China’s Renewed Spark: How Rising Demand Is Reviving Natural Diamond Exports
After years of decline, new retail strategies and shifting consumer sentiment in China are fueling hopes for a rebound in the global diamond trade.
Introduction: From Gloom to Glimmer
The global diamond industry has weathered a challenging period, marked by pandemic disruptions, shifting consumer preferences, and economic headwinds. Nowhere has this been felt more acutely than in India, the world’s leading exporter of cut and polished diamonds, where exports to China have halved over the past three years. Nevertheless, 2025 appears to be emerging as a pivotal year. A confluence of new retail tactics and changing consumer sentiment in China is breathing new life into the diamond trade, suggesting a long-awaited revival may be underway.
The Downturn: What Went Wrong?
Between 2021 and 2024, India’s diamond exports to China saw a sharp decline, dropping from more than $6.5 billion to merely $3.3 billion. Several factors contributed to this decline:
• Changing Preferences: Chinese consumers increasingly favored gold over diamonds, drawn by gold’s perceived value and security during uncertain times.
• Economic Slowdown: The Chinese economy’s post-pandemic recovery was slower than anticipated, dampening discretionary spending on luxury goods.
• Health Concerns: The emergence of new viruses, such as HMPV, added fresh uncertainty, further curbing consumer confidence and retail activity.
This combination led to a surplus of unsold inventory, falling prices, and a cautious outlook among exporters and traders.
Signs of Recovery: What’s Changing in 2025?
1. Innovative Retail Strategies
The most significant catalyst for renewed demand is the introduction of diamond buyback schemes by major Chinese jewelry retailers, including Chow Tai Fook and Chow Sang Sang. These programs allow customers to return their diamond purchases for a guaranteed value, reducing perceived risk and making diamonds a more attractive investment. The response has been swift: retailers report a surge in inquiries and foot traffic, especially among younger buyers.
2. Shift in Consumer Sentiment
After years of prioritizing gold, Chinese shoppers are showing renewed curiosity about diamonds—particularly smaller stones and accent pieces set in gold jewelry. This trend was evident at recent Hong Kong trade shows, where demand for smaller diamonds stabilized and even began to rise. Industry analysts point out that diamonds are once again capturing attention as symbols of prestige and romance, particularly among urban millennials and Gen Z buyers.
3. Stabilizing Prices and Inventory
The glut of unsold diamonds that plagued the market in recent years is easing. Prices have begun to stabilize, and inventory levels are returning to healthier norms. This has boosted confidence among traders and exporters, who are cautiously optimistic about sustained recovery.
India’s Diamond Industry: Ready for a Comeback
India, which polishes and exports more than 90% of the world’s diamonds, stands to benefit the most from China’s reawakening demand. The Gem and Jewellery Export Promotion Council (GJEPC) reports that while exports remain below their pre-pandemic highs, the pace of decline has slowed, and inquiries from Chinese buyers are on the rise.
Industry leaders expect the real impact to be felt from September 2025 onward, as the buyback schemes gain traction and consumer sentiment continues to improve. The upcoming wedding and festival seasons in China are also expected to drive a fresh wave of purchases.
Challenges Remain: Proceeding With Caution
While the outlook is brighter, several challenges could temper the pace of recovery:
• Global Competition: Other diamond-producing countries are also targeting the Chinese market, intensifying competition.
• Economic Uncertainty: Lingering concerns about China’s economic growth and potential new health crises could still affect consumer confidence.
• Changing Tastes: The long-term trend toward smaller stones and diamond accents may limit the recovery in high-value, large-stone exports.
Nonetheless, the consensus is that the worst is over, and a gradual, sustainable rebound is underway.
The Global Picture: Ripple Effects Beyond China
China’s renewed interest in diamonds is already having ripple effects across the global supply chain. Exporters in Belgium, Israel, and Africa are watching the Chinese market closely, hoping for a broader lift in demand. Meanwhile, the stabilization in prices is encouraging miners and traders worldwide to ramp up production and marketing efforts.
Conclusion: A New Chapter for Diamonds
After a prolonged downturn, the diamond industry is finally seeing reasons for optimism. China’s evolving retail landscape, innovative buyback schemes, and a shift in consumer sentiment are laying the groundwork for a revival in natural diamond exports. While challenges remain, the industry’s resilience and adaptability are on full display. As the world’s second-largest diamond market reignites its passion for these precious stones, exporters—especially in India—are preparing for a brighter, more sparkling future.
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The image added is for representation purposes only
