Namibia has long been renowned for producing some of the world’s most beautiful and valuable diamonds.
And these treasures of nature remain just as important to Namibia’s future as they have been to her past. But for Namibia to continue to see the huge economic benefits that the partnership with De Beers have delivered, there must continue to be strong demand from consumers for diamond jewellery.
That’s why we at De Beers spend so much time trying to understand what tomorrow might look like.
This week, we published our latest Diamond Insight Report, which I’m delighted to say shows that not only is there still strong demand for diamonds, but also that it is set to grow in the years ahead due to the purchasing power of the ‘Millennial’ generation (those born between 1981 and 2000).
This is apparent in the results of a three-year study contained in the report, where we interviewed 75 000 Millennial consumers to understand their desire for diamond jewellery.
The study showed that Millennials are already spending more on diamond jewellery than any other generation. In 2015, they spent more than US$25 billion on diamond jewellery across the US, China, India and Japan – almost half of the total value of retail sales in these markets.
All this, despite this generation still being around 10 years away from its purchasing peak. This shows that younger consumers already have just as strong a desire for diamond ownership as their predecessors, even though it’s taking them longer to reach financial maturity.
And when Millennials do reach the life stage where they have the most disposable income, they will present a major source of growth potential for the diamond sector. At De Beers, we’re poised to maximise this growth potential in two ways.
First, by continuing to invest in our Forevermark brand. Forevermark diamonds carry with them the promise that they are beautiful, rare and responsibly sourced, and our survey emphasised that Millennials express a stronger desire than previous generations for ethically sourced products.
With a series of imaginative and engaging marketing campaigns we’re therefore bringing the Forevermark message to more and more consumers around the globe.
Second, we will continue to support ‘category marketing’ programmes – where we aim to drive demand more generically for diamonds, rather than for a specific brand – across the US, China and India, and through our work with the Diamond Producers Association (DPA).
The DPA, an organisation formed by De Beers and other diamond producing companies, is still in its infancy, but has big plans for targeting Millennial consumers during the all-important end-of-year holiday selling season.
However, while investment on the consumer side is crucial for the industry’s continued success, a consistent supply of rough diamonds to meet that demand is equally important. To this end, I’m pleased that our major investment projects are progressing well; in particular, the mv SS Nujoma in Namibia. Just last month, this innovative diamond sampling and exploration vessel arrived in Cape Town in South Africa for final outfitting before it sets sail to Namibia during the first half of next year.
Namibia remains a key partner for De Beers, as highlighted by our signing of a 10-year landmark agreement with the government of the Republic of Namibia for the sorting, valuing and sale of Namdeb Holdings’ rough diamonds earlier this year.
However, we cannot become complacent and rely on past successes as an indicator of what future success might look like. The world is changing faster now than it ever has before. With new markets emerging, consumer attitudes shifting and diamonds becoming even more difficult to find, partnership must remain the stable bedrock on which we will all flourish.
And it is the strength of our partnerships across the entire diamond value chain, from our joint venture partners and local communities, to diamantaires and retailers, which will ensure Namibia’s beautiful diamonds continue to be adored by consumers around the world for many years to come.
* Bruce Cleaver is CEO of De Beers Group. De Beers’ Diamond Insight Report 2016 is available online at www.debeersgroup.com/insightreport.