The broken diamonds in Zhang Yuqi's mouth become sweet cakes. Qixi's "hot gold and cold diamonds": there are big carat diamond rings in stores and no one cares about marriage | newlyweds | Zhang Yuqi
"Diamonds are timeless, one is forever passed down." In the last century, diamond giant De Beers' marketing advertisement associated diamonds with "eternity", giving them a special meaning that symbolizes love. Once upon a time, wearing a "pigeon egg" diamond ring became a beautiful aspiration for countless brides.
But with the gold fever, combined with multiple factors such as artificially cultivated diamond supplements and low-priced recycling in the secondary market, the expected purchase of diamonds in the market is gradually shrinking. Originally considered a scarce commodity, diamonds have gradually fallen from the high priced altar.
According to CCTV News, citing CNBC, the recently released global rough diamond price index shows that diamond prices have fallen by 6.5% since the beginning of this year, an 18% drop from the historical high in February 2022.
Global diamond prices have fallen for 15 consecutive months
The latest price index released on the official website of the International Diamond Exchange shows that on July 27th, the INDEX diamond index was at 116.5, a decrease of about 26.45% from its peak of 158.39 on March 7, 2022, and has been continuously declining for 15 months until August.
According to a recent report by CCTV News citing CNBC, the latest global rough diamond price index shows that since the beginning of this year, diamond prices have fallen by 6.5%, an 18% drop from the historical high in February 2022.
The phenomenon of continuous decline in the diamond market is also evident in the financial reports released by multiple jewelry brands worldwide this year.
The DR diamond ring, known for being only customizable for a man in his lifetime, is currently facing a decline in sales for its parent company, Dia Group. The company's financial report for the first quarter of 2023 revealed that its performance further declined, achieving a revenue of 705 million yuan, a year-on-year decrease of 42.27%.
In the predicament, not only DR diamond rings, but also well-known jewelry brand Chow Tai Fook's 2023 financial report showed that as of March 31, 2023, Chow Tai Fook's jewelry inlay, platinum, and K-gold jewelry in mainland China's same store sales decreased by 19.2%, and sales decreased by 26.6%. Among them, the proportion of diamond jewelry retail sales decreased by 1.8 percentage points year-on-year.
The performance report released by Liufu Group also shows that as of March 31, 2023, the group's wholesale revenue decreased by 30.0% to HKD 2.152 billion, and brand business revenue decreased by 15.9% to HKD 1.053 billion due to shrinking demand for diamond products.
International jewelers have also lowered their sales expectations for the diamond market. Signet, the largest jewelry retailer in the United States, recently lowered its full year forecast by about 7% and announced plans to close about 150 out of 2800 stores due to the engagement gap.
In addition, Red Star News reporters saw on the official website of the Shanghai Diamond Exchange that its "Diamond Industry Insider" launched on July 28th indicated that due to the continuous slowdown of the global diamond industry, diamond giant De Beers has further lowered prices, and the company's raw stone sales have seen six consecutive declines.
On August 7th this year, the research group of the Shanghai Diamond Price Index released an article titled "The Natural Diamond Market is Under Severe Test", which showed that the overall diamond price in July was still fluctuating in a downward channel, and the price of 0.50 carat specification diamonds continued to experience a "cold winter" period.
At the beginning of this year, the parent company of the well-known diamond ring brand "I Do", Hengxin Xili Industrial Co., Ltd., announced bankruptcy and restructuring to the public. According to the company's public information, in the first half of 2022, Hengxin Xili's operating revenue was 628 million yuan, a year-on-year decrease of 41.99%; The net profit was 7.0444 million yuan, a year-on-year decrease of 88.62%.
"Qixi presents want more gold jewelry"
The Qixi Festival is coming, and many jewelry brand stores are seizing the opportunity to promote diamond sales. Red Star News reporters visited well-known pedestrian streets in some cities and saw that various types of diamond ring discount and promotional advertisements were launched to attract customers, including Zhou Shengsheng, Zhou Dasheng, DR diamond rings, etc.
▲ Qixi Festival promotion signboard in jewelry area of shopping mall
"This year's sales pressure is really greater, and the diamond ring market as a whole is not having a good time." A jewelry brand salesperson told Red Star News that it is a common practice for jewelry brands to use holidays to promote. But in the past two years, the peak diamond sales season, which should have appeared on Valentine's Day and Qixi Day, has hardly become popular in the past.
According to previous news reports, the proportion of diamond jewelry in the entire jewelry category is shrinking in the consumer market. In the United States, the largest consumer of diamonds, diamond jewelry sales in the first half of 2023 decreased by 9.7% compared to the same period last year, far exceeding the 5.9% decline in sales of all categories of jewelry; In China, the market share of diamond jewelry in the entire jewelry category decreased from 14% in 2021 to 11% in 2022.
The salesperson's statement also confirms these data. She said that the sales of diamond jewelry have continued to decline this year, especially: "Not only us, but many other well-known brands are facing such a dismal sales situation." Even if the total price of diamond products drops, it is difficult to please customers. Judging from the 70% discount on the diamond ring launched by the brand, the salesman pointed to a diamond ring with an original price of more than 40000 yuan and said that the purchase price of the diamond ring for Qixi Festival was more than 20000 yuan, which was a big discount.
In addition, other stores have also launched various promotional activities such as full discounts, vouchers, and "fixed prices". A Red Star News reporter saw that a 0.3 carat diamond ring sold at a jewelry store was on sale at a fixed price, which was reduced from the original price of 13990 yuan to 6998 yuan. The remaining diamond rings also offer promotions ranging from 60% to 80% off.
However, even so, more young customers who come to the store will not visit the diamond area, but will inquire about the price of gold nearby. Red Star News reporters found during their visits that even though many jewelry stores have hung promotional signs for diamond ring discounts, compared to customers who choose gold, the consumers received in the diamond area appear much quieter. The salesperson mentioned above stated that currently, sales in jewelry stores are almost driven by gold, and it seems that both young and middle-aged people have a special fondness for gold.
Compared to the diamond market, the gold buying frenzy has real data support. According to data released by the China Gold Association in July, the national gold consumption in the first half of this year was 554.88 tons, an increase of 16.37% compared to the same period in 2022. Among them, 368.26 tons of gold jewelry increased by 14.82% year-on-year; 146.31 tons of gold bars and coins, a year-on-year increase of 30.12%.
"A diamond ring is just a type of jewelry and a prop for marriage, and it doesn't actually hold its value. In contrast, adding gold to a new wedding is more meaningful." A female customer in a jewelry store told Red Star News reporters that she would choose "three gold" for her own wedding and wouldn't buy a diamond ring. "At the wedding, we would buy cheap artificial diamonds instead, and we wouldn't wear the diamond ring on our hands." This female customer believes that gold has more value retention, while diamond rings are consumer goods and luxury goods with higher brand premiums.
Another female interviewee also said that she had told her target that if she wanted to send jewelry on Qixi Festival, she did not expect to receive diamonds, but hoped to get gold jewelry at the same price. The reason is based on the value preservation property of gold.
Small carats and low priced diamonds are favored
"Diamonds weighing less than 1 carat are collectively referred to as broken diamonds, and broken diamonds are often worthless." Famous actress Zhang Yuqi once expressed her views on live streaming platforms, which quickly attracted public attention. But in fact, diamond rings weighing over 1 carat are sold at a high price in the primary market, which makes most consumers hesitate.
"The largest diamond ring in stock in our store is 1 carat, priced at over 100000 yuan." A Red Star News reporter learned from a salesperson at a top jewelry brand store that if you need to purchase a larger diamond ring or have other requirements for diamond clarity, cutting, etc., customization is required to obtain it. As the "treasure of the town", the big carat diamond ring has not received much attention this year, according to the salesperson.
The salesperson mentioned that unlike in the past, more young people are starting to like small carat, low priced but uniquely shaped diamond rings, unlike in the past when consumers would try their best to pursue large carat diamond rings. According to the salesperson, more than half of the diamond sales in her store currently come from diamond rings with a total price of less than 10000 yuan.
In addition, Red Star News reporters also noticed that another diamond ring, which is not significantly different in size and is about 1 carat, has decreased in price by nearly 20000 yuan just because the clarity of the diamond has decreased from VS2 to SI1. The salesperson stated that in reality, it is difficult to distinguish the quality of the two diamond rings under natural light.
Consumers don't seem to buy the large carat diamond ring. A Red Star News reporter noticed that a young consumer in the store chose a 0.09-carat small diamond ring priced at around 4000 yuan. For her, the significance of this ring lies in its decoration rather than its preservation: "It's about buying and wearing it for fun. A big diamond ring holds its value but cannot be bought. If you want to recycle a diamond ring worth over ten thousand yuan, it's better to buy a cheap small diamond ring. Don't worry about whether it holds its value."
The aforementioned article "The Natural Diamond Market is Under Severe Test" indicates that the price of 0.30 carat diamonds rebounded in July. The above salesperson also stated that the most popular diamond ring is usually 0.5 carats, followed by 0.3 carats. A diamond ring that exceeds 1 carat will have a total price of no less than 80000 yuan.
Meanwhile, Red Star News reporters have also seen similar sales phenomena in multiple online flagship stores of jewelry brands. Taking Chow Tai Fook as an example, sales data on its official website shows that low carat diamond rings priced around 3000 yuan often have more than 20 payers, while diamond rings priced over 10000 yuan often have less than 5 payers.
▲ Screenshot of sales situation of Chow Tai Fook
Natural diamonds lose their cost-effectiveness?
The long-lasting natural diamond was once a necessary witness for newlyweds to enter marriage. However, with the emergence of topics such as "14000 yuan for second-hand diamonds sold for only 80 yuan" and "18000 yuan for diamond rings now only worth 180 yuan", consumers' hesitation is evident.
Red Star News reporters consulted multiple jewelry recycling platforms and learned that the price of recycled diamonds is usually around 30% off the original purchase price. If the appearance is average, there may even be a 10% discount.
"Recycling diamonds mainly depends on the second-hand recycling price at that time and the 4C rating of the diamonds." Mr. Zhang, an industry insider engaged in second-hand diamond recycling, told Red Star News reporters that the original brand of the diamond ring usually does not increase the recycling price. However, if the diamond is less than 0.3 carats, it is often not recycled and only the metal on the ring is valued for recycling.
"If it is a diamond ring with good appearance, it is usually recycled at a discount of 30% to 50% of the original price. If the clarity or color of the diamond is not good, the recycling price may even be reduced by about 10%." Mr. Zhang said that the recycling price of the diamond is only based on the diamond itself, and the certificate and degree of freshness do not affect it.
Mr. Zhang also told Red Star News reporters that even if the diamond is recycled with a certificate, the company will conduct a secondary appraisal of the diamond: "Smaller platforms observe optical characteristics, cutting techniques, etc. through magnifying glasses. Larger platforms distinguish natural diamonds, imitation diamonds, synthetic diamonds, etc. through specialized instruments for appraisal." However, if it is cultivated diamonds and synthetic diamonds, they are generally not recycled.
As for whether diamonds have investment value and appreciation potential, Mr. Zhang told Red Star News
