In 2019, the diamond industry experienced a market situation where supply greatly exceeded demand. This led to a continuous plummeting of diamond prices. Miners, traders, jewelers, and investors all traded at significant losses.
At that time also, certain underlying issues did not serve to help the market situation in the industry. For example, there was a wave of diamond companies attempting to prove genuineness to their customers through seeking certifications for their diamonds and other traceability routes. There was also the rumor about certain diamond companies secretly opting for synthetic production of diamonds, with numerous debates on whether such was acceptable and eco-friendly or not.
It was also during this time that most companies began to seek digital channels for sales of their diamonds. A transaction that had always been done hand-to-hand for centuries was now to be seen actively on e-commerce platforms and affiliate marketing sites.
While all these were still ravaging, COVID-19, a global pandemic plunged almost all of the world’s trade into crisis. The diamond industry was not left out. From late 2019 to almost the end of 2020, diamond trade was almost on the low with many companies and countries barely hitting half of their usual annual revenue range.
A New Opportunity Arises
This year, however, as a new decade begins, there have been noticeable improvements in diamond trade worldwide. At the same time, most of the issues of concern that contributed to the dwindling of sales in the immediate one or two years seem to have mellowed or naturally rectified themselves. As a matter of fact, the online option appears to be the most plausible description for the happenings that took place in the diamond industry next after the pandemic.
By way of adaptation, the responses to the situational challenges in diamond trade changed. It became a matter of evolution and those who refused to see the need to evolve stood at the risk of thinning into space.
The concept of digitalization of diamond trade for example was no longer a thing to be questioned. How else would traders and companies have been able to make the sales they made when the pandemic inflicted an almost global lockdown? Buying and selling diamonds online became a necessity and the adjustment was largely smooth.
Trade fairs and auctions became discounted sales on e-commerce websites. Conferences and seminars on diamond-related issues became zoom meetings and webinars. The concept of globalization became more realistic and miners, traders, jewelers, as well as buyers discovered a means of transacting faster and easier.
With most diamond miners incapable of working due to the stay-at-home rule, synthetic production of diamonds began to seem a less harmful adventure. In fact, it became one of the ways to maintain supply to the global market irrespective of certain disasters and unfavorable circumstances. Scientists, jewelers, and traders all began to exhibit a balanced view towards synthetic diamonds staying or not. The advantages and disadvantages were juxtaposed against that of natural mining and it will appear that both processes will have to remain and continue hand in hand in the industry.
As measures to curb the pandemic proved successful and normalcy restored over time. The adjustments in the diamond industry became more evident. The changes naturally became implemented into diamond trade and the results have been positive and sporadic. In less than a year, the industry has recovered a significant portion of was it lost in 2019 and part of 2020.
Some Barriers to Overcome
The improvement was also noticeably flared by accumulated market tension on the part of buyers of diamond freaks. These persons have had reasons to not patronize the industry for a long time. The pandemic and inability to have ‘diamond flaunting outings’ was a major one. But even before then, there was the distrust and skeptical feeling buyers had towards diamonds. This was mainly due to transparency and credibility issues.
Most buyers could not rightly decide if a diamond in a jewelry shop was synthetic or not, and what implications, if there are, synthetic diamonds had on the environment. At other times some buyers had no way of determining if a diamond was actually 4 carats as told them by the seller and not 2.5 carats. As these issues naturally rectified themselves during the lockdown, buyers became more willing, and in no time, sales exceeded production.
It will be myopic to say that the diamond trade in this current time will not experience its own challenges; shortage in demand, ingenuity, irregular exchange rates, and so on are all examples of issues that will step up in the current circumstances.
Also, like every other occurrence where evolution takes place, extinction occurs hand in hand. With the recent development in the diamond industry, there have been fears that the natural mining of diamonds and physical transactions may soon become wiped out. This may be to the detriment of those who have depended solely on these platforms to thrive in diamond trade.
The Change in the Diamond Industry is Here to Stay
This is the current state of global diamond trade and it is expected to remain so, or better still, improve as this decade rolls by. Like after a long rest, rejuvenation is sure and there’s energy to become busier. All concerned persons in the diamond industry are putting in all their best to bring back the lost glory and even the buyers are not left out. From recent statistics and reports, there has been more demand for polished diamonds than ever since the last three years. It is indeed a strong comeback!
However, researchers and marketers have estimated that the change will be progressive and not spontaneous, granting opportunity for hand-to-hand diamond traders to improve in their businesses and incorporate digital technology. Diamond mining on the other hand may never be wiped out due to preferential sentiments certain buyers will always have for natural diamonds.
Generally, the diamond industry can be said to be in a healthier position than it was in the decade before. Sales have improved; there appears to be a knowing balance in the trade of synthetic and natural diamonds; credibility is better accessed; and diamond sales have now become friends with the digital space.
In the words of an enthusiast for the diamond industry:
“For the next few years, the only challenge diamond trade may have to face is that of inadequate supply. Never that of demand, and never that of sales platforms.”