The Spring Festival atmosphere in the mall has not yet dispersed, lanterns, balloons and other decorations can be seen everywhere. On February 14, a reporter from China Securities News found in a large shopping mall in Chengdu that in the jewelry sales area, the Spring Festival preferential activities of major brands are still continuing, and the display counters of diamond jewelry are very popular.

In recent years, diamond jewelry has been highly sought after by consumers for its high color value. Compared with natural diamonds, the cultivation of diamonds relying on ultra-high cost performance is gradually becoming a new favorite of consumers. Industry insiders said that in the context of the decrease in the supply of natural diamonds and the unabated consumer demand for diamond jewelry, as a substitute for natural diamonds, the diamond industry has been cultivated to enter a rapid development channel.

● Our reporter Kang Xi

Consumer demand for diamonds picks up

During the Spring Festival, the major jewelry brands in the mall have launched preferential activities and continue to this day. A salesperson at Chow Tai Seng's store told China Securities Journal: "At present, the company's diamond series products are all 20% off. In recent years, there have been a lot of people buying diamond jewelry, especially on Valentine's Day and when getting married, not only girls like it, but also boys wear diamond rings."

I Do brand related personnel told the China Securities Journal reporter: "2021 diamond industry showed a clear recovery, strong retail demand, especially in the second half of the year is more obvious. In 2021, the total retail sales of domestic diamond jewelry increased by 19% compared with 2020, an increase of 6% compared with 2019. From the retail market performance, the industry has gradually recovered from the impact of the epidemic, and returned to the upward channel."

Since 2021, natural diamond miners ALROSA, De Beers, Rio Tinto and Petra Diamonds have coincidentally raised prices for rough diamonds. Soochow Securities said that in 2021, the global diamond demand-side consumption recovery is obvious, especially in China and the United States two major consumer countries, mining supply, although there is a certain recovery but far lower than the demand-side growth, supply exceeds demand has brought upstream price increases.

Looking ahead, Soochow Securities believes that global diamond consumption will continue to grow in the first half of 2022. Among them, China and the United States will maintain a high business climate, other countries or gradually return to pre-epidemic levels, the neutral case is expected to 2022 industry-wide end retail sales growth rate of 4%-5%. The high consumption of natural diamonds will stimulate the vigorous development of the diamond industry.

Cultivate diamond price advantage is obvious

In the case of high prices of natural diamonds, cultivated diamonds began to enter the consumer's vision. Li Yan (pseudonym), a consumer who bought cultivated diamond jewelry, told a reporter from China Securities News: "During the'Double Eleven' period in 2021, I bought a necklace of cultivated diamonds, a 30-point diamond, and various preferential activities It is around 1300 yuan, and the price is much cheaper than natural diamonds. There seems to be no difference between the two."

Cultivated diamond (synthetic diamond) is an artificial simulation of natural diamond crystallization conditions and growth environment using scientific methods to synthesize diamond crystals. From the product attributes, cultivated diamonds and natural diamonds are pure carbon crystals, with exactly the same physical, chemical and optical properties. Both cultivated diamonds and natural mineral diamonds belong to real diamonds, which are essentially different from the imitation diamonds of moissanite (moissanite) and rhinestones (cubic zirconia).

On a shopping website, the small white flagship store, which focuses on cultivating diamonds, claims to sell only 2% of the world's high-quality cultivated diamonds. The price of a 1 karat diamond ring is around 40000 yuan.

According to the data of China Economic Intelligence Network, the price of cultivated diamonds is anchored by natural diamonds and is the equilibrium result of multi-party games among consumers, brands and channels. The larger the carat number, the higher the clarity, and the better the color, the better the price of cultivated diamonds. The terminal retail price of cultivated diamonds is basically stable at 1/3 of that of natural diamonds.

Power Diamond, which was listed on the Growth Enterprise Market on September 24, 2021, stated in its prospectus that the global natural diamond industry has been in the mature stage of the industry after more than 100 years of development. The consumption demands of target customer groups mainly focus on luxury consumption and value. collection. The cultivation of the diamond industry as a rising star in the field of diamond consumption is still in the initial stage of development. Because of its obvious advantages in quality, price, environmental protection, technology and other aspects, consumer demands mainly focus on fashion consumption and daily wear.

Jewelry brands have entered the market.

According to the China Economic Intelligence Network, global natural diamond rough production has been declining year by year since 2018, with global natural diamond production of 0.111 billion carats in 2020, down 28 million carats from 2019 and 20.14 percent year-on-year. Global natural diamond production is expected to rebound to 0.116 billion carats in 2021, up 4.5 per cent year-on-year. In the context of the continuous decline in global rough natural diamond production and the increasing demand for diamond consumption, the diamond industry has entered a fast track of development.

In recent years, international well-known jewelry brands have laid out their own diamond brands. In May 2018, De Beers announced that it would be launching a nurturing diamond sales business through its Lightbox Jewelry brand. In July 2018, Swarovski re-optimized its cultivated diamond brand Diama from the gem department to the luxury department. In December 2019, SIGNET, the largest diamond jewelry retailer in the United States, also announced the sale of cultivated diamond jewelry in its famous brands such as Kay, Jared, Zales and James Allen.

The 2018 Global Diamond Industry Report predicts that with the continuous improvement of social economy and consumer level, the average annual growth rate of global cultivated diamond production will remain at 15%-20%, and the scale of cultivated diamond production will reach 10 million -17 million carats in 2030.

Our country is the world's largest producer of cultivated diamonds. At present, the domestic cultivation of diamond production capacity is mainly concentrated in the Central South Diamond, Yellow River Whirlwind, Yu Diamond, Power Diamond and other enterprises.

Dongguan Securities said that in recent years, the penetration rate of global cultivation of diamonds has increased rapidly. With the continuous improvement of synthetic technology and the improvement of the cognitive acceptance of the younger generation of consumers, the development of the diamond industry will become increasingly mature, and there is huge room for future development. China is the world's largest producer of cultivated diamonds, mainly using HPHT production methods. At present, there are more mature enterprises in the upstream core profit link of cultivating diamonds, the upstream competition pattern is relatively stable, and the downstream brand end has not yet formed a mature listed company. Looking to the future, the domestic cultivation of diamond brand is expected to rise.