De Beers Group says most of its net end consumers are still intact financially, and stand ready to demand its luxury and magnificent offerings in diamond jewellery.
A study conducted by the diamond mining global giant during COVID-19 lockdown suggests that over two thirds of jewellery buyers still have the financial capacity to purchase the sparkling downstream products.
De Beers, which sources most of its diamonds from Botswana, is present in all segments of the diamond business, Upstream where it mines diamonds in Botswana, South Africa, Namibia and Canada; Midstream where it sorts, values and sells rough diamonds, by in large in Botswana, at the Global Sightholder sales.
The company also has a strong presence in the downstream which comprises of retail. DeBeers operates in this space through Forevermark, a retail brand of jewellery made from natural, hand selected rare diamonds.
Following a promising recovery from slow year in 2019, De Beers Group and the entire diamond industry then faced a catastrophic down cliff as a result of the novel Coronavirus which put breaks on almost everything in the first half of 2020.
The novel contagious plague sprang out of China in December 2019, and then intensified in February, putting the entire world at a standstill, shutting down businesses and restricting movement of, people, goods and commodities whilst also caging people in their houses for months.
De Beers’ second sight fell by about 36 % from the first sales of the year and 25 % when gauged against the same sight in 2019. This was mainly due to slow business in China where corona virus broke in the city of Wuhan.
After the United States, China is De Beers’ second biggest market. Business was also slow in India and Belgium, which houses some of the world largest centers of diamond cutting and polishing industries.
However findings from recent surveys by the diamond mining unit of Anglo-American suggests there might be some positive from the worldwide lockdowns. The London headquarters, once diamond business monopoly says consumers have introspected during these lockdowns.
According to De Beers the introspection at the need for things that matter, that represents love and values life more, something which diamond and diamond products stand for.
A research undertaken over a period of nine weeks by De Beers Group suggests that consumers in the US will reassess their purchasing behavior in light of the COVID-19 pandemic. It says gifts that are meaningful and that retain their value will be the priority as people emerge from lockdown.
The research demonstrated that lockdown had made many consumers feel grateful for things they used to take for granted, such as spending time with family, and that this would influence their purchasing and gifting behavior in future.
When it came to gifting and in particular looking forward to the holiday season, 56 percent of respondents from the survey felt gifts should be meaningful, over and above being practical, functional or fun.
This research which will make part of the upcoming diamond insights states that Diamonds were seen as the top gift for symbolizing intimacy, connectedness and love among both men and women, with the primary desire for purchasing being a reflection of gratitude and acknowledgement during the current crisis.
Ninety percent of respondents said that choosing gifts that hold their value over time would be an important consideration this holiday season, and more people chose diamonds as the top choice for a gift of this nature from a list of luxury items including designer clothing and accessories, electronic devices, a piece of furniture, or other jewellery.
The findings are the first in a series of Diamond Insight ‘Flash’ Reports that De Beers Group will publish to share insights regarding the evolving consumer perspective and what it means for diamonds as the world passes through the stages of the COVID-19 crisis.
The mining behemoth also found that around two-thirds of the consumers polled indicated their personal finances have not been affected by COVID-19. Three-quarters of consumers said that COVID-19 had not impacted their likelihood to purchase diamond jewellery and the majority of respondents continued to wear their diamond jewellery during lockdown because it made them ‘feel connected to someone’.
De Beers says consumers felt safest shopping for jewellery online; however, they clearly distinguished local independent jewellers as the best source for knowledge and product quality, as well as being considered the safest of all the physical outlets for jewellery shopping.
Forty-five percent of respondents said that they would seek to buy fewer, better things when considering clothing and jewellery purchases after the lockdown. Consumer preference for travel continues to show a declining trend, with 39 percent of consumers saying it will be seven to 12 months before their travel spending stabilizes.
Bruce Cleaver, CEO, De Beers Group, said: “The COVID-19 crisis and associated lockdowns have caused people all around the world to re-evaluate aspects of what’s important in their lives and have reinforced the value of personal relationships.”
The London based diamond industry gaffer said while consumer confidence and spending has been significantly impacted in the US diamonds will nonetheless have a unique role to play in people’s lives in a post-lockdown world as they seek to celebrate their most meaningful relationships
“While it will take some time for the market to recover fully, we hope these insights will assist large and independent jewellery retailers alike to understand the evolving consumer perspective as we move through and emerge from the crisis,” said Cleaver.
Chinaâ€™s Gross Domestic Product (GDP) expanded by 3% year-on-year to 121.02 trillion yuan ($17.93 trillion) in 2022 despite being mired in various growth pressures, according to data from the National Bureau Statistics.
The annual growth rate beat a median economist forecast of 2.8% as polled by Reuters. The countryâ€™s fourth-quarter GDP growth of 2.9% also surpassed expectations for a 1.8% increase.
In 2022, the Chinese economy encountered more difficulties and challenges than was expected amid a complex domestic and international situation. However, NBS said economic growth stabilized after various measures were taken to shore up growth.
Industrial output rose 3.6% in 2022 over the previous year, while retail sales slightly shrank by 0.2% data show that fixed-asset investment increased 5.1% over 2021, with a 9.1% hike in manufacturing investment but a 10% fall in property investment.
China created 12.06 million new jobs in urban regions throughout the year, surpassing its annual target of 11 million, and officials have stressed the importance of continuing an employment-first policy in 2023.
Meanwhile, China tourism market is a step closer to robust recovery. Tourism operators are in high spirits because the market saw a good chance of a robust recovery during the Spring Festival holiday amid relaxed COVID-19 travel policies.
On January 27, the last day of the seven-day break, the Ministry of Culture and Tourism published an encouraging performance report of the tourism market. It said that domestic destinations and attractions received 308 million visits, up 23.1% year-on-year. The number is roughly 88.6% of that in 2019, they year before the pandemic hit.
According to the report, tourism-related revenue generated during the seven-day period was about 375.8 billion yuan ($55.41 billion), a year-on-year rise of 30%. The revenue was about 73% of that in 2019, the Ministry said.
The state of the art jewellery manufacturing plant that has been set up by international diamond and cutting company, KGK Diamonds Botswana will create over 100 jobs, of which 89 percent will be localized.
Local diamond and metal exploration company Tsodilo Resources Limited has negotiated a non-brokered private placement of 2,200, 914 units of the company at a price per unit of 0.20 US Dollars, which will provide gross proceeds to the company in the amount of C$440, 188. 20.
According to a statement from the group, proceeds from the private placement will be used for the betterment of the Xaudum iron formation project in Botswana and general corporate purposes.
The statement says every unit of the company will consist of a common share in the capital of the company and one Common Share purchase warrant of the company.
Each warrant will enable a holder to make a single purchase for the period of 24 months at an amount of $0.20. As per regularity requirements, the group indicates that the common shares and warrants will be subject to a four month plus a day hold period from date of closure.
Tsodilo is exempt from the formal valuation and minority shareholder approval requirements. This is for the reason that the fair market value of the private placement, insofar as it involves the director, is not more than 25% of the companyâ€™s market capitalization.
Tsodilo Resources Limited is an international diamond and metals exploration company engaged in the search for economic diamond and metal deposits at its Bosoto Limited and Gcwihaba Resources projects in Botswana. Â The company has a 100% stake in Bosoto which holds the BK16 kimberlite project in the Orapa Kimberlite Field (OKF) in Botswana.