All that glitters is not gold: Chinese brides fall for diamonds

China’s diamond market, now the world’s second largest after the United States, has more than tripled over the past five years, steadily gobbling up market share from gold and far outstripping the growth rate in China’s jewelry sector.

SHANGHAI // In the private bridal salon at Tiffany’s flagship Shanghai store, white roses and love poems set the mood for China’s Romeo to pop the question to his Juliet.

The room, dotted with splashes of the jeweller’s iconic eggshell blue, has been busy of late, as young Chinese, drawn by the allure of diamonds, increasingly choose the sparkling gems over traditional gold baubles to mark their marriage vows.

China’s diamond market, now the world’s second largest after the United States, has more than tripled to US$22.8 billion (Dh83.68bn) over the past five years, according to data from market research firm Euromonitor, steadily gobbling up market share from gold and far outstripping the growth rate in China’s 465bn yuan (Dh279bn) jewellery sector.

In China “we now have more and more young people making their declarations and proposal ceremonies within our bridal rooms”, said Stephane Lafay, Tiffany’s head of Asia Pacific and Japan. He said couples were attracted to the romantic image of the jeweller’s well-known “little blue box”.

At the centre of the trend are China’s 13 million brides each year, who are increasingly demanding diamonds.

“All along, my husband and I always thought that we would buy a diamond ring, so it never crossed my mind he might not. I think I’d have been pretty cross if he hadn’t,” said Zhou Lijuan, 27, an accountant in a state-owned company in Shanghai, with a 50,000-yuan diamond ring.

To be sure, gold is still hugely popular in China, both as jewellery and as an investment. The World Gold Council said this year that China was set to challenge India’s position as the world’s top gold consumer, with 2013 demand soaring more than 20 per cent to 1,000 tonnes.

But diamonds have steadily increased as a share of China’s overall jewellery market, accounting for just under one third now from one quarter five years ago, according to Euromonitor.

The appeal of diamonds, long linked with wedding bells in Europe and America, has not always been so strong in China, where the bride-to-be’s family was often responsible for supplying a gold-based dowry of rings, bracelets and other trinkets.

“In my mum’s generation, women were really just interested in gold. The woman’s family would prepare a gold bracelet themselves, and the man’s side would arrange a golden betrothal gift,” added Ms Zhou, who was married last year.

But tastes are changing.

China’s modern consumers have much more exposure to Western culture than their parents, including books, films and television that often involve heroines or romantic leads receiving or wearing a diamond ring.

“Western films have a kind of bridge effect, so when Chandler buys a diamond ring for Monica in Friends, it really left a deep impression,” said Lily Cai, 30, a civil servant in Shanghai, referring to the US television series.

“A diamond ring is a symbol of love, and the larger the diamond the deeper the love,” she said. She has a diamond ring from Chinese jewellers Chow Tai Fook Jewellery that cost 43,000 yuan.

The sparkle of China’s diamond industry has tempted jewellers, miners and dealers alike.

Global auction house Sotheby’s is set to offer a huge white diamond in Hong Kong at the start of October, which would be the most expensive white diamond ever sold at auction if it hits its $28m lower pre-sale target.

“From 2006 until now we’ve seen a threefold increase, close to 200 per cent, of Asian buyers purchasing jewellery worldwide. What they’ve really focused on, of course, is diamonds,” said Patti Wong, chairman of Sotheby’s Asia, who added Chinese buyers were showing increasing confidence about snapping up the most expensive gems.

De Beers, the largest diamond producer by value and majority-owned by miner Anglo American, sees China as driving growth over the next four years. It has five diamond-focused outlets in China with more set to open this year.

China will also be a critical market for Rio Tinto’s diamond business, after the world’s No 3 miner scrapped a planned sale of the unit this year. Rio Tinto has now set up links with Chow Tai Fook, and last week invited 100 jewellery experts in Hong Kong to see its latest diamond haul.

“Going forward China will be the engine for growth in global retail diamond jewellery consumption,” said Jean-Marc Lieberherr, managing director of Rio Tinto’s diamonds and minerals division.

* Reuters