De Beers will focus on North American market with large marketing investment
DeBeers, a unit of Anglo American, is betting on its biggest market and will back it up with a large investment.
The company said its 2019 marketing budget will exceed last year’s figure of $170 million as it focuses on the United States, where women lavishing diamonds on themselves has boosted sales.
Trade tensions and protests in Hong Kong have hurt sales in China, the second largest diamond market in the world, but in demand in the United States has remained steady. Reuters reported that DeBeers and others see potential for growth in jewelry demand, as shown by LVMH’s nearly $14.5 billion offer, made public on Monday, to buy Tiffany & Co.
Esther Oberbeck, group head of strategy at De Beers, the world’s biggest diamond producer by value, said in an interview the company was about to launch new marketing campaigns, focused on the U.S. and China.
She did not specify the budget, but said De Beers’ 2019 spend would exceed last year’s $170 million and was the highest in more than a decade.
The campaigns, which she said would concentrate on “self-purchase and the bridal market,” are based on research carried out for De Beers, published on Monday.
It found the share of U.S. women buying their own engagement ring doubled from 7 to 14 percent over the five-year period 2013-2017 and that women on average spent a third more than men – $4,400 compared with $3,300.
De Beers sells rough diamonds and jewelry through its Forevermark brand.
Its research anticipates the rough diamond market will recover from a period of oversupply as some mines reach their end of their lives, notably Rio Tinto’s Argyle Mine in Australia.
Global consumer demand for diamonds rose by 2 percent in 2018 to $76 billion and, in dollar terms, China and the United States were the fastest-growing regions, both increasing by 5 percent year on year, it said.
Demand for diamond jewelry in the U.S. rose by 5 percent to $36 billion, representing just under half of total global diamond jewelry demand, underpinned by “solid macro-economic factors,” the De Beers research found.