HONG KONG, Feb 14 — A woman dressed elegantly in a black pants suit, hands tucked in her pockets, poses with confidence as she displays a collection of glistening silver medals gleaming from her tailored jacket.
“A memento to reward your own success,” reads the slogan alongside a diamond encrusted pendant in an advertisement from Chow Tai Fook, a Hong Kong-based jewellery company that has a big presence across China.
Facing slowing global demand for diamond jewellery, diamond companies from around the world are reshaping marketing campaigns to tap a growing pool of independent female spenders in China, the world’s second largest economy.
Chinese and international players such as Tiffany & Co, Debeers and the Diamond Producers Association are increasing their marketing budgets by as much as 50 per cent globally, according to the companies.
The aim is to promote diamonds as a way for women to express themselves rather than tie the gems to traditional marketing notions of marriage. In China, which is the fastest growing market, this is a particular focus, executives said.
Debeers in September said 26 per cent of all diamond jewellery in China was bought by women in 2016, with growth of about 12 per cent annually for the country.
That rapidly growing market is being seen as a key prize for jewellery companies due to low penetration rates and rising spending power among an increasingly wealthy female population.
The challenge for diamond companies is to stay relevant at a time when spending on experiences and activities — like travel — is gaining favour and many younger consumers are shunning traditional notions of marriage, jewellery executives say.
“Divorce rates are soaring, they see dating apps, cheating, that is very much of the environment they live in today,” Jean-Marc Lieberherr, head of the Diamond Producers Association, said in an interview, referring to young people in China.
“They are very suspicious of the idea of marriage in the sense as something as a fairy tale.”
The DPA, which represents miners such as Rio Tinto and Alrosa, has more than quadrupled its global marketing budget over the past two years and is planning to spend US$70 million (RM 275.49 million) in 2018, up nearly six-fold from US$12 million in 2016.
It is focusing on China in 2018 and is planning to spend US$10 million launching its “Real is Rare” campaign in the country later this year. It has already rolled out the campaign, aimed at millennials, in India and the United States.
Lieberherr said a key focus was to get consumers to move away from the notion of diamonds just as gifts for special occasions.
Alan Chan, deputy general manager at Chow Tai Fook in Hong Kong said that over the past five years women had started buying diamonds themselves far more frequently in line with fashion trends.
“We see a growing trend of the self-use market by women,” he said.
“There are more working ladies who are financially independent and have their own income. Instead of buying one every few years, now it can be a few times in a year.”
The expansion of campaigns in Hong Kong and China, also undertaken by smaller players like Chow Sang Sang and Luk Fook Holdings, marks a shift from the 2000s, when diamond companies globally spent less than 1 per cent of total sales on marketing, the consultancy Bain said in its Global Diamond report in December.
It said that led to industry growth that lagged most other luxury products.
“Increasing demand for diamonds is a high-stakes game for the entire diamond value chain,” said Bain partner Olya Linde.
Softening demand could have significant economic implications for countries that depend on the industry as one of their sole sources of revenue, she said.
For Cordelia, an office worker shopping for jewellery in Hong Kong’s bustling Causeway Bay district who would only provide her first name, buying for herself made total sense.
“You don’t have to wait for someone to give it to you as a gift,” she said. “You never know if they will choose something you like. Whatever you like, you can choose.” — Reuters