Chinese brides and Indian festivals will drive diamond demand into new year, the CEO of De Beers told CNBC, as the market for the precious jewel continues to rebound.
The U.S. is by far the biggest diamond market in the industry that was worth $72.1 billion in 2012 but China and India are the fastest-growing, seeing impressive double-digit growth between 2006 and 2012.
Stronger demand during the second half of the year owing to Thanksgiving in the U.S. and Chinese New Year has seen retailers restocking at a faster pace than last year, according to Philippe Mellier, CEO of De Beers, with the Chinese bridal market set to fuel further growth in the world’s second-largest economy.
“If we look at China, the market is expanding still because the diamond jewelry is now penetrating…smaller cities…so the conquest of diamond jewelry in china is not completed,” Mellier said in a TV interview.
“So we can see some…further growth in China where the bridal market is still very very strong and diamonds are unique pieces of jewelry for that occasion.”
Anglo American, the parent company of De Beers, reported the diamond business had underlying operating profit of $765 million in the six months to June 30, a 34 percent rise from the same period last year.
Read More Tough times for luxury retail in China
As well as continued growth in China and the U.S., Mellier is expecting the Indian market to sparkle with Diwali celebrations approaching and confidence in newly elected Indian Prime Minister Narendra Modi’s policies.
“Mr Modi has been elected and Mr Modi is coming from the state of Guajrat which is the diamantaire state in India,” Mellier said.
“We all believe with our customers that Mr Modi is going to push this industry forward and we are pretty optimistic that we are going to enjoy good growth for diamond jewelry in India by the second part of 2014 with the Diwali season.”
The diamond jewelry market plunged after the global financial crisis hit, with sales contracting 9 percent a year between 2007 and 2009, according to Bain & Company. Between 2010 and 2011, the sector rebounded with 13 percent annual growth.
India’s jewelers become frontline in gold battle
While China and India will continue to grow quickly, analysts said that the mid- to low- range jewelry market will dominate.
“Brands interested in markets like China have to move on from elite who might buy $150,000 necklace and move on to that lower cost market,” Winston Chesterfield, associate director at Ledbury Research, told CNBC in a phone interview.
“The growth will come in the lower end of diamonds. Rings are going to be a big thing as people look west and follow western customs.”