23%, yet the country retained about 95% market
share of global polished diamond manufacturing. India’s decrease in trading and manufacturing was
a consequence of strict lockdowns, import moratoriums, restrictions at production sites, and customs
processing delays. Smaller factories suffered the most, with limited access to trading centers and
higher costs to implement pandemic-related health requirements.

Chinese manufacturers were among the first to restart operations; they resumed production in March
and April and managed to keep 3% market share in global polished diamond manufacturing.
Guangzhou Diamond Exchange and customs officials enabled fast import clearance to support an
early recovery.

Antwerp demonstrated resilience throughout 2020 since it had stable access to rough diamond supply
and solid demand for high-end goods, which are the focus of Belgian manufacturers.

Despite disruptions, the midstream finished the year in good shape. Demand for polished diamonds
increased in the second half of 2020, leading to a polished price recovery and only a 3% decrease
year over year. Inventory levels decreased by 22%, which is healthy for the segment. Profitability
moved from near breakeven in prior years to 3% to 5% margins. Cutters and polishers of high-quality
diamonds benefited the most; demand for such diamonds was strong in the second half of 2020.

Outstanding debt in the midstream decreased by 23% year over year, which aligned with reduced
activity levels in 2020. Financing institutions extended due dates and canceled credit facility fees
during the pandemic. New sources of financing also became available from specialized funds and
peer-to-peer lenders.

Short-term pressures sped up restructuring and consolidation trends, which will continue. Progressive
players adjusted their business models in several ways: They started making purchasing decisions
based on retail demand versus manufacturing capacity, and they entered partnerships with mining
companies to share risk on polished price volatility. In addition, they used analytics to predict
polished output and prices based on rough diamond parameters, started testing automatic cutting and
polishing machines (Synova DaVinci Diamond Factory or Fenix machine), and shifted more
purchasing and sales activities to digital channels.
In 2021, performance will depend on how the midstream collectively responds to two factors:
downstream demand for polished diamonds after the holiday season, and new sales agreements and
rough price policies developed by major miners.
4. Diamond jewelry retail
Diamond jewelry retail was flat in 2019, with corrections to exchange rate movements. The US retail
market rose 1% after a strong holiday season. It declined 5% in China, where accelerated local
spending was depreciated by a weaker yuan. Trade wars between the US and China dragged down
consumer sentiment and negatively influenced both markets in 2019.

Store closures, wedding cancellations, and travel restrictions to traditional shopping destinations all
hurt the market in the short term and undermined consumer financials and confidence in the medium
term. These negative effects were offset by “emotional hunger” during lockdowns, decreased
competition from typical luxury rivals (travel, experiences, and apparel), and the quick expansion of
online channels. Local consumption grew due to global travel restrictions. Diamond jewelry is
expected to perform better than the global personal luxury market in 2020, with only a 15% drop
compared with a 22% decline in luxury.

China’s diamond jewelry market suffered during the pandemic but recovered quickly once
lockdowns were released. The bridal segment suffered the most due to wedding delays in February
and May (two of the three main wedding seasons in China). Local purchasing rose significantly
thanks to government repatriation policies (e.g., reduced import duties), price harmonization among
brands, and international travel bans. New sales channels like podcasting and other social media (e.g.,
Weibo, TikTok, Red, Bilibili, WeChat), online store sales (e.g., Taobao), and VIP membership sales
allowed retailers to reach customers in a more interactive manner and also contributed to double-digit
growth in China. Retailers engaged with new brand ambassadors, key opinion leaders (KOLs), and
key opinion consumers (KOCs) that are popular among Generation Z to promote products and
influence sales. Hainan, China’s holiday island, became a substitute destination for international
travel and saw duty-free diamond jewelry sales surge. Key jewelers expanded their retail footprints
into lower-tier cities, which also supported sales growth. One notable exception: Hong Kong. The
pandemic slammed the brakes on tourism, spending, and diamond jewelry retail in the city. In total,
retail in Greater China is expected to decrease by 6% year over year.

The US postponed and limited lockdowns and has not yet experienced a full or definitive recovery
from the pandemic. In the second quarter, jewelry sales dropped more than 40% after the stock
market crashed and unemployment rose to 15%. The US jewelry market felt the decline in
international tourism and related spending on luxury and premium products. However, significant
government support, employment rate improvement, positive vaccine news, and a pre-holiday
marketing push helped turn things around. A resurgence in diamond jewelry demand began with
Black Friday and held through the holiday season. We expect a 15% decrease in year-over-year retail
results in the US.

European markets, which rely heavily on brick-and-mortar diamond sales, were less resilient. Key
markets across Europe experienced a second wave of strict lockdowns, which hurt Christmas sales.
Once sales are fully tallied, we expect a 20% decline in retail in Europe in 2020.
In India, we expect total lockdowns, economic fallout, and deferred weddings to have caused a 26%
decrease in retail sales in 2020.

Demand recovery is unlikely to be linear or equally distributed due to differences in lockdown

policies and lengths, government support mechanisms, and online sales adoption. We believe the
Chinese diamond jewelry retail market will recover in early 2021, while other developed countries
will reach pre-pandemic levels in 2022 to 2023. Retail recovery in emerging countries will follow a
year later.
 
5. Key industry trends and effects of Covid-19
The pandemic simultaneously disrupted the supply and demand sides of the diamond market.
Logistical collapses, lockdowns, and business closures rocked supply chains. On the demand side,
loss of income from morbidity, quarantine, and unemployment weakened economic prospects and
lowered household consumption. Consumer interest in the diamond category remained strong, but
consumer behavior and preferences changed. Diamond industry players and marketers need to
respond to four important shifts.

Online shopping increased. In 2020, up to about 20% of diamond retail sales occurred online (up
from approximately 13% in 2019). Most consumers use digital tools to research and choose jewelry
before they make in-store purchases. Since this trend is unlikely to fully reverse after the pandemic,
retailers must invest in digital capabilities, delightful online shopping experiences, and seamless
omnichannel or phygital interactions. Marketers can also apply data analytics to develop more
personalized campaigns, products, and services for online shoppers. To encourage online demand,
the industry can support diamond certificate initiatives, warranty programs, and customer reviews.
Generous delivery and return policies will also increase the convenience of online shopping.

Sustainability and social consumerism became more influential to purchase decisions, and the
pandemic heightened attention to global health and safety concerns. Regarding diamond jewelry,
social impact is the top sustainability concern for US consumers; in China and India, consumers care
most about environmental preservation, conflict-free supply chains, and carbon footprint.
Governments, professional groups, and local communities are pressuring the industry, too.
Companies along the value chain are responding with a wide range of initiatives, including capital
projects to reduce emissions and diversity and traceability programs. Going forward, industry players
should integrate ambitious environmental, social, and governance (ESG) targets in their asset plans
and internal incentive schemes to demonstrate their commitment. They should also communicate
their progress to society.

In 2020, lab-grown diamond production reached 6 to 7 million carats, with up to 60% of it

manufactured in China using high-pressure, high-temperature technology. Chemical vapor deposition
technology is gaining share, with India and the US emerging as major production centers. As
expected, retail prices for lab-grown diamonds fell in 2020 while wholesale prices remained stable.
That led to a margin contraction for traders and jewelry manufacturers. We believe additional price
drops will make lab-grown diamonds accessible to broader groups of price-sensitive consumers and
push them further into the fashion category, where they have growth potential. Most of the retail lab-
grown market is currently concentrated in the US; China is a distant second.
Although most consumers say the pandemic will not affect their long-term interest in diamond
jewelry, Covid-19 accelerated emerging trends in marketing. Diamond marketing is becoming more
complex, accentuated by fierce competition for share of wallet, diamonds’ low purchase frequency
per consumer, and changing product requirements for new generations. And the diamond industry is
not investing enough in marketing compared with other premium and luxury segments. The era of
one-size-fits-all marketing is over. Developing customized, analytics-based strategies will become a
key competitive advantage going forward. To succeed in a post-crisis world, marketers need tools to
closely monitor shifting customer sentiments and priorities, leverage data analytics, and ramp up
personalization.
 
6. Updated supply and demand model
The Covid-19 recession is likely to be more severe than the 2009 recession. In developed countries,
economic recovery to pre-pandemic levels is expected in 2021–23, if Covid-19 vaccines are deployed
in 2021 as anticipated. Rough diamond production is projected to recover to the “new normal” in the
next two to three years and remain stable from 2023–30. Excess rough diamond stock will gradually
enter the pipeline within the next one to two years to ensure smooth supply. Demand for diamond
jewelry is expected to recover to pre-pandemic levels in 2022–24. If fundamental factors such as
GDP and middle- and high-net-worth class growth are as strong as projected, and there’s sufficient
marketing support, then long-term demand is expected to grow at an average annual rate up to 2% to
3% from 2023–30.

The US is expected to reach pre-pandemic economic levels by 2021 to 2022, ahead of most of other
countries, because of increased government spending. GDP growth was positive in China in 2020;
economic recovery across all Chinese industries is expected in 2021. India’s recovery will come
later, in 2023 to 2024. Recoveries could be affected by new strains of the virus or government
policies to stop its spread. Such circumstances could lead to a double-dip recession and another
downturn before the economy is revitalized.

In the long term, the global economy is projected to grow at an annual rate of 3%. The US, China,
and India will continue to lead the growth in diamond jewelry purchasing. We expect the US
economy and US personal disposable income to grow around 2% annually. In China, diamond
jewelry demand will be driven by 4% growth in affluent and high-net-worth individuals and from
expanded retail footprints in lower-tier cities. In India, diamond jewelry demand will follow middle-
class growth (10% annually) and be reinforced by the country’s affinity for jewelry and the
expansion of internationally branded retailers. These factors provide a strong foundation for growth
beyond 2023.

In the lab-grown market, consolidation, production capacity growth in China, and technological
advancements are causing unit costs and prices to drop. If that continues, lab-grown diamonds could
expand into the wider mass jewelry segment, targeting a different audience than natural diamonds.
Alternatively, if the trend of product differentiation reverses, we could see more lab-grown diamonds
in the premium jewelry segment, compensating for the decreased supply of natural diamonds.
This forecast does not consider several factors that could disrupt the supply–demand balance in the
short term or slow down the longer-term global trajectory. A number of risks may cause a double-dip
recession: the US failing to agree on new stimulus programs; escalating trade wars between the US
and China; European debt or currency crises; India’s increased vulnerability to oil prices; or
increased taxation to cope with budget deficits. Sustained consumer fears about Covid-19 and new
restrictions to stop its spread are additional risks that could impede recovery. Elevated competition
from alternative luxury goods is another potential risk. If materialized, these risks could decrease
consumer spending on diamond jewelry considerably and lead to longer recovery periods in key
markets.
 
 
 
 
 
 
 
 
 
 
 
 
 

WHEN WILL THE DIAMOND INDUSTRY RECOVER FROM THE IMPACT OF COVID
19?

Due to the COVID-19 Pandemic and lockdown of several countries all over the world, the diamond
industry has taken a hard hit. The global diamond industry has experienced shuttering mines,
disrupted supply chains and the fight for survival is rapidly rising. 
As the Coronavirus crisis persisted and the restrictions heightened, most diamond markets took a
complete downturn. Borders were closed for travel and lockdown measures were imposed to curb the
spread of Covid-19. Hence, diamond imports and exports halted almost completely. With the cutting
and polishing artisans confined to their homes, jewelry stores closed, the diamond trading world was
left with devastating effects. However, as the mining industry is a highly essential sector, they were
mostly exempted from lockdown regulations but were subject to specific social distancing and
sanitary measures.
The Covid-19 measures put in place by the government to manage and contain the spread of the virus
drastically reduced the productivity in the mining industry. Both small-scale and large-scale miners,
including artisans experienced the worst slowdown. In Guinea, for instance, their diamond exports
plunged from 270,157 carats in the 1st quarter of 2019 to 39,494 carats in the 1st quarter of 2020.
Several diamond sales events were canceled, and diamond producers were forced to reduce their
prices by as much as 25 percent.
The social distancing measures and the reduction of working hours also resulted in the subsequent
downsizing of active workers. Many mining company employees, artisanal miners, traders, even
mining company officials were out of work. Some also lost their jobs during restriction of
movements and total shutdown of business operations. The officials of the National Bureau of
Expertise (BNE) in Guinea that had to approve all diamond exports, confirmed that they had been out
of work since the beginning of April due to the closure of air and land borders.
The Covid-19 lockdown measures in the first quarter of the year resulted in the fall in diamond prices
including huge disruptions of trading routes and operations. India, with the largest concentration of
polished diamonds, took a hit in the diamond market trade. Data from the Gem and Jewelry Export
Promotion Council showed that India’s imports of rough diamonds plunged from $1.5 billion in
February to $1 million in April. The Gem and Jewelry Export Promotion Council also reported that
India’s polished-diamond exports were down by 26% year-on-year to $1.64 billion in August. (It was
$2.18bn in August 2018). The Covid-19 evidently did not spare Diamond hubs as they also suffered
the plunge. The RapNet Diamond Index (RAPI) popularly known as the industry benchmark for price
trends showed in the first quarter of 2020, the price of 1-carat diamond fell by 8.7% (and down
13.1% year-on-year) while the price of 0.5-carat diamonds went 4.9% lower (and down 9.5% year-
on-year).
Several diamond mining countries such as Russia, Botswana, the Democratic Republic of Congo,
Australia, and Canada were largely affected. The high impact of the coronavirus crisis directly
affected production and demand, creating supply chain and market disruptions which also adversely
affected the global financial markets. Belgium’s polished imports slumped 71% and exports dropped
51% in March, giving the first glimpse at a decline in trading levels as coronavirus spread globally.
Hong Kong government says the retail environment has turned more austere again amid a resurgence
of Covid-9 cases as their June sales of jewelry, watches, clocks, and valuable gifts down 57% to
HDK 2.5 billion.
With the risk of the permanent closure of mines, diamond miners seek ways to extract more value
from their mines regardless of the hit from canceled or delayed sales including the pressure of the
market downturn. Meanwhile, some gem workers leave the city and abandon mine sites to explore
other means of livelihood such as agriculture.
Some diamond trader networks with the necessary cash flow abstained from pre-financing
arrangements. While several diamond mines were closed to preserve cash flow. The pandemic caused
a rapid decline in cash flow and some companies were forced to lower the cost of diamonds, squeeze
prices, and even freeze sales.
While the fall in prices is a great concern for the diamond miners and traders, it seems like the best
time for diamond consumers. The price of diamonds has become more appealing and there really has
never been a better time to buy diamonds while the prices are as favorable as they are now. With the
gradual ease of the lockdown in some countries, some affluent investors have taken advantage of this
opportunity to purchase large, high-quality diamonds. Meanwhile, the ill-intentioned companies
demand and stock up on cheap artisanal diamonds which they plan to sell with huge profits when the
disruptions of international supply are relaxed.
Despite the Covid-19 crisis, diamond mining companies such as De Beers and Alrosa moved to
defend their diamond market. They refused to cut prices in an effort to control their stock levels and
they also reduced production hence, the diamonds kept piling up. “They’ve tried to restrict rough-
diamond supply to protect the market and protect value,” said Gemdax partner, Anish Aggarwal.
After the pandemic paralyzed the diamond industry, De Beer decided to cut the price of its diamonds.
They lowered the prices of their rough diamonds above 1 carat. De Beers says sales rose 11% year on
year to $320 million during the August cycle amid improvement in the diamond market. They still
recorded the highest sight sales since January as rough demands improve ahead of the holidays.
Producers over manufacturers to retailers along the supply chain are now focused on their recovery
from the Covid-19 pandemic. They also intend to scale up, promote the artisanal diamond sector, and
eliminate avenues for illicit trade. 
As the pandemic eases, several countries are gradually lifting Covid-19 restrictions. Chinese retailers
have resumed trade operations while manufacturing in India has resumed at 50% capacity. Belgium
polished exports rise 6% year-on-year in August as demands returned. Retailers who are able to adapt
their businesses to online trading and commerce have gotten better sales.
Diamond miners across different countries have begun seeking innovative ways and new work
methods to protect the diamond industry. Now, there seem to be signs of recovery in trading and a
reduction in the decline of diamond prices compared with earlier months. Although, the ultimate
recovery of the diamond industry will largely depend on higher demand for diamonds and the
returning of customers to jewelry stores. 

DIAMOND INDUSTRY IN INDIA

Overall exports from the diamond sector in 2004-05 at US$13.7 billion were up by an impressive 29.6 percent
from US$10.57 billion in 2003-04. Up to August, 2005,exports were up 23.9 per cent from US$ 5.08 billion in
the corresponding period of the previous year to US$ 6.29 billion, indicating a continuation of robust growth.
The Indian cut and polished diamond manufacturing industry is expecting a growth of 15 to 20 per cent in
2005. The US$ 11 billion diamond industry has accounted for 85 per cent of the total global business last year.
The global business is worth almost US$ 12.5 billion

NUMBER OF PEOPLE INVOLVED IN DIAMOND INDUSTRY

 

The total numbers of people involved in diamond industry are around 1.2 million in 2005 which will reach
to 1.7 million by 2007 with an increase in 42 %.Thus we can define that Diamond is a precious gemstone
formed of carbon (C-99.95%) crystallized in the cubic or isometric, crystal system. The word "Diamond"
originally comes from Greek word "Adamas", a term used to describe any hard material
 

BEGINNING OF A NEW JOURNEY

 

Surat is considered as the main manufacturing unit in diamond production because out of 100 diamonds 80
are fashioned in Surat city.  60-70% of diamond manufacturing countries do not have technique, manpower,
machinery, cutting and polishing skills and infrastructure settings. So, all the diamond producers’ countries
are luring Indian manufacturers to locate their manufacturing unit in their country.’ Therefore Surat has its
own existence in diamond production.

DIAMOND INDUSTRY IN SURAT

 The word 'Diamond' brings a sparkle in every woman's eyes. These precious stones are the best weapons to
woo a woman, be it proposing for a wedding or gifting on anniversaries. Today diamond epitomizes
prosperity, endurance, dignity and peerless quality.

Talking about diamonds and that's when the city of Surat comes to your mind. This city has been a home to
the world's biggest diamond industry since the early 1960's. Surat is the largest market of diamond
polishing, cutting and crafting in the whole world. Surat has left its mark of excellence in all the three
departments of the business— manufacturing, importing and the export of processed diamonds.Surat
produces insignificant amount of diamonds, however due to the availability of low waged workers and
presence of the international market, Surat prevails the diamond polishing industry.

Surat ranked 8th in India with GDP of $40 billion in the Fin Year 2011-12, which was $14 billion in
2010.The per capita GDP which was $8000 in 2010.Surat is known for diamonds, textiles and recently for
diamond-studded gold jewelry manufacturing. Surat registered a GDP of 11.5% for seven fiscal years from
2001-2008 which was the Fastest growing GDP in India. The city accounts for:
v  1.90% of the world’s total rough diamond cutting and polishing,
v  2.99.99% of the nation’s total rough diamond cutting and polishing,
v  3.90% of the nation’s total diamond exports,
v  4.40% of the nation’s total man made fabric production,
v  5.28% of the nation’s total man made fiber production
v  6.18% of the nation’s total manmade fiber export, and
v  7.12% of the nation’s total fabric production.
v  8. The first revolving restaurant built in Surat

HISTORY BEHIND SURAT DIAMOND INDUSTRY

Diamonds are believed to have been recognized and mined in India first, at the spots where considerably
alluvial stone deposits could be found many centuries ago along the rivers Penner, Godavari and Krishna.
However, the diamond industry started  when a local businessman in Surat had brought a boat full of diamond
cutters from East Africa to commence the city's diamond polishing industry in 1901.

The diamond cutting and polishing industry started way back in the 1960s when some entrepreneurs
belonging to the Patel community of Saurashtra started importing rough diamonds and exporting polished
diamonds. This industry grew gradually until the 1980s after which there was rapid growth. This rapid growth
was the result of the proximity of Surat to Mumbai which helps in importing the unfinished diamonds and
exporting the polished diamonds. Also the Patels from Saurashtra and the Jains from north Gujarat venturing
together helped the diamond industry of Surat prosper. The economic reforms in 1991 added to the
enlargement of this industry.

CONTRIBUTION OF DIAMOND IN DEVELOPMENT OF SURAT

  80 out of 100 diamonds are polished in Surat and its surrounding areas. Till now Surat has
fulfilled the requirement of loose diamonds for the world Jewelry market.
  The INDIAN DIAMOND INSTITUTE alone produces 1200 students per annum. Out of
1200, 400 students come from Jewellery designing, but due to lack of Jewellery industry they
have to proceed to other cities for employment. After the implementation of this Jewellery
park at least 40 to 50 thousand people will get employment.

STATISTICS OF SURAT DIAMOND INDUSTRY

 In  2005, Surat was reported to have cut 92% of the entire world's diamond pieces and earned India
$15 billion in exports. India imports for polishing about $11 billion worth of rough diamonds
annually, with 80% coming from diamond mining companies and the rest from Antwerp.
 The city contributes to more than 80% of the Indian annual export amounting to Rs 70,000 crore.
Every 9 out of 10 diamonds you get to see in the stores in the big cities all over the world are cut and
polished in India and 75 % of the credit for the diamonds' shine goes to the Surat Diamond industry.
Over 1.5 million people are engaged in the diamond & diamond jewellery industry of Surat and they
have made the city, the heart of the nation's diamond polishing industry.
 The growth in the Indian exports can be highly attributed to the gem and jewellery industry of India.
The Industry valued at US$ 43 billion in the financial year 2011-12, is one of the leading growth
sectors of India’s export led economy and leading foreign exchange earner accounting for 14% of the
total Indian exports during the last financial year. Diamonds account for 54% of the total gem and
jewellery export basket of the industry and India is world’s leading exporter of Cut and Polished
Diamonds. Surat and many other cities and towns like Navsari, Amreli, Bhavnagar are popular
worldwide as big diamond manufacturing/processing centers whereas Mumbai serves as the diamond
trading hub.
FUTURE OF DIAMOND INDUSTRY
 The industry surely had to face problems like lack of technical expertise in the manpower but with
improving skills of the laborers, the Surat diamond jewelry industry is now getting orders of larger
and pricier stones. The irresistibly advantageous market processing the diamond jewellery is getting
bigger day by day. The state is also aiming to develop the laborers as jewellery makers in the true
sense with an overall development. 

 Arrangements are being made by the state and Surat Diamond Association  for training, research,
marketing and recognizing new potentials for the diamond industry. Also, the jewellery park of Surat
is trying to bring down major diamond manufacturers of Surat under a single roof. Most of the work
has now become computerized. The number of diamond consumers are increasing day by day and so
is the demand. Currently, the industry is growing at a phenomenal rate and with various government
efforts and incentives coupled with private sector initiatives, the Indian gems and jewellery sector is
expected to grow at a Compound Annual Growth Rate of around 13% during 2011 - 2013.

 There is an upcoming Jewellery Park for the Gem & Jewellery entrepreneurs which has all  state-of-
the-art facilities providing international level infrastructure of highest quality standards.
Diamantaires is the world's biggest diamond cutting and polishing center in Surat which has been
giving sleepless nights to the diamond manufacturers in Israel and Antwerp.

 
 
 
How COVID-19 reshaping the behavior of customers in the diamond industry 
We all have spent most of the year 2020 in the shadow of the COVID-19 pandemic. The world seems hanged
with lockdowns and social distancing, and people worldwide are still habituating with the idea of prolonged
indoor stays.
 
Out of thousands of downsides, the COVID-19 pandemic has taught an important lesson of life that nothing
matters more than the safety and security of ourselves at the end of the day.
 
We all have started re-evaluating the relationship we share with our loved ones during these lockdowns and
have reinforced the value of the people around us who genuinely care for us.
 
However, in terms of business perspectives, the level of activities have blown hard in the market after the
COVID-19 outbreak.
 
If we consider the luxury diamond and jewelry industry, it was not even completely revived from the 2019
slowdown when the pandemic arrived, which hit hard on the industry.
 
The major diamond mining companies across the world have voluntarily lowered their level of activity,
considering shutdowns of major diamond manufacturing units and anticipating the lowered demand for
luxurious products in the market.
 
Even most global diamond and jewelry trade shows are either canceled, postponed, or held virtually (but
recorded lesser activity) to contain the pandemic’s transmission.
 
Though there’s so much to discuss the consumer conduct post-COVID-19, it’s important to note that some
parts of the world are still under lockdown, and in others, the economic activity isn’t reinstated.
That’s why it’s too early to tell the extent of the consumer behavior change due to the pandemic. However, we
can trace the trend of their dynamics based on the current industry insights.
Customer behavior insights in the new normal:
 
• More rationalized purchase:
 
As discussed earlier, people have started feeling grateful for the things and relations they used to take for
granted post-covid. This feeling of kinship is reflected in their luxury purchases.
 
This awareness and gratitude are on top of the customers’ minds. People feel more inclined to give a cardinal
gift to someone they do love and care about than how they felt pre-covid.
 
Most consumers’ eyes on buying and wearing fine jewelry symbolize their love and relation for their kin.
Also, it makes them feel connected to that person.
 
This behavior provides excellent potential for the diamond and jewelry business to improve their marketing
prowess and re-engage with consumers during and after the crisis period.
 
• Relevancy matters the most:
 
Typically, consumers desire timeless classic products when they buy diamonds or jewelry. After COVID-19,
this trend has changed significantly.
 
People are now looking for more meaningful and sentimental pieces, even more than quality or practical
pieces to give their loved ones.
 
When it comes to emotional gifts, diamonds are the first choice of all customers as diamonds or diamond
jewelry are a versatile luxury that lasts forever.
 
Also, living through the pandemic’s most challenging times, people are now more conscious and aware than
ever about the environment and pitfalls of irresponsibility in society.
 
For the diamond industry, this will increase customer scrutiny over supply chain practices, Kimberley process
compliances, WDC System of Warranties, and the integrity of the products they purchase.
 
• Buy less, but Valuable:
 
The pandemic has moved people to more rational spending and emotional connection. Consumers are most
likely to buy fewer things but invest more in the quality of the products they do purchase.
 
This may lead to spending more or the same on the diamonds and jewelry over the other luxury items for
investment purposes because they are more authentic and vogue than expensive.
 
• Safety first:
 
To recover from the business’s severe loss due to lockdown and unresponsiveness to e-commerce, the
diamond & jewelry industry will have to face new social distancing and public safety issues during the
upcoming festive seasons.
 
This year, the holiday season shopping trend is likely to be more pronounced, as many will avoid going to the
crowded shopping areas or even be forced to stay at home if predictions about an increased transmission rate
during the winter come to pass.
 
According to recent De Beer’s research, consumers feel the safest when they shop online. Still, they do visit
the local independent jeweler to gain an understanding of the product and quality.
 
To retain the business, the industry must consider more ethical and value-creating luxurious products with the
best brick-and-mortar (omnichannel) approach towards sales.
 
 
 
 
 
 
 

WORDS OF WISDOM

After facing the slowdown and the pandemic’s adverse effects, the luxury industry is returning to track by
focusing not on exponential goals but realistic goals in the coming holiday seasons.
 
As the end of the year approaches, the festivals like Diwali, Thanksgiving, Christmas, and the New Year
arrive in the world, which shows the signs of increasing market recovery.
 
We believe that emotions and a happy state of mind play a pivotal role in buying diamonds. Currently, the fear
of contagion and infection is stopping people from going out shopping.
 
Hence, it is crucial to adhere to all the authorities’ protocols to contain the virus-transmission during the
shopping to stabilize the business.
 
In light of this, many countries educate people to shop safely and hold campaigns to encourage customers to
shop early amidst the pandemic through various campaigns—for example, the New Holiday Tradition
campaign by the National Retail Federation in the USA.
 
All these initiatives increased the demand for diamonds across the globe, including India, the USA, Hong
Kong, and Europe. They proved that the luster of the diamond industry would never fade.
 
However, we must utilize this precious time to be future-ready for the upcoming era of cutting-edge
technology in the industry.
 
This practice to train your people will ensure smoother operations even in the worst possible scenario besides
increased business soon when things get back on track.

DIAMOND POLISHING
 

Surat is famous for its diamond and textile industries, along with silk and chemicals. It is at the heart of the
world's diamond-polishing industry, which in 2005 cut 92% of the world's diamond pieces and earned
India $15 billion in exports. Gujarati diamond cutters, emigrating from East Africa, established the
industry in 1901 and, by the 1970s, Surat-based diamond cutters began exporting stones to the US for the
first time. Though much of the polishing work takes place on small weight stones, Surat's workshops have
set their eyes on the lucrative market for finishing larger, pricier stones in the future.
The Surat diamond jewelry industry operates in the field of manufacturing, importing as well as exporting.
Nearly 15 lakh people are associated with the diamond jewelry industry of Surat. The fact that every 9 out
of 10 diamonds cut and polished in the world hail from India and 75 % of all these diamonds are from the
Surat Diamond manufacturers.
Surat specializes in ornaments decked with diamonds. These are exquisite pieces of new collections
appearing everyday in the market to meet the worldwide high demand. The diamond jewelry industry in
Surat imports rough uncut diamonds and gives them its dazzling brilliance for which diamonds are adored
all around the world.
The industry surely has to face problems like lack of technical expertise in the manpower. However, with
improving skills the Surat diamond jewelry industry is now getting orders of larger and pricier stones. The
irresistibly lucrative market processing the diamond jewelries is getting bigger day by day. Not only
diamond polishers, the state is aiming to develop the laborers as jewelry makers in the true sense with an
overall development.
The associations and co - operatives in the Surat diamond jewelry industry are trying to arrange for
training, research, marketing and recognizing new potentials for the diamond jewelry industry.
Accordingly, the jewelry park of Surat is trying to bring down major diamond manufacturers of Surat
under a single umbrella. Most of the work has now become computerized. The Surat diamond jewelry
industry is flourishing day by day with the soaring prices of diamonds as well as the increased number of
consumers.
LIST OF DIAMOND PRODUCING COUNTRIES
 TOP 10 DIAMOND PRODUCING COUNTRIES 

NAME OF THE PRODUCTION(in carats)

COUNTRY

RUSSIA  23,000,000

BOTSWANA 16,000,000

CANADA 13,000,000

ANGOLA 8,500,000

SOUTH AFRICA  7,700,000

DR CONGO 3,700,000

NAMIBIA 1,900,000

LESOTHO 1,100,000

AUSTRALIA 340,000

TANZANIA 260,000

TYPES OF DIAMONDS
1. NATURAL DIAMONDS

A natural diamond is made from carbon and is the hardest natural known substance on earth. Natural
diamonds are created over a period of one to three billion years, at least 85 miles below the earth’s
mantle under natural conditions of very high pressure and high temperature. Once a diamond has been
created in these underground conditions, it travels via molten rock to the earth’s surface, where it is
mined, refined, and turned into beautiful jewelry or used for industrial purposes.
2. LAB GROWN DIAMONDS 
Lab grown diamonds also known as man-made diamonds are somewhat of a growing trend that is developing
more and more in the last few years. The reason is that it is a technological product just like any other
“gadget” (no disrespect intended). As such, as technology evolved, these diamonds became cheaper and
cheaper to manufacture. While once prices of lab grown diamonds were 30% beneath equivalent regular
diamonds, today they are 50%-60% cheaper and some say that in just a few years they will become even 70%
cheaper and more.
 
 
 
3. TREATED DIAMONDS 
Diamonds that were mined like the regular diamonds mentioned above but that their attributes were artificially
enhanced / manipulated to get a better looking diamond. Common treatments include inclusion filling where
using special material they “hide” inclusions and color enhancement. These treatments are usually done to
diamonds that cannot be sold otherwise and therefore these diamond prices are dramatically lower than the
equivalent natural non-treated diamond.
4. NATURAL FANCY COLOR DIAMONDS
These are the most beautiful types of diamonds. Colored diamonds are extremely rare. approximately 1 to
10,000 compared to regular diamonds. The spike in awareness (and with it demand) came last decade as more
and more celebs were seen wearing them – whether as fashion statements on the red carpet or receiving them
as engagement rings. Most famous are the pink diamonds and canary yellow diamonds but these gorgeous
diamonds come in all colors of the rainbow – Blue, purple, violet, red, green, yellow, gray, white, black., as
well as combinations of these colors.
Basically there are hundreds of dazzling colors. Being so rare and expensive, these diamonds are also divided
into subsets - Natural colored diamonds, Treated colored diamonds and lab grown colored diamonds.
 
 
 
 
 
 
 
THE COLORS OF NATURAL DIAMONDS

1. CHAMPAGNE DIAMONDS
The beautiful earth tones of natural champagne diamonds range from subtle champagnes to rich cognacs and
dark chocolate.  Their golden tones make them a softer, gentler and sometimes more affordable alternative to
the colorless diamond.

2. BLACK DIAMONDS

There are two types of black diamonds in the market. The majority are natural treated diamonds, and the more
rare are the natural untreated, which means the stone isn’t subjected to any irradiation. 
 
 
 
 

3. FANCY YELLOW DIAMONDS 

The golden sunshine of natural fancy yellow diamonds is highly prized for engagement rings.  This
happy color ranges from pale to vivid. While still rarely found in nature, the yellow diamond is the
least rare of the natural fancies.
 

4. FANCY PINK DIAMONDS 

The beautiful pink diamond brings a soft femininity to an engagement ring.  Naturally occuring in a
full range of interesting hues, from salmon to purple, your unique pink diamond engagement ring can
perfectly match your style.
 
  
 
 
 

5. FANCY BLUE DIAMONDS 

Fancy blues range from very light shades through to a steel blue hue, and derive their color from boron
impurities.  Highly sought after yet extremely rare, this diamond might be considered earth's most
valuable treasure.
 

6. FANCY GREEN DIAMONDS 

For the ultimate nature inspired engagement ring, a green diamond would be the crowning jewel.
Extremely rare yet spectacular in hue, from bluish to yellowish, light to dark.
 
 
 
 

THE DIFFERENT SHAPES OF DIAMONDS

 1. ROUND BRILLIANT DIAMOND 

Absolutely perfect and timeless aesthetics, the round brilliant cut remains the sure value. Calibrated in 1919
by Marcel Tolkowsky to give it maximum brilliance and shine, the stone has 57 facets. This shape has
remained the most sought-after since then because it is the most brilliant. The certificates of the GIA, HRD
and IGI laboratories (the three most reputable) note all its size parameters. Ratings range from Fair (Poor) to
Excellent. We recommend diamonds with either Very Good or Excellent cut ratings.

2. PRINCESS SHAPE DIAMOND 

The princess is particularly adapted to architectural jewelry with clean lines. It is a square or rectangular cut,
with generally 76 facets that ensure a strong sparkle. A princess cut is smaller and less expensive than a round
brilliant of equal weight. The width of the table requires good purity. For princess sizes, we therefore
recommend that you prefer IF-VVS-VS purities and avoid SI1-SI2 and Piqué.

3. EMERALD SHAPE DIAMOND

Originally, it was reserved for emerald stones, from which it takes its name. The Emerald cut gives a
translucent light, unique of its kind. It is a distinguished cut, sober but very "class". Requires diamonds of
good purity: the table is important and the slightest defect becomes visible. This is why the emerald diamond
must be pure or VVS-VS. At worst SI1, but then the inclusions must be on the side.

4. OVAL SHAPED DIAMOND

The 56 facets of the oval waist give a resolutely modern shape that unites the classicism of the round brilliant
and the elegant femininity of the more elongated shapes such as the marquise and the pear. Often set as a
center diamond on solitaires or rings, the oval shaped diamond can also be set as a surrounding stone. There
are also very beautiful oval diamond wedding rings.

5. PEAR SHAPE DIAMOND

A 58-faceted drop of water, often worn as a pendant, which holds as much of the round waist as the marquise
with its rounded and pointed edges. The pear shape is by far the most difficult to choose because it is rarely
well cut. It is indeed very difficult to find the right compromise between its length and width. But a beautiful
pear shaped diamond is a marvel of nature and human work.

6. CUSHION SHAPE DIAMOND

The cushion diamond is a very trendy shape nowadays because jewelry brands have used it a lot in their
creations in recent years. Very elegant and very brilliant, it is a good alternative to round diamonds, even if its
brilliance remains nevertheless inferior to that of the round brilliant diamond. The ideal is to set it on a ring
with round brilliant diamonds around it to enhance its brilliance.
 
 
4 C’S OF DIAMOND QUALITY 

GIA created the first, and now globally accepted standard for describing diamonds: Color, Clarity, Cut and
Carat Weight.

 Diamond Cut
A Diamond’s Cut Unleashes Its Light
Diamonds are renowned for their ability to transmit light and sparkle so intensely. We often think of a
diamond’s cut as shape (round, heart, oval, marquise, pear), but a diamond’s cut grade is really about how
well a diamond’s facets interact with light. Precise artistry and workmanship are required to fashion a stone so
its proportions, symmetry and polish deliver the magnificent return of light only possible in a diamond.
A diamond’s cut is crucial to the stone’s final beauty and value. And of all the diamond 4Cs, it is the most
complex and technically difficult to analyze.
To determine the cut grade of the standard round brilliant diamond – the shape that dominates the majority of
diamond jewelry – GIA calculates the proportions of those facets that influence the diamond’s face-up
appearance. These proportions allow GIA to evaluate how successfully a diamond interacts with light to create
desirable visual effects such as:
 Brightness: Internal and external white light reflected from a diamond
 Fire: The scattering of white light into all the colors of the rainbow
 Scintillation: The amount of sparkle a diamond produces, and the pattern of light and dark areas
caused by reflections within the diamond

 Diamond Carat Weight

Diamond Carat Weight Measures a Diamond’s Apparent Size
Diamond carat weight is the measurement of how much a diamond weighs. A metric “carat” is defined as 200
milligrams.
Each carat can be subdivided into 100 ‘points.’ This allows very precise measurements to the hundredth
decimal place. A jeweler may describe the weight of a diamond below one carat by its ‘points’ alone. For
instance, the jeweler may refer to a diamond that weighs 0.25 carats as a ‘twenty-five pointer.’ Diamond
weights greater than one carat are expressed in carats and decimals. A 1.08 carat stone would be described as
‘one point oh eight carats.’
All else being equal, diamond price increases with diamond carat weight because larger diamonds are more
rare and more desirable. But two diamonds of equal carat weight can have very different values (and prices)
depending on three other factors of the diamond 4Cs: Clarity, Color, and Cut.
It’s important to remember that a diamond’s value is determined using all of the 4Cs, not just carat weight.

 Diamond Color Grade

Diamond Color Actually Means Lack of Color
The diamond color evaluation of most gem-quality diamonds is based on the absence of color. A chemically
pure and structurally perfect diamond has no hue, like a drop of pure water, and consequently, a higher value.
GIA’s D-to-Z diamond color-grading system measures the degree of colorlessness by comparing a stone under
controlled lighting and precise viewing conditions to masterstones of established color value. Many of these
diamond color distinctions are so subtle that they are invisible to the untrained eye; however, these
distinctions make a very big difference in diamond quality and price.

 Diamond Clarity
Diamond Clarity Refers to the Absence of Inclusions and Blemishes
Natural diamonds are the result of carbon exposed to tremendous heat and pressure deep in the earth. This
process can result in a variety of internal characteristics called ‘inclusions’ and external characteristics called
‘blemishes.’
Evaluating diamond clarity involves determining the number, size, relief, nature, and position of these
characteristics, as well as how these affect the overall appearance of the stone. While no diamond is perfectly
pure, the closer it comes, the higher its value.

The GIA Diamond Clarity Scale has 6 categories, some of which are divided, for a total of 11 specific grades.
 Flawless (FL) No inclusions and no blemishes visible under 10x magnification
 Internally Flawless (IF) No inclusions visible under 10x magnification
 Very, Very Slightly Included (VVS and VVS ) Inclusions so slight they are difficult for a skilled
1 2

grader to see under 10x magnification

 Very Slightly Included (VS and VS ) Inclusions are observed with effort under 10x magnification,
1 2

but can be characterized as minor

 Slightly Included (SI and SI ) Inclusions are noticeable under 10x magnification
1 2

 Included (I , I , and I ) Inclusions are obvious under 10x magnification which may affect
1 2 3

transparency and brilliance.

DIAMOND MANUFACTURING PROCESS FROM ROUGH TO POLISH

                           Rough                                                                   Polish
A rough diamond is cut and polished to give maximum brilliance. The purpose of cutting,
faceting and polishing is to bring out refraction and reflection of light.

Rough – Planning – Manufacturing – Polish

 
 Now, the process of rough manufacturing to polish grading. In this process there are five
steps are there as:
 
1)                      Planning & Bruiting
2)                      Re- Planning & Final Bruiting
3)                      Parameter Distribution
4)                      Parameter Distribution & Polishing
5)                      Grading

 
FACTORS AFFECTING DIAMOND INDUSTRY : PESTEL ANALYSIS

PEST analysis (Political, Economic, Social and Technological analysis) describes a framework of macro-
environmental factors used in the environmental scanning component of strategic management
Pestel analysis has been broadly classified below:
Political Factor:
Political factors include Inter-country relationship, political stability, government policy on foreign direct
investment, terrorist activities, trade barriers and taxation policy. When a government changes its policy, an
organization may be given more opportunities or may face more threats. Countries' political instability can
affect any industry. Change in the ruling party will also affect the industry. As the diamond industry needs
more human power and more land than the government should provide land at a low rate and so the industry
will grow. On the other hand, the diamond industry in China too is increasing, so how the Indian political
factor can save their diamond business is a most important factor which affects the industry more.
Economic Factor:
Economic factors include general country economy, income level of citizens in a country, inflation, taxation
rate and conditions within an industry which all affect an organization in one way or another. As this industry
does more of their businesses with beer, they need to do import export with that country so if the price of
dollars will increase or decrease then it will definitely affect the whole business. Now the diamond industry is
international so if one wants to open their units in other countries where the demand is more then also it
affects the economy of the industry. If the government changes their taxation policy then also the industry
will be affected. If petrol and diesel prices increase then it will cost more to the transportation industry.
 

 
Social Factor:
Within the diamond industry, there are a number of crucial social and environmental factors that must be
considered. These include conflict diamonds, child labor, the role of state institutions, blood diamond
campaigns, and the resulting efforts on global demand. These are all important in terms of social welfare, but
increasingly they are directed affecting production and consumption patterns as well.
Social factors such as demographic factors (population trends) like birth rate and aging population have
significant impact on an organization’s strategy. In many Asian countries, aging population has reduced the
sales of an organization producing infant products but it also has brought opportunities for an organization to
sell new products
The diamond industry also does many social things as every industry has social involvement. This industry
has opened some charity foundations through which  they are going to give knowledge or say they provide
“Siksha” to poor children. Sometimes they organize some awareness camps. They also provide good facilities
to their employees. Diamond industries provide more job opportunities for the country.
 
Technology Factor:
Technological changes have altered the way organizations operate. As we know continuous updating is
important in any business and if not, the company will soon be vanished by the competitors. The industry has
to adopt new technologies as it will be beneficial in all aspects. Diamond industry adopted all new
technologies and really works better than earlier. Security is more important so they use security cameras,
some software to secure their data as data is more valuable than diamonds. Different technologies should be
adopted even for workers to make their work easier. They used some software for designing diamonds as well
as cutting and polishing the diamonds. Through that they produce the best quality diamonds.
 
 
Environmental Factors :

Environmental factors like increased awareness on issues of global warming and energy consumption
have re-directed the world's attention. As a result, firms are trying to be more environmentally friendly
by producing more environmentally-friendly products. Every industry is affected by the environment
and vice versa. This industry organizes camps for awareness of the environment and through that they
spread the message “Save Tree”. They also grow trees at different places and protect the environment.
This industry not only pollutes the environment by giving back any type of wastage like wastewater,
smoke in air, hard wastage.

Legal Factor : 
As stated above DeBeers has an anti-trust agreement with the European Union. This agreement has
affected the level of control the company used to have over the Diamond Industry, making it impossible
for the Company to control the price, supply and demand of the diamond industry. In addition, the
launching of the Kimberley Process Certification Scheme (Kimberley Process) has made it mandatory
that diamonds being traded must have this certification to identify them as conflict-free diamonds.

 IMPACT ON INDIAN DIAMOND INDUSTRY AFTER COVID 19

The main statistics used by the diamond market experts in April-May were the data on the number
of COVID-19 infections in India. The restrictions on the activities of the Indian cutters could put
pressure on the demand and become a key trigger for the market slowdown, especially during its
traditional seasonal weakness.
In March, after the growth in the first two months of this year, the sales of the major suppliers,
ALROSA and De Beers, were below their historical levels for this period by 26% and 15%,
respectively. The reason for this is a structural reduction in their mining capacities, during which
the diamond supplies this year will decline by 20% compared to 2019.
At the same time, the demand remains high, as there has been no overstocking in the midstream
thanks to the demand for polished diamonds from retailers who are having great buyer traffic in the
wake of the economic recovery. As a result, the rough diamond prices have increased by 9% since
the beginning of the year. The rise in prices may continue, ALROSA says on the basis of the
analysis of its clients’ behavior who purchase their maximum allocations and make advance
payments for their future deliveries.
However, it is not excluded that the prices will reach a plateau in the second half of the year after
the balance of supply and demand is normalized. According to ALROSA, this will not be due to the
current problems in India, especially taking into account that the Covid-19 infection rates in this
country began to decline at the end of May. Rather, the rough diamond market will slow down
under the influence of the deferred demand for travel, restaurants, and cinemas, which is growing
with the full reopening of the economy, the symptoms of which were already seen in March-April.
The April statistics show that the appetite of the diamond cutters has not decreased yet, although
there are reasons to believe that the consequences of the situation caused by the coronavirus in India
will occur in May.
In April, the imports of rough diamonds to India increased compared to the same period in 2019 (in
2020, there were no imports due to the pandemic), as well as to March this year. Compared to
March 2021, the rough diamond supplies increased by 21% (to $1.69 bn). India’s polished diamond
exports in April were at a two-year high level of $2.25 bn, up 37% compared to April 2019.
The rough diamond imports to Belgium in April 2021 amounted to $932.75 mn, which was 5%
higher than in March and 13% higher than in April 2019. The growth was driven by strong
jewellery sales in the key markets.
As for jewellery sales in the US, April was the fourth consecutive month of the growth - by April
2019, the sales rose by 14%, and by 255% compared to a year ago, according to the SpendingPulse
report made by Mastercard. The online sales also rose compared to April last year, despite the
record growth in e-commerce at the time. However, according to the National Retail Federation
(NRF) estimates, the April sales in the US in the apparel and accessories (including jewellery)
category fell by 5% compared to March when the consumer spending using incentive checks was at
its peak. However, NRF expects the sales to remain strong in the summer as more consumers will
get vaccinated and start returning to work.
The China’s jewellery and watch sales in April were 31% higher than in 2019 (and 64% higher than
in the previous year) driven by the further economic recovery and consumer confidence.
According to Bain, the global luxury sales could return to their pre-pandemic levels this year
supported by the unexpectedly early economic recovery in the US and strong growth in China. In
the first quarter of 2021, the luxury revenue was 1% higher than in 2019, mainly due to the growth
in the domestic spending on luxury goods in China. According to Bain estimates, there is a 30%
chance that the market will continue to grow throughout the year. However, the more likely
scenario is that there will be a growth peak in the first quarter this year, and then the luxury
consumption will slow down due to cooling dynamics within the key markets and still limited
tourism.
IMPACT OF THE INDIA’S COVID-19 CRISIS
According to the review published by VTB Capital in early May, the fundamentals of the market
look very strong, but the future midstream activity is now under threat, given the worsening
situation with COVID-19 in India. The Indian diamond cutting sector did not close during the new
restrictions in the country, however, the cutting and polishing units had to decrease their capacity by
10-50% in April, and the manufacturers of small polished diamonds were mainly affected. The
main Surat cutting and polishing district in India saw an exodus of workers, which could also
negatively affect polished diamond manufacturing in the near future. The Bharat Diamond Bourse,
the main in India, was closed in April but later on, it continued to operate with restrictions.
With the onset of the second wave of COVID-19 in India, the industry participants optimized their
capacities and adopted strict preventive measures, Deputy CEO of ALROSA Alexey Filippovsky
said on May 18. “There is no quarantine, and if the Indian cutters and polishers take all necessary
measures to combat the spread of COVID-19, there will be no new restrictions on the operation of
their facilities,” he said.
Filippovsky said that 70-80% of capacities in the industry were loaded at present.
This is enough to process all the rough diamonds coming from the mining companies as the total
supply of rough diamonds has declined since the pandemic started. “In the fourth quarter of 2020
and the first quarter of 2021, when most of the suppliers were actively reducing their inventories,
the midstream was able to ‘digest’ all these volumes, despite the current COVID-19 restrictions.
Therefore, there is no reason to believe that bottlenecks are currently developing in the midstream,”
says the ALROSA’s top manager.
DIAMOND MINERS’S SALES
As a result, ALROSA does not expect its sales to decline due to the coronavirus impact on the
Indian cutting and polishing sector.
In April, ALROSA increased its sales of rough and polished products by 12% compared to March,
up to $401 mn (of which rough diamonds account for $383 mn). The results were supported by the
company’s successful high-quality rough diamond auctions, as well as by strong polished diamond
sales amid the sustainable high demand for jewellery in the key markets.
Meanwhile, the De Beers’ sales during its fourth sight held from May 3 to 18 were by 34% below
the historical averages for that period. The company sold its goods for a total of $380 mn, which is
15% lower than during the previous sight ($450 mn).
“We continue to see robust demand for diamond jewellery in the key US and China consumer
markets,” Bruce Cleaver said in a statement. However, the scale of the second wave of covid-19 in
India has led to reduced midstream capacity and subsequently lower rough diamond demand, during
what is already a seasonally slower time of year for midstream purchases,”- said chief executive of
De Beers Bruce Cleaver.
Rapaport estimates that the decline in the De Beers’ sales is due to the limited supply of rough
diamonds following a sharp decline in the inventories in January-March and the coronavirus
situation in India. At the same time, the prices remained unchanged in May, Rapaport said.
The reduction was quite expected, given the seasonal character of trade and the situation with the
spread of COVID-19 in India, and could potentially give an idea of the ALROSA’s sales results in
May, BCS believes.
Despite the De Beers’ poor performance, in the event of a coming decline in the number of COVID-
19 infections in India, the inventory replenishments in the midstream and the limited supply of
rough diamonds could trigger a new diamond price rise, VTB Capital said.
NEW PRICE GROWTH
The prices for rough diamonds that have risen by 9% since the beginning of the year may continue
their growth as the demand remains stable and the inventories are limited, Filippovsky believes.
“The market is in a structural imbalance, the supply is limited, going down by at least 20%
compared to 2019. At the same time, the demand continues to exceed our expectations. Raising the
prices is the only way to match supply and demand. I think there is still room for the continued
significant rise in the rough diamond prices that we saw in the fourth quarter of the last year and the
first quarter of this year,” he says.
At the same time, diamond production remains low. In the first quarter, the global rough diamond
production fell by 22% to 24 mn carats, driven by the suspension of the operations at Ekati, the
closure of the Argyle mine at the beginning of the year, and the 6-7 percent cut in the major miners’
production.
Even the relatively aggressive price increase that has been undertaken by the diamond miners over
the past 6 months was accepted by the market surprisingly calmly, Filippovsky notes. The
ALROSA’s clients preferred to buy 100% of their maximum allocations, although the company
allowed its clients to completely reject the allocations.
ADVANCE PAYMENTS AND whether THE DEMAND is SPECULATIVE
Moreover, most of the customers made an advance payment for future deliveries, which was rather
unusual. “Buyers are willing to make significant advance payments to secure the future diamond
supplies. This practice started in the fourth quarter of last year and continued and even intensified in
the first quarter of 2021. The majority of cutters and traders - amid the shortage of goods on the
market - are concerned that they may not fulfill all orders made by retailers. Using the advance
payments, they want to increase their ‘share of the pie’,” explained ALROSA’s Deputy CEO.
By the end of March, the advance payments for the rough diamond supply in April-May were
estimated at 21 bn roubles (about $280 mn).
If the market continues its growth and the demand outstrips the supply, the advance payments may
continue in 2022, Filippovsky predicts.
According to ALROSA, the strong demand is not speculative. “Judging by our communications
with the cutters and polishers, the midstream learned a lesson in 2018 and 2019 and is not going to
accumulate rough diamond inventories,” said the top manager of ALROSA. In turn, the “majors”
are focused on meeting the real confirmed demand in order to prevent overstocking and price
volatility.
deferred DEMAND FOR TRAVEL
Another risk for the rough diamond market is the outflow of funds from the jewellery to other
luxury spheres, primarily, travel when the economy is fully reopened. In April, the American
consumers spent most of their money in the spheres that previously faced the pandemic restrictions,
especially, at restaurants, and the total spending for restaurants surges for the second consecutive
month, according to Mastercard’s study.
As soon as the borders reopen and the consumers begin to travel, the diamond market will plateau,
admits Filippovsky of ALROSA. “The question is when it will happen. Initially, we thought that
this would happen in April-May, but, as we can see, it’s got a long way to go,” he says.
The moderate recovery in the tourist activity, which is already taking place, has not affected the
consumer sentiment in the midstream that receives a large number of orders from retail, the top
manager says.
 

A Brilliant Recovery Shapes Up: The Global Diamond Industry 2021–22

The past two years have been like riding a roller coaster!
Following rocky conditions in 2020, the diamond industry proved to be brilliant and resilient, and delivered a
spectacular showing in 2021. Every sector of the diamond industry performed very well in 2021 and
emerged from the Covid-19-induced crisis well-positioned for future growth. In 2020–21, the diamond
industry invested heavily in technology to gain operational efficiency, create marketing and consumer
experiences that attracted buyers, and accelerate e-commerce schemes. Even smaller mom-and-pop retailers
added online sales platforms to reach consumers who couldn’t shop in person or travel due to government-
instituted health measures.
And consumers were ready to spend. They were flush with cash from buoyant capital markets and economic
stimulus programs, and eager to spend it on meaningful gifts for their loved ones (or rewards for
themselves). Diamonds hit an emotional chord, which had been carefully cultivated by years of targeted
marketing campaigns and storytelling. Diamond jewelry was also easier to access than other luxury and
experience-based spending options.
Strong retail demand for diamond jewelry drove up prices and profit margins along the value chain. As
rough diamond sales increased, miners increased production volumes and pulled from inventories to keep
cutters and polishers busy. Healthy demand and price recovery for polished diamonds helped the midstream
achieve decade-high margins.
In 2021, the industry had a renewed sense of value, which it answered through partnerships, consolidation,
and technology. Now, every player along the value chain must add value—or remove hardship—on the path
from mine to market.
What does the future look like? If we’ve learned anything this year, it’s that we can always be surprised. Our
experience and history point toward two possible scenarios over the short- to mid- term, which we describe
in this report—the 11th annual report on the diamond industry prepared by the Antwerp World Diamond
Center (AWDC) and Bain & Company.
1. Recent developments in the diamond industry
The diamond industry experienced a spectacular reversal of fortune in 2021. In 2020, diamond
jewelry sales fell 14% and rough diamond sales declined 31%. Luckily, industry revenues
rebounded faster than expected and quickly exceeded 2019 levels. In 2021, revenue increased 62%
in the diamond mining segment, 55% for cutting and polishing, and 29% for diamond jewelry retail
—all rising above pre-pandemic levels (+13%, +16%, +11%, respectively). The trend was
consistent with previous economic downturns, when the diamond industry recovered with high
double-digit growth within 12 to 18 months after a crisis peak.

Demand for diamonds was strong throughout 2021, especially in the second half of the year. The
year started with a strong Chinese New Year season and Valentine’s Day. In the second quarter,
retailers placed orders earlier than usual to refill depleted inventories. Customers’ urge for
emotional gifting, increased savings, limited availability of experience-based substitutes, and
restricted travel boosted diamond jewelry purchasing. Demand grew even higher during the second
half of 2021 in preparation for the winter holiday season.

Strong demand for diamond jewelry and depleted inventories translated into price growth. Cutting
and polishing players in India relaunched production in the first and second quarters of 2021 and
started actively buying rough diamonds. Robust consumer demand, depleted inventories, and strong
balance sheets in the midstream contributed to higher demand for rough diamonds across the entire
assortment range. Even previously underperforming small and near-gem quality diamonds sold
well. Overall, in 2021, after a fall in 2019 and 2020 of 7% and 11%, respectively, rough diamond
prices grew by 21%. Prices for polished diamonds, which declined by 3% and 5% in 2019 and
2020, respectively, increased only 9% year over year. By the end of 2021, both rough and polished
prices were close to pre-pandemic levels and historic averages but still below their historic
maximums (20% below for polished and 26% below for rough diamonds).

Profit margins across the value chain quickly recovered to pre-pandemic levels. Upstream margins
increased roughly 9–11 percentage points (p.p.), reaching 2018–19 levels. The midstream and retail
segments both achieved decade-high profitability, growing 3–5 p.p. and 6–8 p.p., respectively.
Combined, mining and retail players generated $7 billion more profit in 2021 compared to 2020.
This was a result of improved market conditions and operational excellence programs the industry
undertook to combat lockdowns and competitive threats. The downstream also benefited from
growth in more profitable regions, and an increase in online purchasing contributed to faster
inventory turnover and lower operating costs.

For the first time in several years, there was no shortage in diamond financing. With more liquidity,
midstream players moved to cash sales and decreased their reliance on bank loans, reinvesting their
profits into the business. Financial institutions, such as Guggenheim Partners, extended financing
with confidence in the industry. Some larger traders shifted their focus, making finance
provisioning one of their largest sources of income.

Several trends continued on their pre-pandemic trajectories, namely, the divergence of lab-grown
diamonds from natural-mined diamonds; emphasis on environmental, social, and governance (ESG)
agendas; and beneficiation program development. Lab-grown diamonds continued to diverge into a
separate, more affordable jewelry category. The segment saw continued demand growth and price
decreases relative to natural-mined diamonds as lab-grown diamond supply increased and
technologies advanced; the average polished lab-grown retail price declined to 30% and the average
wholesale price to 14% of natural prices, down from 35% and 20% in 2020, respectively. ESG
topics appeared on executive agendas across the value chain, with climate impact and origin
transparency rising to the top. Both issues require cooperation between mining, cutting and
polishing, and retail players. In 2021, African diamond- producing countries renewed beneficiation
efforts. As more countries attempt to develop beneficiation programs, related cutting and polishing
activities are expected to increase.

Demand for diamond jewelry and polished and rough diamonds is expected to grow through the
first half of 2022. The market expects a strong holiday season, strengthening consumer confidence
in major markets, and limited supply of rough diamonds. In the medium term, demand for diamonds
could be affected by government policies surrounding economic stimulus and consumer travel
restrictions. Notwithstanding, in our base (“continued rebound”) scenario, in 2022 the market is
expected to demonstrate growth higher than the pre-pandemic period and return to historic growth
pace by 2023–24. Industry players must continue to pursue operational excellence programs, invest
in digital technologies, and advance marketing concepts and the diamond jewelry value proposition
to prepare for potential changes in market conditions.
 
2. Rough diamond production
In 2020, rough diamond production continued its steady decline, falling to 111 million carats.
Lower production was a direct result of the Covid-19 pandemic. Most companies reduced or
suspended production during the first half of 2020, with some restrictions lasting more than six
months. To support the market, major mining players adopted a price-over-volume strategy,
reduced sales volumes, and amassed record-high inventories. Even though the market started to
recover in the second half of 2020, rough sales volumes were 20% lower and rough prices were
11% lower, which translated to a 31% drop in rough diamond revenue.

Supply started to rebound in 2021. Net production grew 5% and reached 116 million carats, still
20% below pre-Covid levels in 2019. A 16-million-carat supply increase was offset by an 11-
million-carat loss from the closure of the Argyle mine in November 2020. The majority of growth
came from Botswana, Canada, Russia, and South Africa. In Botswana, a 5-million-carat
improvement came from De Beers treating higher-grade ore at Jwaneng. In Canada, production
renewal at Ekati and Renard contributed an additional 4 million carats. ALROSA increased output
by 2.5 million carats by treating higher-grade ore at Botuobinskaya, increasing ore processing
volumes at Nyurbinskaya pipe and Udachny mine, and resuming production at Aikhal mine and
Verkhne-Munskoe deposit. De Beers’ South African production increased with the higher-grade ore
from the final cut of the Venetia open pit.
Rough diamond sales increased 62% in 2021. Miners increased production volumes and pulled
from inventories to satisfy strong demand from cutters and polishers. Rough prices increased as
midstream companies rushed to restock to meet growing demand. At the end of 2021, upstream
inventories hit historically low levels—about 29 million carats, which is close to average technical
stock levels. As a result of robust sales, rising prices, and cost-cutting programs in the first half of
2021, mining companies saw 9–11 p.p. improvements in margins on average.

The year 2021 was rich with mergers and acquisitions and joint venture activity. Rio Tinto acquired
the remaining 40% share of Diavik, becoming its sole owner. Rio Tinto also formed a joint venture
with Angolan ENDIAMA to explore Chiri kimberlite in the Lunda Sul region of Angola. Gem
Diamonds sold Ghaghoo mine in Botswana to a joint venture between Botswana Diamonds and
Vast Resources. Lucapa purchased the Australian Merlin mine. Visionary Victor Resources
purchased Firestone Diamonds’ Botswana operations (primarily its BK11 mine, which has been on
care and maintenance since 2012). Perth-based Burgundy Diamond Mines acquired Ellendale mine
in Australia, which was mothballed in 2015 but could restart fancy yellow diamond production by
late 2022.

ESG agendas continued to gain importance among investors and consumers. For mining companies,
one of the most prominent topics on the ESG agenda is carbon neutrality. De Beers committed to
reach carbon neutrality (Scopes 1 & 2 greenhouse gas [GHG] emissions) by 2030, and ALROSA is
designing its climate and environmental strategies to decarbonize its operations. Both companies
are investing in promising technology that enables kimberlite to absorb carbon dioxide.

Traceability is another priority for mining companies. In response, De Beers is launching a Code of
Origin program supplemented by its Tracr platform, ALROSA is developing noninvasive laser
marking technology, and many companies are partnering with third-party traceability solution
providers. ALROSA, AGD Diamonds, and Lucara are working with Sarine to give buyers the
ability to trace the origin of their diamonds.

Production is expected to hit 120+ million carats in 2022 but is unlikely to reach pre-pandemic
levels within the next five years. The largest short-term threat is new coronavirus strains (e.g., the
omicron variant) that might disrupt production and logistics again. Major new projects have not
been announced and investments in exploration are limited, so production growth will likely stay at
1% to 2% per year during the next half-decade. Promising demand growth and production scarcity
support stability or further price growth for rough diamonds.
 
3. Cutting and polishing
In 2020, cutting and polishing revenue fell 25%. Three factors contributed to the decline: disruption
of the operations and logistics across the value chain, decline in jewelry sales due to lockdowns, and
reduction in the prices of polished diamonds by 5%. A stronger-than-expected holiday season
prompted early demand recovery and helped midstream players finish 2020 on a more positive
trajectory. Despite the challenging start of the year, toward the end the midstream delevered excess
inventory and improved profit margins 1–2 p.p. from 2019 levels.
Healthy demand and polished price recovery turned 2021 into a lustrous year for the midstream and
delivered decade-high margins. Demand was driven by swift economic recovery globally, increased
interest in diamond jewelry in the US, as well as retail footprint expansion in smaller Chinese cities.
Polished diamond sales rose 55%. The biggest winners were players with enough cash to buy rough
diamonds at steep discounts (30% to 40%) between March and September 2020. Those companies
had enough inventory for the market resurgence in 2021. Most of the rough diamonds bought in
2020 were sent to cutting and polishing centers in the beginning of 2021, building back the depleted
rough stocks. As a result, rough diamond imports in India significantly surpassed rough diamond
sales in 2021.

In 2021, Indian cutters and polishers increased their net rough purchases by 94% to satisfy strong
demand from retail. After severe lockdowns in 2020, India’s factories reopened to replenish
inventories and meet growing demand. A second wave of Covid-19 lockdowns temporarily
decreased labor availability from April to June 2021. But the shortage was mitigated by
vaccinations, migrants returning to work after seasonal kharif sowing, and social distancing
measures.

Chinese cutting and polishing activities grew 43% in 2021 but did not reach pre-pandemic levels.
China’s jewelry market recovered rapidly, driving an increase in imports of rough diamonds.
However, labor shortages and difficulties in accessing rough diamonds due to travel constraints
drove up the cost of manufacturing. Combined, those factors led to competitors from India taking
even more market share from manufacturers in China.

For the second year in a row, Antwerp increased its cutting and polishing activities to meet the
demand for high-end goods. Labor costs and labor shortages remain a major barrier for growth.
 
The year 2020 exacerbated the need for improved efficiency. Companies sought technologies to
gain higher yields, increase manufacturing efficiency, lower labor costs, and enable traceability.
Major players are also benefiting from dynamic pricing tools and the ability to customize offerings
on their own digital platforms. Automatic cutting and polishing was a hot topic in 2021. Most
advanced players are experimenting with Synova’s DaVinci Diamond Factory, FENIX, Galahad
Compass from Lexus/OctoNus, and OGI Solico machines. The tools have high costs and low
technological maturity so far, so players with access to cheap labor are not expected to switch in the
short term.

Trends toward consolidation and removing intermediaries continued in the midstream segment.
Major mining companies redistributed rough diamond sales allocations to the largest polished
diamond manufacturers, integrated retailers, and major dealers of specific assortments, moving
away from non-value-adding traders and dealers to minimize speculative sentiment. Online sales of
polished diamonds via manufacturers’ proprietary online platforms further reduced the need for
intermediaries.

Two other major trends continued to develop: beneficiation and mine-to-market partnerships.
Beneficiation programs in Africa expanded successfully and improved transparency. Partnerships
are becoming more popular as well. In 2021, wholesaler Samir Gems and jeweler Taché Company
agreed to fund Meya Mining in exchange for rights to its products. Retailers also pursued
midstream partnerships to get exclusive rights to special diamond cuts. New teaming efforts added
to existing profit-sharing partnerships, such as those between Lucapa Diamond Company and
Safdico International and between Lucara Diamond Corp. and HB Antwerp. These manufacturers
are also teaming with high-end retailers, such as Graff Diamonds and LVMH.

In 2022–23, we expect midstream performance will be largely influenced by diamond jewelry retail
performance, expectations for continued growth in demand and consumer sentiment, and access to a
limited supply of rough diamonds. Polished diamond top line is expected to follow retail sales
dynamics, which in turn are influenced by physical retail footprint expansion and e-commerce
development. Vaccine rollout and government economic responses will influence consumer
sentiment. Regardless of the market situation, midstream players that have secured access to
primary rough supply via partnerships or sightholder agreements and that invest in new
technologies and optimize sales operations will benefit the most. It will be important to watch out
for the direction in rough and polished prices. The gap between rough and polished prices will
define overall midstream segment profitability, the effect of which we will see in full by mid-2022.
 
4. Diamond jewelry retail
Diamond jewelry sales decreased 14% in 2020 because of store closures, wedding cancellations,
and travel restrictions. In China, strong local consumption helped demand recover in the second half
of the year. The US market started to recover in the third and fourth quarters. In China and the US,
consumption declined 11%.

In 2021, the personal luxury and diamond jewelry markets experienced decade-high growth (+35%
and +29%, respectively). Diamond jewelry sales rebounded as Covid-19 restrictions relaxed and
experience-spending opportunities remained low. Marketing and a resurgence of wedding demand
also lifted sales. Coronavirus variants and new lockdowns dampened consumer optimism but were
largely offset by vaccination rollouts in key diamond-consuming regions.

In 2021, diamond jewelry retailers expanded their assortments to address a growing trend of
sustainable jewelry. In addition to traceability programs, companies experimented with recycled
and pre-owned jewelry. Tiffany & Co. launched a new product line made from recycled gold, and
Signet released a collection of reclaimed gold and repurposed diamonds. Top retailers also adopted
pre-owned jewelry sales through new lines and acquisitions. Blue Nile relaunched myGemma, a
collection of pre-owned, high-quality engagement rings, and Kering purchased a 5% stake in
Vestiaire Collective, an e-commerce platform for pre-owned luxury items.

US retail fared best, with 38% growth in year-over-year diamond jewelry sales and 23% growth
relative to 2019. Macro factors—including a substantial economic relief package (37% of GDP),
unemployment rate reductions, a stock market surge (30%), and vaccinations—boosted consumer
confidence and spending in 2021. Consumers had an emotional urge to spend the savings they
accumulated in 2020, but experience-based gifting options were limited. The pandemic rapidly
accelerated e-commerce, even for independent US retailers: 90% of jewelry retailers now have
online platforms. Retailers optimized brick-and-mortar footprints by closing underperforming, mall-
based stores and expanding off-mall locations that were less vulnerable to Covid-19 containment
measures. The promotion of diamonds also increased a notch. Tiffany & Co. engaged Beyoncé and
JAY-Z to star in its “About Love” campaign, and the movie House of Gucci featured a large
diamond jewelry wardrobe.

In China, diamond jewelry retail increased 19% year over year, exceeding its pre-Covid-19 level by
6%. China had the most successful vaccination program globally, vaccinating 85% of its
population. Registered marriages increased 8% in 2021 but stayed below 2019 levels, leaving room
for growth. The National 14th Five-Year Plan unleashed large spending potential in lower-tier cities
and suburban areas. Retailers responded by adding physical stores in lower-tier cities and switching
to corner-store formats in residential locations. Retailers also joined online marketplaces, such as
Pinduoduo. Livestreamed sales on social networks, such as Weibo and TikTok, supported growth;
jewelry accounted for 20% of livestream sales revenues. Online channels stimulated diamond sales
in lower-tier areas with limited retail footprints. The largest retailers invested in “smart retail”
projects, such as personalized jewelry design and instant online customer assistance, and optimized
and automated their inventory distribution processes. Smart retail attracted more Gen Z customers,
who are price-conscious and interested in sustainability. Special collections (e.g., Forever Young 88
and Guardian of Life by Chow Tai Fook) also targeted younger audiences and the solitaire market.

In India, diamond jewelry sales rose 16% in 2021, following a 25% drop in 2020. Sales stayed 13%
below 2019 levels, though. Competing dynamics defined the diamond jewelry demand in 2021.
Lockdowns in the first half of 2021 and a reduced flow of travelers from Gulf countries restrained
India’s recovery. In the second half of 2021, the vaccination rollout reinvigorated consumer
confidence. A 57% increase in weddings released pent-up demand for bridal jewelry. At the same
time, festive jewelry suffered as two-thirds of major festival celebrations were canceled during
lockdowns. Sales at mom-and-pop shops sharply declined due to customers’ expectations for
heightened safety measures and hallmarking compliance. National and regional organized retailers
took the opportunity to expand into Tier-3 and Tier-4 cities, driving overall diamond retail.

In Europe, diamond jewelry retail only partially recovered in 2021. It grew 18% but did not reach
pre-pandemic levels, remaining 5% below 2019 retail sales. In the first half of 2021, easing Covid-
19 restrictions supported the recovery. Europe’s consumer confidence index grew 25%, indicating
households’ intentions to make major purchases. However, a new wave of lockdowns for
unvaccinated people during the third quarter slowed the recovery, exacerbated by uneven
vaccination rates (30% to 84%) across European countries. Reduced international tourism,
especially from China, also affected the recovery.

In the short term, downstream performance will depend on further economic growth perspectives
and industry-specific factors, such as rebound of wedding celebrations with the ease of pandemic
restrictions. New Year’s, Valentine’s Day, and Chinese New Year sales, as well as government
responses to new waves of Covid-19, will set the tone for 2022.
 
5. Midterm forecast
The diamond market is expected to be strong through the first half of 2022, supporting growth
across all segments. Two possible scenarios then emerge: “continued rebound” and “short-term
readjustment.”

In the continued rebound scenario, the expectation is for the US and China to continue sustained
growth momentum while other regions return to pre-pandemic levels, all supported by successful
vaccination programs, limited lockdowns, and resumption of inter-regional travel. In this scenario,
diamond jewelry sales are expected to continue to flourish, creating strong demand for polished
stones. Continued growth in demand and limited supply of rough diamonds will benefit both miners
and midstream players, supporting further strong price growth for polished and rough diamonds.
Supply growth from the pre-owned jewelry market is also limited at least in the midterm: the initial
retail mark-ups and pawnshops’ discounts should be offset by a sharp diamond price increase and
trusted valuation mechanisms should be established in order to induce a significant supply of
recycled diamonds.

The short-term readjustment scenario implies a possible slight correction in diamond jewelry
demand starting toward the end of 2022 and the beginning of 2023, with a gradual return to pre-
pandemic trend levels and growth rates in 2024—similar to how the diamond market strongly
rebounded and then readjusted to its historic trajectory during past recessions.

The most likely scenario is closer to a “continued growth across all segments” outcome since the
industry is in a much better financial position than it was during previous recessions. Inventory
levels of diamond jewelry and polished and rough diamonds are also among the lowest and
healthiest the industry has seen in the past decade.

Longer-term market trajectories will be shaped by traditional industry factors: affordability,

desirability, value chain efficiency, and the buying experience. Diamond affordability relies heavily
on the pace of economic growth and consumers’ disposable incomes. Desirability is reflected by the
share of diamond jewelry sales within total jewelry and luxury consumption as well as cultural
acceptance of diamond jewelry gifting. To achieve efficiency, the industry needs smooth inventory
transition processes and price parity that allows all players along the value chain to earn sustainable
profits that can be reinvested in marketing support and growth. The buying experience is shaped by
access to diamond jewelry and omnichannel development.

CEOs of businesses across the value chain are tackling an array of potential actions to position their
businesses for long-term success. Diamond mining companies are investing in parcel consistency
and technologies to enable efficient and effective online sales experiences in case of repeated
disruptions in logistics. To address the growing desire for social impact, especially among younger
consumers, mining companies are investing in various aspects of environmental and social issues,
including traceability, transparency, and carbon neutrality.

Midstream players are focused on efficiency, reviewing their business models to facilitate
flexibility, introducing demand management practices, rightsourcing, and direct-to-customer sales
channels. Consolidation and automation efforts are also on the agenda. Diamond jewelry retailers
are seizing the momentum to rethink gifting occasions and the role of diamond jewelry. From
functional and sensory to aesthetic and emotional appeal, marketing needs to harness more of the
inspirational, self-actualization, and motivational elements of the value proposition for diamond
jewelry. Another important aspect of creating a winning value proposition for consumers lies in
enhancing the overall customer experience—from researching to buying to owning diamond
jewelry—through product innovation, storytelling, and “wow” omnichannel engagement.
In addition to individual company and brand actions, a coordinated and purposeful investment in
diamond marketing is required for sustained long-term growth. Cross-value chain marketing efforts
remain limited but are expected to grow. The Natural Diamond Council’s 2022 budget is expected
to increase 33% (from about $80 million in 2021) following program expansion and the addition of
new members. The drive to improve and expand diamond marketing has to continue as marketing
investment in luxury products increases and becomes more creative. Diamond jewelry needs to
keep pace to stay relevant and exciting for the next generation of consumers.
 
IMPACT ON SURAT DIAMOND INDUSTRY AFTER COVID 19
 
Even as several migrant workers have left Gujarat's Surat city due to the COVID-19 surge and
anticipation of a lockdown, people associated with the diamond industry claimed the current
scenario has had no impact on the trade so far.
According to the Surat Diamond Association, at least 5 lakh workers are employed by 3,000 small
and large diamond cutting and polishing units in Surat city.
Majority of workers have migrated here from Saurashtra and north Gujarat, while only 10 per cent
are from Uttar Pradesh, Madhya Pradesh and Bihar, said Nanu Vekaria, president, Surat Diamond
Association.
Of these 5 lakh workers, hardly five per cent had recently left for their hometowns in and outside
Gujarat, he said.
"While some went back to attend weddings and other social gatherings, others left out of fear. Some
even left for their hometowns to care for their ailing parents and relatives," Vekaria said.
"Majority of the diamond polishing units are operational at present. A marginal number of workers
have left, but they will return once the situation improves. So far, the diamond industry remains
largely unaffected because of coronavirus," he said.
The total turnover of Surat's diamond industry is Rs 1,45,000 crore, said Dinesh Navadiya, regional
chairman of the Gems and Jewellery Export Promotion Council (GJEPC).
Navadiya too concurred that the industry remains unaffected, as very few workers have left the city
despite a sharp rise in the coronavirus cases in the recent days.
"Those who are leaving will return as soon as the situation becomes normal. However, the number
is less. Almost all units are working at present. So far, there seems to be no major impact on the
diamond trade due to coronavirus," he said.

A STUDY ON “FACTORS AFFECTING CONSUMER’S BUYING BEHAVIOR IN

DIAMOND INDUSTRY” IN SURAT DISTRICT

WHAT IS CONSUMER BUYING BEHAVIOR ?

Consumer Buying Behavior refers to the actions taken (both on and offline) by consumers before
buying a product or service. This process may include consulting search engines, engaging with
social media posts, or a variety of other actions. It is valuable for businesses to understand this
process because it helps businesses better tailor their marketing initiatives to the marketing efforts
that have successfully influenced consumers to buy in the past.
We have all experienced the moment when we walk into a store and see something that we just
have to have. Retailers spend billions of dollars every year trying to generate that feeling in their
customers. Web campaigns, video and print ads, social media campaigns, and branding seem to
converge as the consumer finally feels a connection to a product and makes a purchase. 

 
 
WHAT ARE THE MAJOR FACTORS THAT INFLUENCE CONSUMER BUYER BEHAVIOR?
A variety of factors go into the consumer buyer behavior process, but here we offer just a few.
Taken separately, they may not result in a purchase. When put together in any number of
combinations, the likelihood increases that someone will connect with a brand and make a purchase.
Four factors influencing consumer buying behavior are:

 Cultural Factors - Culture is not always defined by a person's nationality. It can also be
defined by their associations, their religious beliefs or even their location.
 Social Factors - Elements in a person's environment that impact the way they see products.
 Personal Factors - These may include someone's age, marital status, budget, personal
beliefs, values, and morals. 
 Psychological Factors - A person's state of mind when they are approached with a product
will often determine how they feel not only about the item itself but the brand as a whole. 

WHAT ARE THE FOUR TYPES OF BUYERS?

1. The Analytical Buyer - Motivated by logic and information, this buyer will look at all the data on
competing brands and products before making an informed decision.
2. The Amiable Buyer - Warm and friendly, this buyer just wants everyone to be happy. That is
why they are often paralyzed by big decisions when there is the perception of a win/lose outcome. 
3. The Driver Buyer - Drivers are most concerned with how others view them and whether they
follow. The trendsetters, Drivers are most concerned with their appearance rather than the
relationships that are formed during a transaction.
4. The Expressive Buyer - Relationships are key to the Expressive Buyer. They cannot stand feeling
isolated or ignored during a transaction. Instead, they want to feel like your most important asset.
STAGES OF CONSUMER BUYING PROCESS
Six Stages to the Consumer Buying Decision Process (For complex decisions). Actual purchasing is
only one stage of the process. Not all decision processes lead to a purchase. All consumer decisions
do not always include all 6 stages, determined by the degree of complexity.
The 6 stages are:
1. Problem Recognition(awareness of need)--difference between the desired state and the
actual condition. Deficit in assortment of products. Hunger--Food. Hunger stimulates your
need to eat.
Can be stimulated by the marketer through product information--did not know you were
deficient? I.ESeeing a commercial for a new pair of shoes stimulates your recognition that
you need a new pair of shoes.
2. Information search--
o Internal search, memory.
o External search if you need more information. Friends and relatives (word of mouth).
Marketer dominated sources; comparison shopping; public sources etc.
3. A successful information search leaves a buyer with possible alternatives, the evoked set.
Hungry, want to go out and eat, evoked set is
o chinese food
o indian food
o burger king
o klondike kates etc
4. Evaluation of Alternatives--need to establish criteria for evaluation, features the buyer wants
or does not want. Rank/weight alternatives or resume search. May decide that you want to
eat something spicy, Indian gets the highest rank etc.
If not satisfied with your choice then return to the search phase. Can you think of another
restaurant? Look in the yellow pages etc. Information from different sources may be treated
differently. Marketers try to influence by "framing" alternatives.
5. Purchase decision--Choose buying alternative, includes product, package, store, method of
purchase etc.
6. Purchase--May differ from decision, time lapse between 4 & 5, product availability.
7. Post-Purchase Evaluation--outcome: Satisfaction or Dissatisfaction. 

Cognitive Dissonance, have you made the right decision. This can be reduced by warranties,
after sales communication etc.
After eating an Indian meal, you may think that you really wanted a Chinese meal instead.
 LITERATURE
REVIEW

According to Michael R. Solomon and Nancy J. Robolt, Published by Dorling Kindersley

( India ) Pvt. Ltd, 2004, Pg No. 46 :
Consumer Behaviour is the study of the processes which are involved when individuals or groups
select, purchase, use and dispose of products, services, ideas, or experiences to satisfy needs and
desires.

Fashion tends to be adopted by many people simut concurrently in a process known as

collective selection. Perspectives on motivations for adopting new styles include psychological,
economic, and sociological models of fashion.

The field of consumer behaviour is multifaceted; it is composed of researchers from many

different fields who share an interest in how people interact with the marketplace. These
disciplines are categorized by the degree to which their focus is micro versus macro.

According to Leon G. Schiffman and Leslie Lazar kanuk, published by Dorling Kindersley (
India ) Pvt. Ltd, 2007, Pg No: 37
The study of consumer behaviour enables marketers to understand and predict consumer
behaviour in the marketplace; it is considered concerned with not only what consumers buy
but also with why, when, where, how and how often they buy it.

Consumers behaviour has become an integral part of strategic market planning. The belief that
ethics and social responsibility should also be integral components of every marketing decision is
embodied in a revised marketing concept - the societal marketing concept - that calls on
marketers to fulfil the needs of their target markets in ways that improve society as a whole.

According to John C. Mowen and Michael Minor, published by Prentice - Hall, 1998, Pg No.
22: fifth edition :
Consumers behaviour principles are useful to business managers, govt. regulations, non-profit
organization as well as to ordinary people.

The knowledge of consumers behaviour has implications for environmental analysis, products
positioning the segmentation of marketplace, the designing of marketing research and the
development of marketing mix. This knowledge is required for marketing managers.

An emerging area of study in consumer behaviour is ethics normative judgments concerning what
is morally right and wrong, good and bad.

Three research perspectives on consumers acquisition behaviour were identified: 1- The decision
making perspective

2- The experimental perspective

3- The behavioural influence perspective

 According to Roger D. Blackwell, Paul W. Miniard and James E. Engel, published by
Cengage Learning, 2006, Pg No. 22 :
Consumer behaviour is defined as activities people undertake when obtaining, consuming and
disposing of products and services. Businesses around the world recognize that " the consumer is
king ". Knowing different consumption patterns of the products helps the marketers improve
existing products and how to attack consumers to buy their products. Consumers behaviour
analysis helps firms to know how to " Please the king " and directly impact bottom line profits.
Consumer behaviour studies consumers as sources of influence on organisations. Today, the most
successful organisations are described as a customer-centric, which means they attempt to focus
everyone in the organisation on satisfying customers, by allowing consumers to influence the
organisation to have the products, pieces, promotions, and operations consumers will buy,
customer-centric organisations delight customers, create brand loyalty and increase revenues and
profits.

According to David L. Loudan and Albert J. Della Bitta, published by Jata McGraw Hill
Education Pvt, Ltd, 2002, Pg. No. 26 :
To view consumer behaviour as the decision process and physical activity of individuals
purchasing for the purpose of individuals or household consumptions. Therefore, we recognize
that in certain situations consumers will purchase products and services for use by other
individuals. Also, we must realize that other individuals have a greater influence on the
consumer's decision-making process.
Most attention is focused on the applied nature of the discipline of consumer behaviour. The
relevance of consumers behaviour to a variety of practical applications, including marketing
management social marketing, government decision making, decision marketing and consumer
education.

According to Del I. Hawkins, Roger J. Best, Keneth A. Coney, Amit Mookerjee.

Published by Tata McGraw Hill Education Pvt. Ltd, 2007.
The view of consumer behaviour is broader than the traditional one, which focused
much more on the buyer and the immediate antecedents and consequences of the
purchasing process. This view will lead us to examine the indirect influence on
consumption decision as well as consequences that involve more than the purchase and
seller. Knowledge of consumers behaviour is critical for influencing not only product
purchase decisions but decisions about which college to attend, which charities to
support, how much recycling to do or whether to seek help for an addiction or
behaviour problem.

It is important to note that all marketing decisions and regulations are based on assumptions about
consumer behaviour.
According to Henry Assael, published by Thompson Asia Pvt. Ltd, 1998.
A historical perspective shows that a consumer orientation developed out of economic
necessity in 1950' s, with the advent of a buyer's market, marketing managers began to
identify consumer needs in a competitive environment and to gear marketing strategies
accordingly. A better understanding of consumer needs, perceptions, attitude and
intentions became necessary.

There are 2 approaches been focused i.e A managerial approach tends to emphasize
individual consumers, their thought processes, and the impact of the environment on their
needs and attitudes.
A holistic approach tends to stress consumer experience - primarily consumption rather
than purchase behaviour and the general context of consumer's environment. One following
a holistic approach tends to view consumer behaviour as a field of study in and of itself
without necessarily deriving managerial and strategic implications.

According to Suja R. Nair, published by Himalaya Publishing House, 1999, Pg. No.
Since the consumer is one who will whether or not to buy a particular product, marketers have
to understand the role of the consumer in the market and work out marketing programmer
accordingly. Consumer behaviour is defined as all psychological, social and physical
behaviour of all potential consumer as they become aware of, evaluate, purchase, consume and
tell others about products and services.

Consumer behaviour can be understood better by viewing it with its interdisciplinary dimensions.
Consumer behaviour study is said to be the melding of all those bodies of knowledge concerned
with human behaviour- behavioural sciences. The scientific disciplines which have a learning on
the consumer behaviour are economics psychology, sociology, socio-psychology and cultural
anthropology.

According to by Ramanuj Majumdar, published by PH1 learning Pvt. Ltd, 2010.

Around the world, marketers talk about the concept of consumer psycho behaviour. They
buy to figure out the consumer psycho and, in the process, they make every effort to
understand how the consumer thinks and behaves at pre-purchase and during or making any
purchases; finally, they try to retain the consumer. So what exactly is the elusive psycho of
the consumer which is so difficult to grasp? When you study consumer behaviour, you
realize the challenges faced by marketers in comprehending the consumer mind.

Consumer behaviour reflects the totality of a consumer's decisions and the dynamic process
which is been influenced by multiple factors.
According to by Dr Sachin K. Sharma, published by Horizon Press, 2014.
Consumer behaviour blends elements form psychological, socially, social anthropology and
economics. It attempts to understand the decision making processes of buyers, both individually
and in groups.

Knowledge of consumer behaviour is relatively envoy to acquire through observation, descriptive

research, or experiment. Regardless of how much one knows about consumer behaviour in a
particular market or in relation to same product or service, this info. is likely to be an inadequate
basis for planning the marketing action.

Marketing organizations are interested not only in the forces that motivate the consumer buyer,
who is often the housewife but also in motivating other consumers who influence buying by
expressions of their wants within the, published by AVA Publishing SA, 2009, Pg. No.

- Consumer behaviour examines how individuals acquire, use and dispose of company
offerings. Goods and services can be acquired through purchase, but they can also be obtained
through barter leasing or borrowing. After consumers acquire on an item, they then use it in the
same manner. Usage could also influence the behaviour of others.

If a product performs well then satisfied consumers can encourage others to adopt through
positive viewers; on the other hand, dissatisfied consumers can complain and encourage
behaviour ranging from non-purchase of a product to boycotting a company's entire product line.
Lastly, consumer behaviour includes what occurs after a product is used. Consumers who are
concerned about the environment identify with these companies and are more likely to purchase
their products and services.

According to Himanshu Pant, published by ABD Publishers.

The study of consumers helps firms and organisations to improve their marketing strategies
by understanding issues such as; the psychology of how consumers think, feel, reason, and
select between different alternatives, how the consumer is influenced by his or her
environment. The behaviour of consumers while shopping or making other marketing
decisions. Consumer behaviour involves the use of products as well as how they are
purchased. Product use is often of great interest to the marketer, because this may influence
how a products s best positioned or how we can encourage increased consumption.
Consumer behaviour involves services and ideas as well as tangible products. The impact of
consumer behaviour on the society is also of relevance.
According to C.N Krishna Naik, L.Venugopal Reddy, published NY Discovery
Publishing House, 1999.
Advertising, product promotions and the introduction of new products are cited as a
phenomenon that may cause shifts in consumer preferences. In general, saying that
urban consumers are well aware of the latest market trends value to the availability of
fast information and accessibility to consumer market nearby. Whereas rural consumers
are branched as laggards in the adoption and innovations process of acquiring a new
product, maybe consumer durable or non-durable.

As in well known, the modern theory of consumer behaviour is based on assumption that
consumer allocates expenditures on commodities as if he had a fired, ordered set of preferences
described by their ordinal utility function, subjected to the constraints imposed by the income he
receives and the prices he must pay.

According to Michael R. Solomon, published by PH1 Learning Pvt. Ltd, 2009.

The field of consumer behaviour covers a lot of ground: it is the study of the processes
involved when individuals or groups select, purchase, use or dispose of products,
services, ideas or experiences to satisfy needs and desires. Consumers take many forms,
ranging from an 8-year-old child begging her mother for a webking stuffed animal to an
executive in a large corporation deciding on a multimillion-dollar computer system.

The items eve consume can include anything from canned peas to a massage, democracy,
reggaeton music, or a celebrity such as Lindsay Lohan. Needs and desires to satisfied range
from hunger and thirst to love, status or even spiritual fulfilment.

According to S.A Chunawalla, published by Himalaya Publishing House, 2000.

- To predicts the consumer behaviour is very difficult. Marketers thought if they are able to
predict consumer behaviour, they will be able to influence it. This is a positivist approach to
consumer behaviour. Consumer behaviour was just considered just applied marketing
management. However, drawing from diverse disciplines, consumer behaviour developed into an
inter-disciplinary subject. The area of consumer behaviour is related to marketing concept which
evolved in the late 50's. We have travelled from production - orientation to products
presentation, to marketing orientation.

Thus, it was felt that in-depth study of consumers and their behaviour will be necessary to design
suitable products and marketing mix.
According to Philip Kotler, published by Dorling Kindersley ( India ) Pvt. Ltd, 2009.
Consumers make many buying decisions every day. Most large companies research consumer
buying decisions in great detail to answer questions about what they buy, where they buy, how
and how much they buy, when and why do they buy. Penetrating the dark recesses of the
consumer's mind is no easy task. Often customers themselves don't know exactly what influence
their purchases. 95% of the thought, emotion, and learning occur in the unconscious mind that is,
without our awareness, notes one consumer's behaviour expert.

The marketer wants to understand how the stimuli are changed into responses inside the
consumer's black box.

Marketing by Dr Khushpat S. Jain, Dr Apexa V. Jain and Dr Prashant Bhagat, published

by Himalaya Publishing House, 2015.
The consumer behaviour is defined as the behaviour that consumers displays in
searching, purchasing, using, evaluating and disposing of products and services that they
expect will satisfy their need. Consumer behaviour is determined to a large extent, by
social and psychological factors.
Consumer behaviour may be influenced by both internal and external influence, internal influence
is demographics, psychological ( lifestyle ), personality, motivation, knowledge, attitudes, beliefs
and feelings while external influences are culture, ethnicity, family, social class, reference groups,
and market mix factors. Thus, consumer behaviour consists of both physical and mental activities
of a consumer.

Service Marketing by Valarie A. Leithaml and Mary Jo Bitner, published by Jata McGraw
Hill Publishing Company Ltd, 2003.
The primary objective of service producers and marketers is identical to that of all
marketers; to develop and provide offerings that satisfy consumer needs and expectations,
thereby, ensuring their own economic survival. In other words, service marketers need to
be able to close the customer gap between expectations and perceptions. To achieve this
objective, services providers need to understand how consumers choose and evaluate their
service offerings. Consumers have a more difficult time evaluating and choosing services
than goods, partly because, services are intangible and non-standardized and partly because
of consumption is so closely intertwined with production. Lack of understanding of the
way customers assess and choose services in these five fundamental stages to lead to a
customer gap that must be closed by service marketers
According to David L. Kurtz, published by Cengage Learning, 2012.
Consumer behaviour refers to the buyer behaviour of individual consumers. Consumer
behaviour plays a huge role in marketing decisions, including what goods and services to
offer, to whom, and where. If marketers can understand the factors that influence
consumers, they can develop and offer the right products to those consumers.

Cultural influence, such as the general work ethic or the desire to accumulate wealth, comes from
society. Core values may vary from culture to culture. Group or social influences include social
class, opinion leaders and reference groups with which consumers may want to be affiliated.
Family influence may come from spouses, parents, and grandparents or children.

According to Thomas C. Kinnear and Kenneth L. Bernhardt. published by Scott, Foresman F

Little, Brown higher education, 1990.
Consumer behaviour can be defined as those acts of individuals that involved buying and using
products and services including the decisions processes that precede and determine these acts.
The purchase decision process in the series of stages consumers go through in declining which
products to buy. The five stages are problem recognition, information seeking, evaluation of
alternatives, purchase decision and postpurchase evaluation. Consumers respond to product
offerings in terms of their brand images. The way consumers perceive the benefits of a product is
much more important than the actual product attributes. Consumers generally strive to lower
perceived risk is their purchase decisions processes, either by reducing the percieved probability
of the negative consequences occurring.

Aaker, David and George (1971) in the book

Consumerism: Search for the consumer Interest‟ makes an effort to evaluate influence on the
buyer from their close group such as friends, reference groups, family as well as in general the
society. The general definition of consumer behaviour is that one of the studies a marketer uses to
understand a consumer better and forecast on how their behaviours change when coming to
buying decisions.

According to Schiffmann (1993)

Consumer behaviour is the sum of learned values, customs and beliefs that serve to direct the
members of a specific society.

According to Brian Mullen (2001)

From the book „The Psychology of Consumer Behaviour‟ consumer behaviour is the decision
maker or behaviour of the consumer in the market place of the services and goods. From the
application of psychology, sociology, and demographics, the marketers can begin to understand
why the consumers form attitudes and make decisions to purchase the product. Consumer
behaviour is based on the consumer playing three different roles of buyer, payer and user.

According to Loudon and Della, (1988)

Consumer behaviour reflects totality on decision of consumers with respect to the consumption,
disposition and acquisition of services, products, experiences, activities, ideas and people by units
of decision making. Consumer behaviour entails all activities of consumers linked with the use,
buying and disposal of services and products including the mental, behavioural and emotional
responses of consumers that determine, follow or precede these activities.
According to Peter and Olsen et.al (2005)
from the book „consumer behaviour and marketing strategy‟ consumer behaviour can also be
referred as the physical activity and decision engaged in obtaining, evaluating, disposing or using
of services and goods. Consumer behaviour is often goal oriented and purposeful. Each consumer
is free to make an option with regard to the buying she or he is going to make. Consumer
behaviour is the method which starts with the stimuli a consumer gains from his surroundings and
ends with buying transaction.

Walter and Paul (1970) in the book „Consumer Behaviour:

An Integrated Framework‟ has emphasized consumer behaviour as „the process whereby
individuals decide whether what, when, where, how and from whom to purchase goods or
services.‟ Behaviour at large is a sign of precise mannerism as well as technique. Consequently
consumer behaviour connotes consumer‟s expression or say attitude whilst purchasing the
products. In further terminology consumer behaviour is the outcome of such purchase, at the
same time as a consumer does on behalf of the contentment of his requirements.

According to the Webster(1975)

In his article “Determining the Characteristics of the Socially Conscious Consumer” expressed
that the behaviour of buyer is all psychological, physical and social of potential customers as they
become aware of evaluate purchase consume and tell other people about products and services.”
Kurtz and Boone(2007)29 , in the book “Contemporary marketing‟ describes that consumer
behaviour consists of the acts of individuals obtaining and using goods and services, including the
decision processes that proceed and determine these acts”.

According to Hoyer and Macllnis (2008)

Consumer behaviour reflects the totality of customer‟s decision with respect to consumption,
acquisition and disposition of products, services, tasks, people, ideas and experiences by units of
decision making. Consumer behaviour includes why they purchase, what they purchase, when
they purchase, how often they purchase, where they purchase, influence of such evaluation on
future, how they calculate it after the purchase and how they regulate it. Consumer behaviour
means more than just how an individual purchases products. Therefore the efforts of marketing
focus on the ideas, tasks and services of customers. The manner in which the customers purchase
is extremely important to marketers. It is essential to know how a customer reacts towards varied
product features, advertisements and costs in order to assure powerful competitive benefit.

According to Hawkins, Mothersbaugh and Best, (2007) in the book

Consumer Behaviour, Building Marketing Strategy‟ states that consumer behaviour is also the
study of processes and consumers used to select, dispose and consume services and products. All
decisions of marketing are concerned on consumer behaviour‟s knowledge and assumptions.
Researching consumer behaviour is a critical process, but understanding consumer behaviour is
difficult to marketers and the marketers can use it to: 1) target customers effectively; 2) offers
customer satisfaction and value; 3) expand base of the knowledge in the marketing field; 4) create
competitive benefit; 5) develop services and products; 6) develops company‟s value; 7) applies
strategies of marketing towards positive effect on society i.e. motivate people to support charities,
lower down usage of drugs, enhance healthy habits, etc.; and 8) understand how customers look
their rivalries products versus their products.
According to Hawkins, (2008)
Consumer behaviour is the study of organizations, individuals or groups and the processes they
use to choose, use, dispose and protect services, products, ideas or experiences to satisfy the
influences and requirements that these processes have on the society and customers. This view of
consumer behaviour is wider than the traditional one which focused much more on the purchaser
and the immediate consequences and antecedents of the buying process this view will 57 lead to
investigate indirect impact on consumption consequences as well as determinations that involves
more than the seller and purchaser.

Lake (2009) in his paper „Consumer Behaviour for Dummies

Noted that consumer behaviour describes the study of individuals and the tasks that exists to
satisfy their identified requirements. That satisfaction exists from the processes used in choosing,
protecting and using services or products when the advantages acquired from those processes
meet or exceed customer‟s expectations. In other words when an individual identifies that he has
a requirement the psychological process initiates the decision process of customers. Through this
process the individual sets out to predict ways to fulfill the requirement he has recognized. That
process consists of the individual‟s feelings, behaviour and thoughts. When the process is
finished the customer is faced with the activity of analyzing and digesting entire information
which decides the actions he will take to fulfill the requirement.

Engel et al. (1982)

Projected that, customers with different lifestyles show variation in their consuming attitudes.
Because the lifestyle of people is influenced by culture, social status, reference group and family,
people with different lifestyles have distinct values, personalities and perceptions

Ling, (2004)
The mobile phone is the „epitome of mobility in media‟ as it „allows both reception (like the
book) and production (like the Kodak camera)‟, instantaneously, over long distances, and
interactively. Consequently, our lives have been greatly affected in both positive and negative
ways. Mobile phones are viewed with scorn as an intrusion in society, yet these devices offer us
security, safety, accessibility and other benefits.

Chakraborty (2006)
Is of the view that mobile phones today go beyond just voice communication and provide a
multitude of other features and services including text messaging (SMS), Multimedia Messaging
(MMS), photo display and video playback recording, calendaring, etc.

Sinha (2002)
Discussed the growing competition among the cellular service providers in Delhi and Mumbai
cities as well as defensive strategies taken by the operators to retain the customers. It was
concluded that due to price war among the cellular operators, the ultimate beneficiary was the
cellular customer.
Kathuria (2004)
Reviewed the Indian telecom industry‟s market structure from 1991 with special focus on the
Asia-Pacific region. It was discussed that the Indian telecom sector had grown rapidly over the
last ten years but still lagged behind China and other Asian countries in the context of investment
and tariff rates. The author had further discussed the impact of WTO negotiations on the Indian
telecom industry and suggested the scope of future growth in this sector without changing the
existing regime.

Kim et. al. (2004)

Concluded that service providers must focus on service quality and offer customer-oriented
services to increase the level of customer satisfaction. The authors had also traced certain other
factors such as low cost, and interpersonal relationships affecting the switching barrier. It was
suggested that service providers must increase the switching cost in order to increase the
customer life time value and customer retention.

Sudhakar and Raman(2004)

Discussed the importance of mobile and wireless solutions in today‟s business world as they
enable the sales force to maintain closer contact with the customers. The authors focused on
certain core benefits such as customer information, product information and product availability,
which could be availed with the help of mobile and wireless solutions. They concluded that
mobile and wireless solution as a sales force automation tool represented a two-way flow of
information between the salesman and the database.

Kumar et.al (2006)

Measured the level of satisfaction derived by the Airtel subscribes in Coimbatore city. A sample
of 200 subscribers, using both pre-paid and post-paid schemes of Airtel network had been taken
for the purpose of the study. Chi-square test had been applied to determine the factors influencing
the satisfaction level of respondents. The study revealed that clarity of signals, availability of plan
options, call charges and activation formalities were the factors influencing the satisfaction level
of Airtel subscribers in Coimbatore. The researcher had also given some constructive suggestions
for improving the satisfaction level of customers using Airtel network.

Diamond buying on rise among Indian middle class’ (Times of India, TNN | Dec 12, 2014, 10.53
AM IST)
Diamonds have become best friends of middle class Indian consumers. The 'consumer diamond
purchasing survey' carried out by world's largest diamond mining company De Beers has
concluded that the rate of diamond acquisition among India's middle class consumers has risen
sharply from two per cent in 2002 to nine per cent in 2014.

Executive vice president (marketing) for De Beers Group of companies Stephen Lussier,
While addressing the who's who of global diamond industry at World Diamond Conference
(WDC) hosted by Gems and Jewellery Export Promotion Council (GJEPC) at New Delhi, said,
"After U.S and China, India is the third important diamond consumer market in the world. The
diamond consumption among India's middle class has been significantly higher and that they are
forecast to grow by a compound annual rate of 12 per cent over the next decade."
According to Arushi Thakur,
A lead research analyst for services at Technavio, “The rise in per capita disposable incomes,
increasing number of diamond jewellery retailers, and rising number of consumers accepting the
culture of giving diamond jewellery are some of the factors contributing to the rise in demand in
countries like India, China, and Japan.”

According to Haley (1968)

is of the view that customer satisfaction reflects their perception of benefit, and hence
segmentation based on benefit is ideal. Therefore, we can segment customers by their degree of
satisfaction.
Arslan Vural Julin, Jsigicok Erkan and Sezer Senkal Filiz, ( 2010 ), "Magnetism of shopping
malls on young Turkish consumers". Yong Consumers: Insight and ideas for responsible
marketers, Vol 11, Issue 3, Pages 178-188:

Studied the reasons behind the attractiveness of shopping malls for young consumers in Turkey.
They carried out their study in few selected malls in Buroa, Turkey. They surveyed 621 young
consumers aged between 12-24 years.
The researchers found that five malls attractiveness factors according to the young Turkish
consumers perceptive were a retail environment, leisure conditions, socializing in a secure
environment, accessibility and leisure.

Banerjee Mohua and Dasgupta Rajib, ( 2010 ), "Changing pattern of consumer behaviour in
Kolkata with the advent of large format retail outlets". The IUP Journal of Marketing
Managment, Vol 9, No. 4, Pages 57-80:
They tried to examine the changing preferences of the consumers in Kolkata. The basic
objective of their study is to analyze the perceptual change in consumer frame of mind
regarding the gradual acceptance of organized modern retail formats, i.e shopping malls. The
study conducted over the period July 2004-March 2007. July discovered that the mall culture
has gained acceptance and consumers are frequently visiting the malls like the Gariahaat Mall,
Inox etc. Thus it can be opined from their research study that the "mall culture" has brought
about dramatic changes in the lifestyle of Kolkata consumers. Nowadays people are changing
their consumption habits and leisure activities to lay the foundations for the organized retail
industry.
Prakash Chandra Dash and Swaroop Chandra Sahoo, ( 2010 ), " Consumers Decision making
styles in Shopping malls- An Empirical Study in the Indian Context" Indian Journal of
Marketing, Vol 40, No.8, Pages 25-50:
They tried to investigate the consumer decision-making styles in shopping malls and also
ascertain the variations in the consumer decisions making styles across diff. demographic
variable. The decision making styles that they discovered were price consciousness, quality
consciousness, recreational, confused by over choice, novelty consciousness, and variety
seeking.

The study did not confirm four dimensions-fashion consciousness, brand consciousness,
impulsiveness. They found in their study that single customers are more price conscious than
married ones; Indian consumers were recreational in their shopping. They recommended with the
help of their study that understanding of Indian mall shopping behaviour, with particular
reference to their decision-making styles, are crucial.

Rajagopal, (2000), "Growing shopping malls and behaviour of Urban shoppers', Journal of Retail
and leisure property, Vol 8, No. 2, Pages 99-118:
They studied the impact of growing congestion of shopping malls in urban areas of Mexico on
shopping convenience and shopping behaviour with regards to personality traits of shoppers
affecting the preference for shopping mall concerning store assortment, convenience, distance to
malls, economic advantage and leisure facilities. The result of the study revealed that the
ambience, sales promotions and comparative economic gains in the malls attract higher customer
traffic to the malls.

It was found in the study, that urban shoppers visit shopping malls as a leisure centre to relax and
spending long hours.

Kavita Kanabar, 4 (Apirl 2012,), " Change in consumer behaviour in India with an
introduction to the mall, Volume 2:
The shopping mall concept is a big hit with the sole purpose to provide everything under
one roof. It also heralded in a new urbanization concept where everything was taken to the
consumer in his consort zone, suburbia. Consumers state that malls, supermarkets and
hypermarkets are well organized and that there are no quality issues. The range of choices
and value-for-money deals make them happy, the ambience is good,