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1、1000150200250300A NEW DIAMOND WORLDThe Diamond Insight Report 2022Bringing trusted brands to new generations in a digital ageCONTENTSFORWARD-LOOKING STATEMENTSThis report includes forward-looking statements.Allstatements other than statements ofhistorical facts in thisreport,including,without limita

2、tion,those regarding DeBeers Groups future expectations and/or future expectations in respect of the diamond industry,are forward-looking statements.By their nature,such forward-looking statements involve known and unknown risks,uncertainties and other factors which may cause the actual results,perf

3、ormance or achievements of diamond markets,or industry results,to be materially different from any future results,performance or achievements expressed or implied by such forward-looking statements.Such forward-looking statements are based on numerous assumptions made by De Beers Group in respect of

4、the present and future business strategies and the wider environment of the diamond industry.Important factors thatcould cause actual results,performance or achievements to differ materially from those in the forward-looking statements include,among others,levels ofactual production during any perio

5、d,levels of global demand and commodity market prices,mineral resource exploration and development capabilities,recovery rates and other operational capabilities,the availability of mining and processing equipment,the ability to produce and transport products profitably,the impact of foreign currenc

6、y exchange rates on market prices and operating costs,theavailability of sufficient credit,the effects of inflation,political uncertainty and economic conditions in relevant areas ofthe world,the actions of competitors,activities bygovernmental authorities such as changes in taxation orsafety,health

7、,environmental or other types of regulation in the countries relevant to thediamond industry,conflicts overland and resource ownership rights,the impact of global pandemics and other such risk factors.Forward-looking statements should,therefore,be construed in light ofsuch risk factors and undue rel

8、iance should not be placed on forward-looking statements.These forward-looking statements speak only as ofthe date of this report.De Beers Group expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement contained herein to reflect

9、 any changein De Beers Groups expectations with regard thereto or any change inthe events,conditions orcircumstances on which any such statement is based.DISCLAIMERThis report has been prepared by De Beers Group and comprises the written materials concerning DeBeers Group and the wider diamond indus

10、try.This report has been compiled by DeBeers Group and/or its affiliates from sources believed to be reliable,but no representation or warranty,express orimplied,ismade as to its accuracy,completeness or correctness.Allopinions and estimates contained in this report are judgements as of the date of

11、this report,are subject to change without notice and are provided in good faith but without legal responsibility.This report should not be construed as business advice and the insights are not tobe used as the basis for investment or business decisions ofany kind without your own research and valida

12、tion.Thisreport is for information purposes only.The information contained in this report may be based on internal data,or data sourced from,or provided by,third parties or publicly available sources.As such,it may include the disclosures and/or views of those third parties,which may not necessarily

13、 correspond to the views held by De Beers Group.De Beers Group does not offer any representation or warranty as to the accuracy or completeness of this report and no reliance should be placed on the information disclosed for any purpose.Nothing in thisreport should beinterpreted to mean that De Beer

14、s Group or the diamond industry(as the case may be)will necessarily perform in accordance with the analysis or data contained in this report.All written or oral forward-looking statements attributable to DeBeers Group or persons acting on its behalf are qualified in their entirety by these cautionar

15、y statements.To the full extent permitted by law,neither De Beers Group norany of its affiliates,nor any other person,accepts any liability whatsoever for anydirect or consequential loss arising from any use of this report or theinformation contained herein.Note:Some figures may not add up to 100 pe

16、r cent due to rounding.P33ForewordP4DIAMOND VALUE CHAIN DASHBOARD5Downstream9Midstream11UpstreamP14IN FOCUS15Introduction18Forces shaping a new diamond world18Trend 1 Values will underpinindustry value22Trend 2 The rise of brands25Trend 3 Phygital retail is here to stay33Trend 4 Web3 and the metaver

17、se arepotential game-changers40Conclusion2DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSThe trends affecting consumer preferences are particularly critical because the pace of this evolution is accelerating,spurred by global events,the power of digital technology and at

18、titudes of new generations.As this report demonstrates,however,preferences we had been observing for some years such as the desire to buy from trusted brands,to purchase more sustainably,to know where and how a diamond is sourced,and to shop digitally are no longer future predictions for the diamond

19、 industry.These preferences are already in evidence today and are set tobecome even more integral to the natural diamond purchase journey in the years to come,particularly as they are being led by Gen Z,which represents the next generation of diamond consumers.With the unprecedented events the diamo

20、nd industry and the world at large have faced in recent years,businesses could be forgiven for not always having the future as their top priority.The present has certainly given us all enough to focus on.But as the African proverb states,tomorrow belongs to the people who prepare for it today.Gettin

21、g ready now for a future where the younger generations of today will be the primary diamond client in less than a decade is a pre-condition of success for every business in the diamond sector.The Covid-19 pandemic was a timely example of this for the diamond industry.Those who had invested in their

22、e-commerce offerings prior to the pandemic were far better placed tocontinue meeting the needs of their customers when stores closed during lockdowns.The sanctions imposed by the US this year following the conflict in Ukraine have also highlighted how an area of emerging focus for the industry prove

23、nance assurance can become an overnight priority.With the advent of Web3 and the metaverse,the diamond industry needs to keep an eye onthese new technologies,the opportunities they present and consider how to respond.Importantly,these trends are not occurring in isolation.They are interconnected and

24、 it is their convergence that is forming what we call a new diamond world one where the industry must bring trusted brands to new generations ina digital age.This report explores four key trends that are shaping the new diamond world,based on De Beers Groups unique research insights andexpert third-

25、party perspectives,with aparticular lens on the emerging Gen Z.Theyare:Values will underpin industry value The rise of brands Phygital retail is here to stay Web3 and the metaverse are potential game-changers.In doing so,it aims to provide guidance to assist trade participants in preparing for and r

26、esponding to future opportunities.Because while it is inevitable the future will continue to surprise us,one thing of which I am sure is the enduring appeal of diamonds.But businesses must embrace the new diamond world to avoid being left behind.As in previous years,this years report also includes t

27、he diamond value chain dashboard which tracks industry performance during 2021 and the first half of 2022.As ever,the dashboard contains useful data relating to theupstream,midstream and downstream,reflecting on the industrys record performance in 2021 and providing an outlook for 2022.Ihope you fin

28、d the report as interesting to readas we found itto develop.BRUCEFOREWORDThis years Diamond Insight Report isfocused on the future.Or more accurately,how future trends are arriving at an increasing pace and are in the process of reshaping the natural diamond industry.3DIAMOND INSIGHT REPORT 2022INTR

29、ODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSILLUSTRATIONDIAMOND VALUE CHAIN DASHBOARD5Downstream9Midstream11Upstream4DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUS2021 was a year of recovery from the decline in consumer demand for natural diamond jewellery caused by th

30、e Covid-19 pandemic restrictions in 2020.The pace of the global recovery was strongest in the early part of 2021 compared with a low base ayear earlier,butthis moderated in the second half when the comparative base was higher.The US was the main driver of growth throughout the year.*Demand for diamo

31、nd jewellery includes pre-owned pieces,while the demand for polished diamonds is for new diamonds only.In 2021 it is estimated that considerably more diamond jewellery demand came from pre-owned,compared to 2020,and this resulted in negative demand growth for new polished diamonds.1 Natural diamond

32、jewellery demand has been defined for the purposes of this report as demand for jewellery containing both new and pre-owned diamonds,while demand for polished diamonds excludes any pre-owned diamonds sold as new.This has an impact mainly in the US and Japan where there is more significant pre-owned

33、diamond resale activity among consumers.2 The currencies of the main diamond consuming countries in the Gulf UAE and KSA are pegged to the US dollar.REGIONPOLISHED DIAMOND (USDbn)CHANGEDIAMOND JEWELLERY (USDbn)CHANGEGLOBAL(US$BN)Global demand for natural diamond jewellery grew by 27%in 2021 to US$87

34、bn which was 10%higher than demand in 2019.The US was largely responsible for this growth from pre-pandemic levels.0402020:222021:28+27%402020:682021:87+27%US(US$BN)Natural diamond jewellery sales in the US rose by approx.34%to$47billion,representing more than half(54%)of total global diamond jewell

35、ery demand.Demand for diamonds was supported both by the governments fiscal stimulus programmes and by the savings consumers had accumulated by spending less on travel and entertainment during Covid-19-related restrictions.The end-of-year holiday season saw unprecedented growth on an already stronge

36、r 2020 base.2020:112021:15040+36%2020:352021:47040+34%CHINA(US$BN)Demand for natural diamond jewellery by Mainland Chinese consumers grew by 23%in local currency and by 32%in US dollar terms.Chinese acquisitions abroad remained dormant due to Covid-19 related international travel bans.Domestic diamo

37、nd jewellery sales recovered strongly in the first half of the year from a low base,while growth moderated in the second half.0402020:32021:3+32%2020:82021:10040+32%INDIA(US$BN)Consumer demand increased by an estimated 20%in both local currency and US dollars.The India market faced Covid-19 related

38、challenges in the early part of the year when demand was depressed,but recovery gained pace as cities started to come out of lockdowns,culminating with a surge in consumer sentiment and demand during the Diwali holiday season.2020:22021:2040+20%2020:42021:5040+20%JAPAN(US$BN)Demand from Japanese con

39、sumers grew by 15%in local currency and by 12%in USdollar terms.Recovery was strongest in the first half of the year,but year-on-year growth continued in the fourth quarter despite pre-pandemic levels of demand having been reached 12 months earlier.*2020:12021:1040-7%2020:52021:5040+12%GULF(US$BN)De

40、mand from consumers in the Gulf rose by an estimated 24%in US dollar terms2.Consumer demand had recovered to 2019 levels.2020:12021:2040+24%2020:22021:3040+24%REST OF WORLDDemand for diamond jewellery in all remaining markets grew by an estimated 15%inUS dollars,with Western European markets increas

41、ing at a faster pace,supported by the strong recovery in consumer sentiment and a favourable movement of the exchange rate of the Euro against the US dollar.2020:52021:5040+15%2020:152021:17040+15%2021 NATURAL DIAMOND JEWELLERY AND POLISHED DIAMOND DEMAND1(IN US DOLLARS,NOMINAL)Global demand for nat

42、ural diamond jewellery in 2021 rose by an estimated 27 per cent year-on-year and by 10 per cent vs 2019 to reach an all-time high of US$87 billion.DOWNSTREAM5DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUS0200020002000200LMVHRICHEMONTKERINGHERMESFULL YEAR 2021+44%+46%+35

43、%+41%+167%+55%+43%+57%0200020002000200LMVHRICHEMONTKERINGHERMESH1 2022+28%+25%+23%+70%+22%+24%+30%+93%Note:All figures represent actual revenue growth:Jewellery definitions:LVMH Watches and Jewellery,Richemont Jewellery Maisons,Kering Other Houses,Herms Other Business Lines Source:S&P Capital IQ Pro

44、;De Beers analysisDOWNSTREAMcontinuedGLOBAL POLISHED DIAMOND SHARE BY GEOGRAPHY(ATWHOLESALE PRICES)Among the main diamond-consuming countries,polished diamond demand in the USgrew by more than the global average,which resulted in its increased share of globaldemand to over half(52 per cent).Theshare

45、 of Greater China in polished diamond demand recovered somewhat year-on-year but remained below the 2019 level.India andJapan lost share due to slowerthan globalgrowth rates.2022 DEMAND OUTLOOKThe luxury goods sector performed strongly in2021 as consumers experienced the benefit of pandemic-related

46、fiscal stimulus and a lack of opportunities for experiential spending.Thepositive momentum carried over to the firsthalf of 2022,with major luxury brands reporting strong sales growth in Europe and North America which offset the deceleration inChina.Luxury jewellery outperformed other luxury categor

47、ies in 2021 and continued topost strong sales growth in the first half of2022.Global demand for natural diamond jewellery in the first half of 2022 grew by an estimated high single digit figure compared with the first half of 2021.Growth was estimated to be strongest at low double digits for the US

48、and Japan,while India and the Gulf grew in single-digit figures.China was the only country to experience a decline in diamond demand,largely due to the impact of Covid-19-related lockdowns.A combination of above-trend nominal wage growth and a steady pace of employment growth contributed towards hig

49、her consumer demand for natural diamonds in the US in thefirst half of 2022.However,the persistent high rate of inflation and the global economic challenges exacerbated by the Russia-Ukraine conflict dented consumer confidence in the second quarter and diamond demand subsequently started to soften a

50、t the end of the quarter,although it remained positive overall for the half-year.China is estimated to have experienced a mid-single-digit year-on-year decline during thefirst half of 2022.This was caused by depressed consumer demand in the second quarter as a result of Covid-19 lockdowns inanumber

51、of major cities and slowing macroeconomic fundamentals.TOTALJEWELLERYLUXURY JEWELLERY VS LUXURY HOUSES OVERALL PERFORMANCE 2021 AND H1 20226DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUS2018$1,100(RMB7,075)2019$1,9522020$1,400(RMB9,437)2021$2,876DOWNSTREAMcontinuedIn th

52、e short to medium term,fears around aresurgence of the Covid-19 pandemic havebeen overtaken by concerns about historically high rates of inflation,the soaring cost of energy and the rising cost of living for consumers globally.The geopolitical turmoil inEastern Europe and other regions exacerbates t

53、he challenges for the global macroeconomic environment,leading to reduced consumer confidence and lower discretionary spending.Taking into account these factors,as well as the higher comparison base from last year,theoutlook fordiamond demand growth for the second half and the fullyear 2022 is of af

54、urther slowdown in countries with higher inflation,aswell as caution globally.However,it is expected thatmore affluent Millennials will continue todrive sales of luxury,fine jewellery and diamond jewellery.CONSUMER TRENDS DURING THE POST-COVID-19 RECOVERYINCREASED SPEND BY FEWER BUT MORE AFFLUENT DI

55、AMOND ACQUIRERSThe Covid-19 pandemic had an uneven impact on consumers around the world,with the higher income groups spending remaining the most resilient.This stimulated demand for luxury goods in 2021 and resulted in higher spend on diamond jewellery by fewer but more affluent acquirers.In China,

56、the number of female new diamond jewellery acquirers in 2020(the year worst affected by the pandemic)declined by 32 per cent compared with 2018,while average spend increased by 33 per cent over the same period.In the US,in 2021(the year of post-Covid-19 recovery),there were 25 per cent fewer acquire

57、rs compared with 2019 butthey were responsible for a 27 per cent increase in diamond jewellery demand in value terms as average spend increased.The share of the highest income groups3 increased in the two leading diamond markets during these periods by 39 per cent in China(to 22 per cent of all acqu

58、irers)and by 44 per cent in the US(to 26 per cent of all acquirers).3 The highest income groups are defined as follows:US annual household income US$150,000 or more;China monthly household income RMB20,000 or moreSource:De Beers commissioned Diamond Acquisition Studies,China 2021 and US 2022USACHINA

59、AVERAGE SPEND PER DIAMOND JEWELLERY PIECE7DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSDOWNSTREAMcontinuedNotes:4 De Beers commissioned Diamond Acquisition Studies(DAS)US 2022 and China 20215 De Beers commissioned Diamond Acquisition Study(DAS)US 20226 De Beers Diamond

60、 Insight Report 2021,In Focus:Sustainability:shaping the future of the diamond sector7 De Beers commissioned Diamond Acquisition Study(DAS)US 2022OMNICHANNEL IS THE FUTURE FOR DIAMOND JEWELLERY RETAILThe increasing importance of digital is a trend that affected the diamond industry in similar ways t

61、o other consumer goods sectors during the pandemic.For diamonds,the impact was in two areas of the consumer journey researching the acquisition and making the purchase.In the US,49 per cent of newly acquired diamond jewellery pieces were researched online in 2021(up from 37 per cent in 2019).In Chin

62、a,in 2020 that number was 39 per cent(up from 25 per cent in 2018)4.With regards to online purchases,the US was a considerable way ahead.In 2021,nearly one-third(31 per cent)by volume of new diamond acquisitions by women and 25 per cent of sales by value contained an online component.By contrast,in

63、China,the respective proportions in 2020 were four per cent of acquisitions and three per cent of sales value.Even though online acquisitions by Chinese consumers were reported as relatively small,possibly due to the merging of digital and physical into phygital retail,nearly two infive Chinese diam

64、ond jewellery retailers(38per cent)offered e-commerce in 2021.Theonline share of diamond jewellery sales overall reached an estimated seven per cent by value more than double the share in 2020.The big question facing the diamond retail trade was:is digital here to stay beyond the pandemic?This was c

65、learly answered affirmatively in new De Beers research commissioned among female US consumers in20225.Nearly half of digital acquisitions(46 per cent)were repeat online purchases and more than two-thirds of online diamond acquirers(68 per cent)said they intended to continue buying natural diamond je

66、wellery online.The potential of online is supported by consumers confidence in this sales channel three in five digital acquirers(60 per cent)saidthey were happy to buy online remotely without seeing the physical product.Read more about this trend in the InFocus section of this report.PROVENANCE AND

67、 SUSTAINABILITY ARE A GROWING OPPORTUNITY FOR DIFFERENTIATIONAs the 2021 Diamond Insight Report6 revealed,sustainability is becoming a growing consumer imperative in the diamond industry,as the younger generations increasingly choose products which can demonstrate theirsustainability credentials.Wha

68、t is more,they are also prepared to pay a premium forsustainably produced diamonds.The latest De Beers consumer research7,conducted among more than 18,000 US women in 2022,showed that more than half of US women(51 per cent)would not buy diamonds if they knew they were not ethically sourced and 40 pe

69、r cent said that knowing about the positive impact of diamonds on local mining communities would make them more likely to buy diamonds.A total of 36 per cent of US women specifically look into the ethical credentials of the diamond jewellery brands they are considering buying.Environmental,social an

70、d governance(ESG)factors play an important role in consumers choice of diamond brands.Two in five US women(39 per cent)rank preserving wildlife around the diamond mines and sourcing fromconflict-free zones as the most influential ESG considerations when choosing a diamondbrand.Read more about this t

71、rend in the InFocus section of this report.THE USE OF DIGITAL IN RESEARCHING DIAMONDS49%of piecesUS 202139%of piecesChina 2020E-COMMERCE SHARE OF ACQUISITIONS BYVALUE(2021)25%US7%ChinaESG CONSIDERATIONS RANK HIGHLY INDIAMOND ACQUISITION39%Proportion of US women allocating the highest rating to each

72、of the following ESG considerations:Preserving wildlife around the diamond mines Sourcing from conflict-free zones8DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSMIDSTREAMIn 2021,the diamond midstream recovered strongly from the effects of the Covid-19 pandemic bolstered

73、 by strong consumer and retailer demand for diamond jewellery.The robust polished diamond wholesale demand,and limited supply due to historically low levels of producer stocks,created asupportive environment for polished diamond price growth in 2021.However,the sanctions introduced by the US and oth

74、er countries on Russia in 2022 have presented the midstream with new challenges and led to a greater focus onprovenance and supply chain transparency.The momentum in rough diamond demand continued in the first half of 2021 following positive retail sales over the 2020 holiday season and a desire by

75、diamond cutting andpolishing factories to restock.Overall,strong sales of polished diamonds and higher polished prices supported rough diamond price growth in the first half of 2021.Despite a brief interruption as a second wave of Covid-19 swept through India in April 2021,impacting cutting centres,

76、manufacturing capacity improved.It did not return to full utilisation in 2021,however,as the midstream faced rough diamond shortages for the rest ofthe year.Net rough diamond imports to India grew more than 190 per cent year-on-year in the firsthalf of 2021.This was due to a continued strong recover

77、y and the comparison with alowbase from the first half of 2020 when global Covid-19 restrictions were at their peak.Compared with the pre-pandemic 2019,netrough diamond imports were 23 per cent higher in the first half of 2021.In the second half of 2021,polished trading performance was mixed.Demand

78、from the US was stronger than demand from China,where economic growth slowed as Covid-19 spread more widely.Demand was particularly soft for polished diamonds sized between 0.30 to 1.00 carats,which are mainly in demand inChina.Polished diamond demand improved further at the end of 2021,mainly as a

79、result of demand from US and Indian retailers responding to strong consumer appetite during the holiday season.This continued to create a positive environment for polished price growth.Net rough diamond imports into India grew more than nine per cent year-on-year in the second half of 2021 from an a

80、lready strong base in the second half of 2020(when rough diamond demand started to recover following the peak of the global Covid-19 restrictions).Net rough diamond imports were seven per cent above the second half of 2019.For the 2021 full year,the growth in net rough diamond imports to India was 6

81、0 per cent year-on-year and 15per cent when compared with 2019.Midstream liquidity and financing remained healthy in 2021.There was no evidence of liquidity pressure as assets rotated normally inlenders borrowing bases and bankers experienced minimal late payments on receivables.Utilisation of bank

82、credit was stable but slackened slightly due to scarcity ofrough.For the major diamond producers,2021 alsomarked the start of new supply contracts.The new contracts supported efficiency and value-addition in the diamond pipeline through the creation of customised contracts for manufacturers,dealers

83、and retailers,designed to meet the needs of different business models.Beneficiation(diamond cutting and polishing in producer countries)also expanded in 2021 as the number of factories operating insouthern Africa increased.9DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUS

84、-20020406080100120H2-2015H1-2015H2-2015H1-2014H1-2016H2-2016H1-2017H2-2017H1-2018H2-2018H1-2019H2-2019H1-2020H2-2020H1-2021H2-2021H1-2022MIDSTREAMcontinuedSource:Gem and Jewellery Export Promotion Council(GJEPC)THE FIRST HALF OF 2022 FOR THE MIDSTREAMThe positive midstream demand continued into the

85、first two months of 2022 as US retailers restocked following the strong holiday season sales,leading to lower polished stocks over this period.The long-term trend for retailer stocks has seen reduced months of stock held by US independent retailers.Rough diamond sales remained robust in January and

86、February 2022.The positive supply and demand conditions continued to support polished price growth.Indias cutting and polishing industry remained at below full capacity,however,due to rough diamond shortages.The start of the Russia-Ukraine war at the end of February created a new environment in the

87、midstream.Secondary rough diamond trading and polished diamond trading softened,with polished inventory increasing as the midstream became uncertain regarding how retailers would scrutinise their purchases following US sanctions on Russia.The slowdown in China due to renewed Covid-19 lockdowns furth

88、er slowed polished diamond trading.Net rough diamond imports into India fell 31 per cent year-on-year in the first half of 2022 compared with a strong base in the first half of 2021.Net rough diamond imports were 14 per cent lower compared withthe first half of 2019.LOOKING AHEAD The short-term outl

89、ook depends greatly on thegeopolitical environment and potential associated impact on the diamond industry and the world economy.Driven by consumer preference,some brands and retailers have reportedly started asking their polished suppliers for assurances of diamond origin.We expect this trend to co

90、ntinue.For the longer-term outlook:Covid-19 has accelerated the transformation that was already underway in retail:increased omnichannel,personalisation,greater e-commerce sales and better inventory management.This shift has created a more efficient and healthy diamond pipeline and is expected to co

91、ntinue to deliver benefits over the longerterm.Sustainability and ethical consumerism arelikely to be considerations of growing importance for the midstream,as consumers become more environmentally and socially conscious.The Russia/Ukraine conflict and resulting sanctions are expected to accelerate

92、the transformation that was already underway around provenance and traceability.IMPORTEXPORTNET-IMPORTINDIA ROUGH DIAMOND TRADE(MCTS)10DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSUPSTREAMNotes:At the time of publishing,De Beers Group estimates for rough diamond produc

93、tion volumes for 2021(128 Mct8)were six per cent higher than the estimates in the Kimberley Process(KP)report for 2021(120 Mct13).The variance is likely due to differences in timings of data sourcing andreporting methodology.For example,in 2021,around one-third of the six per cent variance was due t

94、o a difference in the estimated production volumes from Russia.For 2021,ALROSA reported production of 32 Mctt10 and AGD Diamonds the only other keyproducer in Russia is estimated to have produced approx.5 Mct.The total output from Russia,based on ALROSAs reported actuals and AGD Diamonds production

95、estimate was lower than the KP figure,reported at 39 Mct.13 As De Beers Group production estimates have been continually updated(as and when producers and national statistics agencies published their production updates),the estimate could be updated at a different cadence than that of the KP and may

96、 include late reporting adjustments,which can lead to a discrepancy intotal production figures.Also,see note(i)below on confidence levels of De Beers Group estimates of artisanal and informal rough diamond production.GLOBAL PRODUCTION In 2021,rough diamond volumes produced by miners increased by app

97、roximately 11 per cent to an estimated 128 million carats(Mct)8,asproduction capacity recovered across theindustry following the Covid-19-related operational disruptions in 2020.The easing oflockdown measures,reopening of retail storefronts,and greater levels of personal savings(boosted by stimulus

98、packages in certain countries)led to a boom in consumer demand for diamonds towards the end of 2020 and accelerated the recovery of rough diamond production to meet this rebound in downstream demand.Following the closure of the Argyle mine in 2020,Rio Tintos output fell by over 10 Mct in2021.9 De Be

99、ers Group and ALROSA both reported production growth in 2021 the combined output of rough diamonds across the two producers grew around 10 Mct year-on-year.10 Arctic Canadian Diamonds Ekati mine returned to operation,which increased the miners production by an estimated 4 Mct in 2021.11 Petra Diamon

100、ds output remained flat against 2020,as the reopening of Williamson was delayed until the fourth quarter of 2021.12 Russia continued to be the largest producing country in volume terms for 2021,contributing an estimated 29 per cent of global output.Botswana was the second largest producing country,r

101、esponsible for approximately 18 per cent of volumes.ESTIMATED PRODUCTION BY COMPANY IN MCTSPRODUCTION2020 2021 1.DE BEERS GROUP25332.ALROSA30323.RIO TINTO1544.DOMINION DIAMOND365.CATOCA766.INFORMAL SECTOR18257.JUNIORS/ROW1722TOTAL114128PRODUCTION BY COUNTRY IN MCTSPRODUCTION2020 2021 1.RUSSIA34372.B

102、OTSWANA17233.CANADA13184.DRC13195.AUSTRALIA1106.ANGOLA897.SOUTH AFRICA896.ALL OTHERS1012TOTAL114128In 2021,global rough diamond production increased by an estimated 11 per cent year-on-year in volume terms.Rough diamond sales to cutting centres increased by an estimated 47 per cent year-on-year in U

103、S dollar terms as producers supplied into the strong rebound in demand from cutting centres by selling much of their surplus inventories.Notes:8 Figures for informal production remain at a lower level of confidence than other production figures due to data availability but could be updated if new in

104、formation becomes available9 Rio Tinto Quarterly Operations Review(Jan 2022)10 Q4&12M 2021 ALROSA Trading update(Jan 2022)11 Ekati to produce 4M carats in 2021 under new owners,Arctic Canadian Diamond(Jun 2021)12 Petra Diamonds H1 FY 2022 Trading Update(Jan 2022)13 Kimberley Process:2021 Global Summ

105、ary(Jun 2022)11DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSUPSTREAMcontinuedNotes:14 Okavango Diamond Company sales,by value,are included in the De Beers Group share of sales estimate as sales from Diamond Trading Company Botswana15 Sales values are based on De Beers

106、Group estimates where company reports are unavailable16 The United States Sanctions Major Russian State-Owned Enterprises(Apr 2022)17 ALROSA Sales Results(2022)18 Alrosa stands by plans to produce 34-35 mln cts of diamonds in 2022 and restore Mir mine(Jun 2022)19 Q2&6M 2021 ALROSA Trading update(Jul

107、y 2021)20 Ekati Eyes 5M Carats as Production Resumes(Mar 2021)21 Rio Tinto becomes sole owner of Diavik Diamond Mine(Nov 2021)22 Firestone Diamonds Q4 FY21 Quarterly Update(Mar 2022)ROUGH DIAMOND SALES TO CUTTING CENTRES Rough diamond sales to cutting centres rallied in 2021,as the easing of lockdow

108、ns and travel restrictions enabled downstream activity to resume at pre-pandemic levels from the second half of 2020.Sales to cutting centres had recovered strongly in the third and fourth quarters of 2020,with producers capitalising on the rebound in demand by selling much of the surplus inventory

109、that had built up during the earlier part of the year due to the global lockdowns that heavily restricted rough sales activity across the industry.This pattern continued into the first half of 2021 and,in anenvironment of high demand and limited supply of rough that was observed for most of 2021,rou

110、gh prices grew throughout the year.Overall,global rough diamond sales increased by an estimated 47 per cent in 2021.De Beers share of global rough diamond sales in US dollar terms grew to an estimated 33 per cent(29 per cent in 2020)14,while ALROSAs estimated share remained flat at 24 per cent(24 pe

111、r cent in 2020).15 SODIAM provided an estimated nine per cent of global rough diamond sales by value to cutting centres in2021(11 per cent in 2020).Rio Tinto contributed an estimated three per cent of global sales by value in 2021(four per cent in2020).2022 AND BEYOND In the first half of 2022,De Be

112、ers Group produced 17 Mcts a 10 per cent increase versus the first half of 2021 when production capacity had not yet fully recovered and was hampered by further Covid-19 outbreaks.InJuly 2022,De Beers Group reported an increase in its full-year 2022 production guidance,up from 30 to 33 Mct to 32 to

113、34 Mct,to help meet the robust levels of demand.Against the backdrop of sanctions imposed onRussian diamonds and ALROSA16 by some western nations,ALROSA ceased the reporting of operational results and sales activities as ofthe second quarter of 202217.However,in June of 2022,the company confirmed at

114、 the St.Petersburg Economic Forum that it remained committed to producing 34 to 35 Mct in 2022(as per published production guidance for theyear).18 Based on the companys normal seasonality of production,ALROSAs 2022 firsthalf production can be estimated at approximately 16 Mct(versus 15 Mct in 2021)

115、.19In terms of other notable changes in production expected in 2022,the Ekati mine is reportedly expected to produce around 5 Mct this year,increasing year-on-year production by 1 Mct.20 Also,after becoming the sole owner of the Diavik mine in the fourth quarter of 2021,RioTintos attributable produc

116、tion is expected to increase by around 2 Mct in 2022.21 Finally,Firestone Diamonds Liqhobong mine isexpected to be the only mine that has not reopened since being placed under care and maintenance at the onset of the pandemic in 2020 and is also expected to remain closed for the remainder of 2022.22

117、 Overall,global rough diamond production isnot expected to return fully to pre-Covid-19 levels in carat volume terms.The closure of the Argyle mine owned by Rio Tinto at the end of 2020 resulted in more than 10 Mct of annual production being removed from global supply;this mine alone accounted for a

118、pproximately 10 per cent of global production volumes in2020.Overall,global rough diamond sales increased by an estimated 47 per cent in 2021.12DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUS202020211122334109456781110121 1126789$16.4bnestimated51*1*UPSTREAMcontinuedNote

119、s:23 Angola:Projecto do Luaxe Anima Contestao a Ganga Jr.na ENDIAMA(Oct 2020)24 ALROSA Capital Markets Day 2021(Mar 2021)25 Preliminary Economic Assessment Chidliak Project(Aug 2017)26 Based on historical production at Ellendale Gem Diamonds puts sparkle back in Australias Ellendale mine(July 2008)2

120、7 Karowe Mine Underground Feasibility Study Technical Report(Dec 2019)28 Paul Zimnisky State of the Diamond Market(Aug 2022)i Rio Tinto Quarterly Operations Review(Jan 2022)While there are several diamond projects on the horizon that may be able to fill the gap to some extent,these are not expected

121、to reach full production in the near term.As the global economy grapples with a myriad of issues(such as the return of higher price of inputs,consumer price inflation,new Covid-19 waves and geopolitical challenges),there remains the potential for volatile demand from cutting centres.Looking beyond 2

122、025,several mines of the key producers(e.g.Diavik,Ekati,Nyurbinskaya and Almazy-Anabara)are expected to cease production by 2030.The closure of these operations ould represent a loss of 17 to 20 million carats of annual production,which represents approximately 16 per cent of global volumes in 2021.

123、28MAJOR NEW EXPECTED PROJECTS AND CLOSURES TO 2025NOTABLE NEW DIAMOND PROJECTS&EXPECTED DATE OF FULL PRODUCTION Luaxe(ALROSA/Endiama)Unspecified approx.8 Mct p.a.23 Maiskaya(ALROSA)2025 approx.2 Mct p.a.24Vodorazdelnye Galechniki(ALROSA)2026 less than 1 Mct p.a.24Chidliak(De Beers Group)Unspecified

124、1-2 Mct p.a.25 Ellendale(Burgundy Diamonds)2024 less than 1 Mct p.a.26Karowe Underground(Lucara Diamond),2026 less than 1 Mct p.a.27 MINES APPROACHING END OF LIFE Diavik(Rio Tinto)2025 approx.4 Mct produced in 2021i20202021ROUGH DIAMOND SALES TO CUTTING CENTRES(US$M)Source:De Beers estimates,Kimberl

125、ey Process statistics and company reports1.De Beers 1*.of which DTCB to ODC 2.ALROSA 3.Rio Tinto 4.Petra Diamond 5.Gem Diamond 6.Lucara 7.Stornoway 8.Firestone Diamonds 9.Mountain Province 10.SODIAM 11.Informal sector 12.Other13DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN F

126、OCUSILLUSTRATIONIN FOCUSBRINGING TRUSTED BRANDS TO NEW GENERATIONS IN A DIGITAL AGE15Introduction18Forces shaping a new diamond world18Trend 1 Values will underpinIndustry value22Trend 2 The rise of brands25Trend 3 Phygital retail is here to stay33Trend 4 Web3 and the metaverse arepotential game-cha

127、ngers40Conclusion14DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSTHE FUTURE IS ARRIVINGFor millennia,natural diamonds have been theultimate symbol of love,strength and connection between two people.This continues in modern times,with consumer desire for diamonds being i

128、ncredibly enduring in the main consumer markets around the world despite a range of recent global challenges.However,while the allure of diamonds continues unabated,how people interact with each other and with products and brands is changing and more rapidly than ever before.Social and technological

129、 change has been accelerated in recent years by the Covid-19 pandemic,geopolitical events and evolving societal attitudes as younger generations maketheir mark on the world.Many of the consumer trends the diamond industry has been observing and anticipating for some years the desire to shop more sus

130、tainably,wanting to know where and how diamonds are sourced and the preference for ecommerce have become an embedded part of the diamond acquisition journey.As a result,considerations such as provenance,brand anddigital presence now sit alongside traditional attributes of design,quality and price wh

131、en people choose diamonds.Expected developments in digital technology will further put consumers,wherever they arein the world,in control of how they research diamonds and interact with brands.A melding of the physical and digital worlds is now a way of life for most consumers.Smartphones have trans

132、itioned from a onceluxury product to an essential enabler inour daily lives,including in developing economies.In China,the number of smartphone users is expected to increase over the coming years from 670 million in 2020 to 1.3 billion by 202629.In India,the number of smartphone users in 2021 was 75

133、0 million and is estimated to reach one billion by 202630.This always connected lifestyle is most pronounced among Gen Z the next generation of digital native adultswho increasingly expect a seamless,personalised and even immersive brandexperience.So while it may be a given that a compelling omnicha

134、nnel marketing strategy is a must for any brand today,the emergence of Web3 and the metaverse and their until-now unimagined possibilities has the potential tobe a game-changer,presenting new opportunities and considerations for brands and retailers.INTRODUCTIONThe convergence and acceleration of th

135、ese trends place the diamond industry on the cuspof a new diamond world one which presents immense opportunity along with major implications for how brands and retailers must engage with current and future generations ofdiamond consumers.The key question for the diamond industry is:how to ensure the

136、 availability of transparent,trusted andsustainable branded offerings thatresonate with new generations inan increasingly digital world?This report seeks to explore that question andshare insights to assist diamond trade participants in adapting to the forces shaping the new diamond world so that di

137、amonds maintain and grow their place as enduring symbols of celebration and connection.Indoing so,it provides an analysis of four separate but interconnected megatrends thatwill have fundamental implications for theindustrys future.Notes:29 China:smartphone users 2026|Statista30 Deloitte study quote

138、d in:Deloitte:India to have 1 billion smartphone users by 2026:Deloitte The Economic Times()SMART PHONE USERS IN CHINA 1.3bnThe number of smartphone users in China is expected to increase to 1.3 billion by 2026,up from 670 million in 2020 15DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN

139、DASHBOARDIN FOCUSConsumers increasingly prioritise sustainability and ethics alongside traditional attributes of design,quality and price when choosing diamonds and are prepared to pay a premium for ethical assurances.Jewellers and brands that effectively communicate their ethical credentials will b

140、e best placed to drive value differentiation.Branded diamond jewellery,which canact as a shortcut to trust and differentiation for consumers,has been steadily capturing market share and today accounts for the majority of purchases in both the US and China.With Gen Z being the generation most likely

141、to buy branded diamond jewellery,the power of a trusted brand is only set to increase.The Covid-19 pandemic rapidly accelerated the share of online purchases of diamond jewellery,which accounted for a quarter of all US acquisitions by value in2021.But it is a compelling and seamlessly integrated mer

142、ging of physical and digital channels phygital that consumers most desire when researching and buying diamonds and retailers that invest in their omnichannel offerings will reap most rewards.While an omnichannel strategy is a must for any brand today,the arrival of Web3 and the metaverse has the pot

143、ential to be a game-changer which opens up new revenue,customer acquisition and brand opportunities but also new considerations for diamonds and theluxury sector more broadly.INTRODUCTIONcontinuedRead more on page 2532Read more on page 3339Read more on page 2224Read more on page 1821VALUES WILL UNDE

144、RPIN INDUSTRY VALUETHE RISE OF BRANDSPHYGITAL RETAIL IS HERE TO STAYWEB3 AND THE METAVERSE ARE POTENTIAL GAME-CHANGERS16DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSINTRODUCTIONcontinuedIn analysing these trends,it is clear the younger generations,namely Millennials an

145、d Gen Z,are the driving forces shaping the new diamond world.While Millennials represent the largest cohort of diamond buyers today,it is the even younger Gen Z that will shape the industrys future.Understanding the preferences and attributes of Gen Z who desire and aspire to own diamonds but who ex

146、pect to engage with the category in vastly different ways to previous generations is essential for all industry participants.UNDERSTANDING GEN Z A NEW GENERATION OFNATURAL DIAMOND CONSUMERS For the purposes of this report,Gen Z refers to adults born from 2000 onwards in the US or from 1998 in China.

147、Gen Z is the next major generation of potential diamond acquirers and is expected to have a profound impact on the diamond industry as it comes of age.As such,in exploring the fourmegatrends presented in this report,adedicated lens has been placed on GenZto understand the unique perspective and infl

148、uence of this group.The insights are designed to help trade participants fully capture the opportunities presented by GenZas it matures.As the generation is still very young,the research findings presented in this report include only Gen Zs oldest members.In the US,this accounts for five per cent of

149、 the adult(18 74)female population and the same proportion of diamond jewellery acquirers although represents only two per cent of diamond acquisitions by value,as the generations young age means its diamond spend is still below average.In China,where the adult market for diamonds is considered 18to

150、 54,Gen Z accounts for 10 per cent of the population and five per cent of diamond acquisitions by both volume and value.But this contribution will increase significantly in the years to come,underpinned by the current positive attitudes of Gen Z towards diamonds.De Beers Group has worked with specia

151、lised agencies and undertaken surveys with Gen Z to understand what motivates them.This work found that unique traits of Gen Z adults are thatthey tend to be self-expressive,competitive and optimistic.Entrepreneurship and personal achievement are important to them31.They are more likely than other g

152、enerations to aspire to diamonds as a mark of success(60 per cent versus 54 per cent overall),with nearly two inthree(64 per cent)seeing diamonds as an attribute of personality strength compared with an average among all consumers of alittle over a half(56 per cent).Diamond marketers should look to

153、communicate this symbolism ofdiamonds when engaging withGen Z.Another very important,even defining,characteristic of Gen Z is their relationship withthe digital world.As digital natives who have grown up in a world where technology isa way of life,they expect full integration of physical and digital

154、(i.e.phygital)when they shop and interact with brands.These are tomorrows big spenders.While GenZ accounted for only four per cent of luxury purchases in 2020,by 2035 its share could grow to 40 per cent.32 It is therefore critical for retailers and brands to capture thehearts and minds of this gener

155、ation.Not es:31 This was discussed in more detail in the 2018 Diamond InsightReport In Focus section:The Future of Diamond iswith Millennials and Gen Z available on https:/ https:/ NUMBERS SELF-EXPRESSIVE,COMPETITIVE AND OPTIMISTIC ARE DEFINING TRAITS OF DIGITALLY-NATIVE GEN Z60%Gen Z are more likel

156、y to aspire to diamonds as a mark of success compared with other generations 60%vs 54%overall64%64%of Gen Z see diamonds as an attribute of personality strength compared with 56%of all consumers40%By 2035,Gen Z could make up 40%of luxurypurchases,up from 4%in 2020Another very important,even defining

157、,characteristic of Gen Z is their relationship withthe digital world.17DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSFORCES SHAPING A NEW DIAMOND WORLDConsumers are increasingly conscious ofthe environmental and social ramifications of their purchases the impacts on pla

158、net and people.Values are becoming the new markers of status in luxury as consumers seek toalign their purchases with products and brands that signal to the wider world their own values and priorities.Where previously a products origin(French champagne,Italian leather)was the marker of status and va

159、lue,increasingly,it is how products are sourced and what a brand stands for that are driving value differentiation33.This presents an immense opportunity for the diamond industry.With its decades-long track record of creating meaningful and lasting socioeconomic benefits for the people and places wh

160、ere diamonds are discovered,the industry has a compelling platform on which toengage with a new generation ofconsumers whose priorities extend beyond the traditional considerations of price,quality and design.VALUES WILL UNDERPIN INDUSTRY VALUETREND 1Not es:33 Why where and how matter,De Beers Group

161、 Diamond Insight Flash Report,November 2021 https:/ INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSFORCES SHAPING A NEW DIAMOND WORLDcontinuedThe 2021 Diamond Insight Report took a deep dive into how sustainability and ESG factors were influencing consumer purchase decisions whe

162、n it came to diamonds.In that report,De Beers research conducted across seven consumer markets for diamonds found that when it came to making a purchase,jewellery was ranked only after food and clothing as the category where consumers most often consider sustainability.It also found that Millennials

163、 were the generation most engaged in sustainable purchasing,with just under 70 per cent reporting they had opted to buy a responsibly sourced product in the past five years and 30 per cent reporting they had done so for jewellery specifically.Gen Z followed closely behind when it came to purchasing

164、sustainable products in general(at 65 per cent);however,they were less engaged insustainable jewellery(at 21 per cent)34.This lower level of engagement compared with Millennials is likely due to Gen Zs nascence asdiamond consumers who have not yet fully engaged with the category.While these trends a

165、lone should signal a changing tide in consumer preferences,perhaps most telling was that 84 per cent of consumers in the study reported they had paid more for the environmentally and socially responsible jewellery they bought.Among GenZ this proportion was 77 per cent.Focusing on diamonds specifical

166、ly,the 2021 study showed that 58 per cent of all consumers globally would prefer a diamond produced ina socially and environmentally responsible way,with a similar proportion of 59 per cent for Gen Z.Among those making the sustainable choice,85 per cent overall and 92per cent among Gen Z were willin

167、g to paya premium for the sustainable diamond.TREND 1 VALUES WILL UNDERPIN INDUSTRY VALUENEW RESEARCH REINFORCES THE DESIRE FOR SUSTAINABILITY AND ETHICAL ASSURANCESNew research commissioned by De Beers Group in 2022 among more than 18,000 USwomen reinforces that sustainability considerations remain

168、 top of mind for consumers and are having tangible impacts on their purchasing decisions.This latest research also highlighted that,beyond environmental and social sustainability,trusting ethical business practices behind a diamonds journeyto retail is increasingly important.More than one-third of w

169、omen(36 per cent)specifically look into the ethical credentials ofthe diamond jewellery brands they are considering purchasing and around half(51per cent)say they would not buy diamonds ifthey knew they were not ethically sourced.Inaddition,40 per cent of women say thatknowing about the positive imp

170、act of diamonds on local mining communities would make them more likely to buy diamonds35.As might be expected,these concerns are not evenly spread across age groups:it is younger consumers who are driving the demand for more transparency and integrity.Compared with older generations,Gen Z and Mille

171、nnials are more likely to research the ethical credentials of the diamond jewellery brands they would consider buying and are more likely to buy diamonds if they are informed oftheir positive impact36.Notes:34 De Beers commissioned study Consumers and Sustainability in the Diamond Industry,2021,cond

172、ucted in the US,China,India,UK,France,Italy and South Africa35 De Beers commissioned Diamond Acquisition Study USA 2022.36 De Beers commissioned Diamond Acquisition Study USA 20223rdJewellery ranks 3rd,after only food and clothing,asthe category where consumers most often consider sustainability fac

173、tors30%of Millennials have bought jewellery with responsible sourcing credentials in the past fiveyears58%of consumers would prefer diamonds produced ina socially and environmentally responsible way.Of those,85%overall and 92%among Gen Z are willing to pay a premiumA RECAP OF THE FINDINGS OF THE 202

174、1 DIAMOND INSIGHT REPORTINDUSTRY INSIGHT19DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSYOUNGER CONSUMERS ARE MORE LIKELY TOSEEK OUT ETHICAL ASSURANCES WHEN BUYING DIAMONDSReassuringly for the diamond industry,a considerable proportion of consumers already understand th

175、at diamonds benefit the nations where they are sourced and processed.In the US,this accounts for 49 per cent of women overall,while awareness is higher among Gen Z(52 per cent)and Millennials(53 per cent)37.However,these findings also demonstrate thereis significant opportunity for the diamond indus

176、try to further reinforce its ethical and sustainability credentials to consumers throughprominent and digestible information,both in-store and online.When it comes to the specific ESG factors that play a role in consumers choice of diamond brands,the two most influential factors for women in the US

177、are preserving wildlife around diamond mines and sourcing from conflict-free zones.Nearly two in five women(39 per cent)gave these considerations their highest importance rating.In China,just over one in five women(22 per cent)place a top influence on ethical and ESG factors(e.g.worker welfare,impac

178、t on the environment andtransparent supply chain)when choosing diamond brands.For Gen Z,this is even morerelevant with 28 per cent ranking it astheir most important consideration.Notes:37 De Beers commissioned Diamond Acquisition Study USA 2022In Numbers:Agreement with statementsSource:De Beers comm

179、issioned Diamond Acquisition Study USA 2022KNOWING ABOUT THE POSITIVE IMPACT OF DIAMONDS ON LOCAL MINING COMMUNITIES WOULD MAKE ME LIKELY TO BUY MORE DIAMONDSI LOOK INTO THE ETHICAL CREDENTIALS OF THE DIAMOND JEWELLERY BRANDS ICONSIDER BUYINGFORCES SHAPING A NEW DIAMOND WORLDcontinuedWhen it comes t

180、o the specific ESG factors that play a role in consumers choice of diamond brands,the two most influential factors for women in the US are preserving wildlife around diamond mines and sourcing from conflict-free zones.TREND 1 VALUES WILL UNDERPIN INDUSTRY VALUEYOUNGER CONSUMERS ARE MORE LIKELY TO SE

181、EK OUT ETHICAL ASSURANCES WHEN CHOOSING DIAMOND JEWELLERY BRANDS50%Gen Z47%Millennials40%Average39%Gen Z41%Millennials36%Average20DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSTHE PROVENANCE IMPERATIVEProvenance has been a focus for the diamond industry for almost two d

182、ecades,beginning with the Kimberley Process(KP)in 2003,designed to stem the flow conflict diamonds around the world.Since then,the Best Practice Principles(BPPs),introduced by De Beers Group,went beyond the KP protocols to require compliance with a broader set of ethical,financial and governance bes

183、t practice standards for the companys supply chain;and in 2005,the Responsible Jewellery Council(RJC)was established,creating a similar set ofstandards(the RJC Code of Practices)foritsmembers across the entire jewellery value chain.The evolution of social concerns has increased the number of consume

184、rs who want assurance about the impact their diamond has made on people and planet.While it has long been common for purchasers to request grading certificates for the size and quality of a diamond(39 per cent of pieces acquired byUS women in 2021),there is a gathering momentum of requests for certi

185、ficates of diamond origin,with 27 per cent of new diamond acquisitions coming with such certification in 202138.The conflict in Ukraine has further heightened interest in provenance.The consumer response to US sanctions on diamonds of Russian origin shows that one in five Americans are now more like

186、ly to look for the origin of diamonds and about one in 10 are more likely to buy diamond jewellery from reputable brands39.Government sanctions,together with a shift in retailers sourcing approaches,have made source assurance a rapidly increasing priority for many retailers.Fortunately,the diamond i

187、ndustry has been developing provenance programmes for several years,often enabled by new technologies such as blockchain.Such programmes can give retailers and consumers the confidence they require.Beyondassurance of origin,provenance programmes can also inform consumers about the positive impact th

188、eir diamond has helped create on itsjourney to them.In doing so,diamond jewellery brands have a significant opportunity to respond to the consumer desirefor this information and drive value differentiation bybringing a diamonds story tolife through digitally enhanced storytelling.As encapsulated by

189、Marc Jacheet,CEO De Beers Brands,“In the next decade,the 4Cswill be complemented by the 3Ps provenance,purpose and partnership.Where provenance becomes key both as a sign ofquality and through end-clients wanting toknow they are part of a story that creates positive impact for people and the planet.

190、”Notes:38 De Beers commissioned Diamond Acquisition Study USA 202239 De Beers OnePulse surveys conducted in five waves since January 2022 among 500 US men and women aged 16-54 with household incomes of US$25k+in each waveUNDERPINNING TRUST DE BEERS CODE OF ORIGIN AND TRACRThe De Beers Code of Origin

191、 is a synonym totrust for diamond end-clients,providing assurance that their diamond is natural and was discovered by De Beers in Botswana,Canada,Namibia or South Africa,whereithelped provide jobs,healthcare andeducation.Supported by digitally-enhanced storytelling,it also confirms that adiamond has

192、 been responsibly sourced in line with De Beers Groups stringent ethical standards and has made a positive impact on people and the planet through the companys Building Forever sustainability commitments.The Code itself is a unique customised codeinscribed on the table of a diamond,which is invisibl

193、e to the naked eye.Supplementing Code of Origin is Tracr,De Beers Groups innovative diamond traceability platform and the worlds only distributed diamond blockchain that starts atthe source and provides tamper-proof sourceassurance at scale.With more people wanting to know the source of the products

194、 they acquire,the deep meaning associated with a diamond purchase requires a technological step-change to meet their expectations.The Tracr platform combines distributed ledger technology with advanced data security and privacy so that users have control over their own data.In addition,the decentral

195、ised nature of the platform ensures itsspeed and scalability,with the ability toregister one million diamonds a week.Tracrhas twice been named by Forbes as oneofits50 leading blockchain solutions.FORCES SHAPING A NEW DIAMOND WORLDcontinuedTREND 1 VALUES WILL UNDERPIN INDUSTRY VALUE21DIAMOND INSIGHT

196、REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSFORCES SHAPING A NEW DIAMOND WORLDcontinuedNotes:40 De Beers commissioned Diamond Acquisition Study US 202241 De Beers commissioned Diamond Acquisition Study China 202142 De Beers commissioned Diamond Acquisition Study US 202243 De Beers co

197、mmissioned Diamond Acquisition Study China 2021Brands play a powerful role for consumers when it comes to diamonds.Trusted brands can give consumers the quality and provenance assurance they often seek while also being an expression of uniqueness and personal values.So,its perhaps unsurprising that

198、brands have been taking an increasing share ofall diamond jewellery sales over time.The popularity of brands in diamond jewellery and diamonds continues to rise.Asked whether the diamond jewellery acquired in 2021 was branded or unbranded,US consumers say that two-thirds of all diamond jewellery acq

199、uisitions were branded.This is double the proportion seen in 2015 and represents almost 80 per cent of womens diamond jewellery sales by value40.In China,brands accounted for an even higher proportion of acquisition value,at85 per cent in 2020.Once again,Gen Z is a driving force behind this trend41.

200、Three-quarters of diamond jewellery purchases in the US in 2021 by Gen Z were branded,compared with two-thirds for Gen X and only alittle more than one-third for Baby Boomers42.In China,brands represented 79 per cent of diamond jewellery pieces purchased by GenZ43.TREND 2THE RISE OF BRANDS22DIAMOND

201、INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSBRANDED ACQUISITION IN THE US,2015-2021(self-claimed,%of acquired diamond jewellery pieces)BRANDED ACQUISITION IN THE US BY GENERATION,2021(%of acquired diamond jewellery pieces)FORCES SHAPING A NEW DIAMOND WORLDcontinuedMarc Jachee

202、t,CEO De Beers Brands,believes we are seeing an evolution when it comes to diamonds,moving from the diamond as the category to the diamond as the brand.“Brands create desirability and communicate an outstanding idea of quality,”he said.Hestates that desirable brands should:Create stories to immerse

203、the end client inthe brands DNA and heritage Create aspirations by providing a vision ofbeauty and making the end client feel acertain way Excel in design Continually innovate.This trend of growth in branded diamond jewellery is only set to continue,as it is underlined by the fact it is the younger

204、generations who most acquire branded products.Brands are more important to the younger generations as they contribute to theirsense of self-worth and desire to express individuality.The importance of brands toGenZ in helping them build their own personal brand as part of their individualistic and co

205、mpetitive nature was discussed in more detail in the 2018 Diamond Insight Report.Since the younger generations tend to highly prioritise issues of climate change and social justice,acquiring brands espousing such values can enhance their own personal brand.TREND 2 THE RISE OF BRANDSSource:De Beers c

206、ommissioned Diamond Acquisition Study USA 2022BRANDEDUNBRANDEDDONT KNOW1001001001002015201720192021In value=79%BRANDED VS UNBRANDED DJ(IN PIECES)332541342541422533651223Gen ZMillennialsGen XBoomersBRANDED VS UNBRANDED DJ(IN PIECES)76 32172101864112538214123DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAM

207、OND VALUE CHAIN DASHBOARDIN FOCUSFORCES SHAPING A NEW DIAMOND WORLDcontinuedTREND 2 THE RISE OF BRANDSIN NUMBERS THE RISE OF BRANDS74%of pieces acquired by high-income(US$150k+)US women are claimed to be brandedBRANDED(NET)PIECESVALUEBRIDAL62%76%GIFTING61%73%SELF-PURCHASING73%87%Source:De Beers comm

208、issioned Diamond Acquisition Study US 2022AFFLUENT AND SELF-PURCHASING CONSUMERS ARE MORE LIKELY TO BUY BRANDED DIAMOND JEWELLERYDiamond brands are more sought after by high-income consumers than others.In the US,nearly three-quarters(74 per cent)of diamond jewellery acquisitions by women with incom

209、es of$150,000 or more were branded,compared with an average of nearly two-thirds(65 per cent)for all income categories44.Among the different reasons for purchase bridal,gifting or self-purchase it was the self-purchase category where brands were most prized,accounting for 73 per cent ofacquisitions4

210、5.InChina,the majority ofbrand acquisitions were those of Chinese retailers(66 per cent by volume),with international brands representing seven per cent and other brands 12 per cent47.If brands are now established as key drivers ofdiamond jewellery selection,what can wediscover from the methods that

211、 consumers use to conduct their research and make theirpurchase?LOCAL AND INDEPENDENT BRANDS ARE GAINING SHAREWhile there is a clear difference between acquisitions of branded and non-branded products,there are also some noteworthy distinctions within the branded category overall.In the US,the small

212、er US local designer and retailer brands most increased their growthbetween 2019 and 2021,reaching a30 per cent share of acquired pieces.Thiscompares with a share of 17 per cent for the international luxury diamond jewellery brands(the likes of Cartier and Bulgari)and 13per cent for the internationa

213、l designer brands(the likes of Gucci and Chanel)46.If brands are now established as key drivers ofdiamond jewellery selection,what can wediscover from the methods that consumers use to conduct their research andmake theirpurchase?Notes:44 De Beers commissioned Diamond Acquisition Study US 202245 De

214、Beers commissioned Diamond Acquisition Study US 202246 De Beers commissioned Diamond Acquisition Study US 202247 De Beers commissioned Diamond Acquisition Study China 202124DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSFORCES SHAPING A NEW DIAMOND WORLDcontinuedOne of t

215、he key trends resulting from the Covid-19 pandemic was an acceleration of consumer willingness to purchase diamond jewellery online.Even before the pandemic,consumers widely used online to research their diamond acquisitions,but the reality of lockdowns gave a strong impetus toonline buying.In 2021,

216、online sales of diamond jewellery in the US reached 25 per cent by value and 31 per cent by volume,compared with 14 per cent and 18 per cent respectively in 2015.PHYGITAL RETAIL IS HERE TO STAY TREND 325DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSNotes:48 De Beers com

217、missioned Diamond Acquisition Study US 202249 De Beers commissioned Diamond Acquisition Study US 202250 De Beers commissioned Diamond Acquisition Study US 2022Source:De Beers commissioned Diamond Acquisition Studies US 2016-2022FORCES SHAPING A NEW DIAMOND WORLDcontinuedOf the 31 per cent of online

218、sales by volume,online acquisition was higher than average among Gen Z acquirers(42 per cent of acquisitions inthis group),self-purchasers(40per cent)andsingle women(37 per cent)48.In addition,about half(54 per cent)of online acquisitions in the US were made by people buying diamond jewellery for th

219、e first time49.While this is likely to have been driven by the Covid-19-related store closures,it also indicates a growing acceptance of and trust in diamond jewellery e-commerce.While the average value of pieces purchased online in the US increased by a significant 17per cent from 2019 to 2021,this

220、 still lagged behind offline where the increase inaverage value was 50 per cent 50.However,despite the majority of diamond jewellery purchases by both value and volumestill taking place in-store,online is anincreasingly critical part of the diamond acquisition journey,especially when it comes to res

221、earching designs and brands and particularly among the younger generations.This combined use of physical and digital channels in consumer purchasing patterns known as phygital isa defining feature of thenew diamond world,where a dedicated and compelling omnichannel strategy is business-critical.ONLI

222、NE SALES OF DIAMOND JEWELLERY CONTINUED TO GAIN MARKET SHARE IN 202125%of diamond jewellery sales by value were made online in the US in 202154%of online acquisitions in the US were made by people buying diamond jewellery for the first time 01000100010001002015201720192021VALUE SHARE8614782277237525

223、01000100010001002015201720192021VOLUME SHARE8280776918202331TREND 3 PHYGITAL RETAIL IS HERE TO STAYIN STOREONLINESHARE OF ONLINE DIAMOND JEWELLERY ACQUISITIONS IN THE US,2015-2021(%OF RETAIL VALUE)26DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSNotes:51 Gartner,Brave Ne

224、w Worlds:Tapestry of Trends 2022 By Gartner Futures Lab,202152 Ibid53 De Beers commissioned Diamond Acquisition Study USA 202254 Mastercard,SpendingPulse US Executive Data August 202255 The term acquisition is used in the research and in this report to signify diamond jewellery purchasing by women f

225、or themselves or receipt by women of diamonds as a gift56 De Beers commissioned US Diamond Acquisition Studies 2016-2022FORCES SHAPING A NEW DIAMOND WORLDcontinuedGartner forecasts a potential increase in totalrevenues of 20 per cent by 2025 for organisations offering a unified commerce experience b

226、y seamlessly moving customers through journeys51.The short-term impacts ofthis approach are expected to be a more robust remote customer experience and,on that basis,creation of new digitally enhanced physical customer experiences.To help achieve this,organisations may consider making digital the de

227、fault experience and remote the default delivery model.The digital remote experience will need to be enhanced and extended into the physical space52.THE PREFERENCE FOR ONLINE IS NOT JUST APANDEMIC-ERA TRENDThe question facing retailers as the world started coming out of lockdowns was:is onlineshoppi

228、ng for diamonds here to stay?Latest research53 shows that the answer is yes.Looking at the broader jewellery category in the US,Mastercard SpendingPulse data for the past four years shows that online purchasing of jewellery in the eight months to August 2022 reached 37 per cent of all jewellery stor

229、e sales,slightly above the 2020 full-year share of 36 per cent and well above 2019s pre-pandemic level of 25 per cent54.It can beexpected that holiday gift purchases during the last two months of 2022 will see this share increase further.But regardless of whether the ultimate purchase is made in-sto

230、re or online,natural diamond jewellery acquisition increasingly includes adigital journey,with about half(49 per cent)of all acquisitions55 now researched online compared with around three in 10(29 per cent)in 2015.ONLINE RESEARCH IS AN INCREASINGLY IMPORTANT PART OF THE DIAMOND ACQUISITION JOURNEY4

231、9%of all diamond jewellery purchases in the US are now researched online(vs 29%in 2015)HISTORICAL TREND56%PIECES RESEARCHED ONLINE201529%201730%201937%202149%Source:De Beers commissioned Diamond Acquisition Studies US 2016-2022TREND 3 PHYGITAL RETAIL IS HERE TO STAYThe question facing retailers as t

232、he world started coming out of lockdowns was:is online shopping for diamonds here to stay?27DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUS18%17%16%14%14%13%13%13%13%13%12%11%11%9%9%8%Visit jewellery stores to see range of optionsOnline to pre-select designs likedOnline

233、to find a jewellerOnline for diamond characteristics/specificationOnline to learn about diamond pricing&valueSocial media for ideas and opinionsAd for diamond jewellery that caught attentionTalk to friends/familySocial media looked up the brandAdvice from preferred jewellerAd for brand that caught a

234、ttentionOnline to find out about diamond sourcingMagazines for ideasSocial media saw influencer/celebrity wearing a jewellery pieceArticle written about a piece of diamond jewellery Email from retailer FORCES SHAPING A NEW DIAMOND WORLDcontinuedTREND 3 PHYGITAL RETAIL IS HERE TO STAYSource:De Beers

235、commissioned Diamond Acquisition Study US 2022RESEARCHING THE DIAMOND JEWELLERY ACQUISITIONJEWELLERY RESEARCHThe following table illustrates the different methods consumers use to research diamond jewellery.While 18 per cent of pieces are researched byvisiting physical jewellery stores,this is now v

236、irtually on par(17 per cent)with using the internet to select diamond jewellery designs,showing just how important it is for jewellers topresent their range online,as well as offline.For one in six pieces(16 per cent)acquired,the purchaser even uses an online search tofind a jewellery store57,highli

237、ghting the importance for retailers to maintain a well-managed internet presence,not only with optimised search results,but with a variety ofdesigns on show,as well as having their sustainability credentialspositioned front andcentre.THE PHYGITAL RETAIL EXPERIENCEWhat does this mean for the traditio

238、nal retail experience?As many as six in 10 online shoppers(60 per cent)are happy to buy diamonds online without seeing the physical product,but for 54 per cent of consumers58,the possibility of seeing the product in-store gives them greater confidence to buy online.This point is reinforced when we c

239、onsider the split between the use of physical and digital in the complete shopping journey,from research to acquisition.While two in five consumers still solely use the traditional method of researching and buying in-store,onein five consumers now uses only digital forboth parts of the process,and t

240、wo in five use a mix of physical and digital phygital.We can expect the move towards greater useof digital to increase further in the coming years,emphasising the need for brands andretailers to recognise thatomnichannel marketing is a must.In China,the picture is similar,albeit on a smaller scale.U

241、sing digital to conduct research of diamond jewellery before acquisition increased from one in four(25 per cent)in 2018 to two in five(39 per cent)in 202059.Online acquisition has grown in China too butremains much lower than in the US:it stands at four per cent in 2022,compared with one per cent in

242、 201660.There is every reason to believe that this trend will not only continue butgather pace.Notes:57 De Beers commissioned Diamond Acquisition Study USA 202258 De Beers commissioned Diamond Acquisition Study USA 202259 De Beers commissioned Diamond Acquisition Study China,202160 De Beers commissi

243、oned Diamond Acquisition Studies China,2019-2021PHYSICALDIGITAL28DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSNotes:61 De Beers commissioned Diamond Acquisition Study USA 2022RESEARCHED IN STORERESEARCHED ONLINEFORCES SHAPING A NEW DIAMOND WORLDcontinuedWhen tailoring

244、their online offer,jewellers need to be aware that in 2021,half of onlinediamond jewellery acquirers in the US(50 per cent)were aged 18 to 34 andmore than half(54 per cent)already owned several pieces of diamond jewellery.61 This means that the online offer needs to include a good range of designs a

245、nd brands which will appeal to a young audience,manyof whom already have a richdiamond jewellery box and are looking foruniqueness.The success of an online retail offer also depends heavily on the retailers ability to deliver the product quickly nearly half(47per cent)of online acquirers claim they

246、buy online only if the piece is available in stock to be delivered within a week.61 Consequently,retailers need to ensure that the purchase and shipping service they offer online is every bit asgood as its in-store counterpart.The importance of an integrated physical and digital retail strategy was

247、recently highlighted by Signet Jewelers CEO,Virginia C.Drosos,inthe companys earnings call for the secondquarter of 2023,where she said:“Ourconnected commerce presence ensures that we are uniquely able to meet our customers needs whenever,wherever and however they want to engage.Relevance plus readi

248、ness is apowerful combination.”TREND 3 PHYGITAL RETAIL IS HERE TO STAY51%49%40%Purchased in physical store30%Purchased in physical store1 1%Purchased online19%Purchased onlineRESEARCHING AND BUYING DIAMONDS INCREASINGLY INVOLVES A PHYGITAL APPROACHSource:De Beers commissioned Diamond Acquisition Stu

249、dy US 202229DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSAFTER NATIONAL JEWELLERY CHAINS,ONLINE-ONLY RETAILERS ACCOUNT FOR THE MAJORITY OF GEN Z PURCHASESWhile 30 per cent of diamond jewellery pieces were purchased online in the US in 2021,only four per cent of total p

250、urchases were through online-only retailers.However,for Gen Z,it was 16 per cent of pieces,indicating what the future holds for this channel as the youngest generation grows in maturity and comes of age as diamond buyers.The only other retail channels ahead of pure online for Gen Z were the national

251、 chains,such as Zales and Kay(21 per cent of acquired pieces)62.FORCES SHAPING A NEW DIAMOND WORLDcontinuedTREND 3 PHYGITAL RETAIL IS HERE TO STAYGEMIST:A DIGITAL-FIRST FINE JEWELLERY BRAND Notes:62 De Beers commissioned Diamond Acquisition Study USA 2022INDUSTRY INSIGHTGemist CEO and founder,Madeli

252、neFraser,was spurred to create Gemists unique digital fine jewellery offering when shopping for her ownengagement ring.As a digital consumer and tech start-up founder,buying online was her natural first instinct.However,in attempting to do so,it soon became apparent that the offering she was seeking

253、 one which also enabled personal customisation was not readily available.Gemist was born to capitalise on this opportunity,as an online-only brand which also offers customisation and a try before you buy option where clients receive a replica of their chosen design prior to purchase.As Millennials a

254、nd Gen-Z consumers make their mark,more jewellery sales are moving online.According to McKinsey,the global fine jewellery category is predicted to be valued at$340 billion by 2025,with up to 21 per cent of sales coming from online channels.However,a significant statistic that goes up with the increa

255、se in online shopping is the rate of returns as customers are unable to see and feel what they purchase.In a recent Forbes interview,Fraser commented:“We know that 85 per cent of todays modern consumers expect customisation and 71 per cent want to try before they buy.Its common inother industries li

256、ke fashion and eyewear,soit makes perfect sense when it comes to rolling these experiences into jewellery.”The brands trial service has proven popular with younger couples shopping for their engagement rings and has even facilitated new proposal experiences where the proposer orders a try-on box and

257、 proposes with three options,following which both partners design the ring together.Further,return rates have reduced to under two per cent and Gemist has also seen a 2.5 times higher average order value when clients engage in the try-on experience.Onthe back of this success,Fraser said:“We will con

258、tinue to expand our product offerings,roll out exciting partnerships withdesigners to enable this unique functionality on their sites and create evenmore advanced digital experiences forour consumers.”30DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSGEN Z AND MILLENNIAL

259、ONLINE RESEARCH PREFERENCESYounger generations tend to use online methods for diamond jewellery research more than older consumers.For example,in China,as many as half(49 per cent)of the total pieces acquired by Gen Z consumers are researched online,compared with an average of two in five(39 per cen

260、t)pieces for all consumers63.Gen Z consumers in China are particularly likely to conduct research via social media buttend to use shopping sites and apps less than Millennials64.US Millennials are the biggest users of online and social media for researching diamond acquisition three in five(58 per c

261、ent)of the pieces they acquire are researched this way65.This indicates a trend toward greater use of social media for diamond jewellery research in the future,andretailers will need to prepare for this.GEN-Z ARE MORE LIKELY TO RESEARCH VIA SOCIAL MEDIA:26%(MILLENNIALS:13%)YOUNGER MILLENNIALS(24-30)

262、ARE MORE LIKELY TO RESEARCH VIA SHOPPING SITES:8%(GEN-Z:2%)DIAMOND JEWELLERY ACQUISITIONS RESEARCHED ON SOCIAL MEDIADIAMOND JEWELLERY ACQUISITIONS RESEARCHED VIA SHOPPING SITES/APPS12%6%Source:De Beers commissioned Diamond Acquisition Study China,2021FORCES SHAPING A NEW DIAMOND WORLDcontinuedTREND

263、3 PHYGITAL RETAIL IS HERE TO STAYIN CHINA,GEN-Z ARE MORE LIKELY TO RESEARCH VIA SOCIAL MEDIA WHILE MILLENNIALS ARE MORE LIKELY TO USE SHOPPING SITES4%JD9%The Red4%Weibo4%Tmall7%Douyin3%Taobao6%Wechat momentNotes:63 De Beers commissioned Diamond Acquisition Study China,202164 De Beers commissioned Di

264、amond Acquisition Study China,202165 De Beers commissioned Diamond Acquisition Study USA 202231DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSONLINE BUYING IS HERE TO STAY68%of online buyers intend to continue buying diamond jewellery online in the futureGen Z consumers

265、are particularly likely to use a digital search to preselect a design,with 23per cent of pieces acquired this way.What is more,they are more likely than others to say that a reason for not acquiring diamonds is a lack of appealing designs66.This emphasises areal opportunity for retailers to engage b

266、etter with Gen Z by understanding their preferred design choices and placing them clearly on their websites and social media platforms.CONSUMERS SPEND MORE OFFLINE THAN THEY DO ONLINE Despite this upward trend in the use of digital channels,however,it remains the case that consumers tend to spend mo

267、re on average when they purchase offline.In the US,the average online sale was$2,204 in 2021,compared with an average of$2,994 for diamond jewellery bought in-store.And this gap has increased since 2019.67 In China,there was a similar gap with an average value of RMB7,400(approx.US$1,100)online,comp

268、ared with an offline average price of RMB9,500(approx.US$1,400).66 This may indicate that consumers buying diamonds of particularly high value still favour seeing and touching them first for the full experience;but as the trust in e-commerce grows,this gap may shrink.THE FUTURELooking to the future

269、of online diamond jewellery sales in the US,over two-thirds of online acquirers(68 per cent)intend to continue buying diamond jewellery online,as they are quite comfortable with this channel.67 The proportion of online purchases of diamondjewellery remains much larger than pre-pandemic and is a feat

270、ure thats here to stay.Acompelling,user-friendly and seamlessly integrated omnichannel experience is therefore essential for all diamond jewellery brands and retailers to meet the needs of their end-clients inthe new diamond world.FORCES SHAPING A NEW DIAMOND WORLDcontinuedTREND 3 PHYGITAL RETAIL IS

271、 HERE TO STAYNotes:66 De Beers commissioned Diamond Acquisition Study China,202167 De Beers commissioned Diamond Acquisition Study USA 202232DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSFORCES SHAPING A NEW DIAMOND WORLDcontinuedWith todays technology,we may now all ta

272、ke digital shopping for granted,but this was a pipe dream only 20 or 30 years ago.Fast forward,andWeb3 the next iteration of the internet is leading the next digital revolution.But it is NFTs(non-fungible tokens)and the metaverse a new immersive 3D world enabled by Web3 that are gaining the most att

273、ention in the luxury sector for their potential to engage with consumers in entirely new ways and,in doing so,openup new sources of revenue,brand equity and customer acquisition.WEB3 AND THE METAVERSE ARE POTENTIAL GAME-CHANGERSTREND 433DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASH

274、BOARDIN FOCUSFORCES SHAPING A NEW DIAMOND WORLDcontinuedTREND 4 WEB3 AND THE METAVERSEDemand for NFTs has expanded considerably in recent years,notwithstanding high levels of volatility common with cryptocurrencies(the currency most used to buy NFTs)which led to a decline in 2022.Despite this,luxury

275、 brands continue to test and invest in the space,with several high-profile NFT drops taking place over the past 12 months from the likes of Tiffany&Co,Dolce&Gabbana and Nike(through its acquisition ofRTFKT Studios)68,to name a few.In 2021,Morgan Stanley estimated that luxury NFTs could become a$56 b

276、illion market by 2030,out of a total NFT market size of$240 billion69.When it comes to the metaverse,while still nascent as a concept,enthusiasts claim it will revolutionise the way we live our lives as we find new ways to connect to people,places and objects in parallel worlds melding the physical

277、and digital in previously unforeseen ways.It is expected there will be many metaverses existing in tandem in the future,serving the needs of various communities in the same way there are a variety of social media platforms today.Gaming is expected to be theearliest adopter of these new technologies,

278、with platforms such as Fortnite and Roblox already providing metaverse experiences70.Forecasts for the future potential of the metaverse are astonishing.McKinsey estimates that the value of the metaverse could reach$5 trillion by 203071.It also states that more than$120 billion in investment had flo

279、wed into the metaverse in the first half of 2022,and that 27 per cent of users active in the metaverse had made a purchase highlighting the metaverses potential as both a virtual playground and shopping mall.The technologies behind the metaverse aredeveloping at great speed,including augmented reali

280、ty(AR),head-mounted displays,AR Cloud,Internet of Things,5G,artificial intelligence and spatial computing.According to statistics published by Influencer Marketing72,there are expected to be morethan 1.1 billion mobile AR users globally by the end of 2022,and 1.7billion by 2024,making this a prime a

281、ndstill relatively untapped opportunity for luxury brands and retailjewellers.Notes:68 Nike leads NFT success by revenue as fashion shines over Pepsi,Time magazine|Vogue Business69 https:/ https:/ Value creation in the metaverse,McKinsey,June 2022:https:/ https:/ What is Web3?https:/ What is Web3?ht

282、tps:/hbr.org/2022/05/what-is-web375 Defining The Metaverse Today()76 https:/ ARE WEB3,THE METAVERSE,AVATARS AND NFTs?WEB3Web3 refers to the next iteration of the internet that is built using decentralised blockchains with a focus on creator and community-run networks73.The vision forWeb3 includes cr

283、yptocurrencies,NFTs(non-fungible tokens),metaverse,decentralised finance and more with users having more control over,and afinancial stake in,the web communities towhich theybelong74.METAVERSEThe metaverse remains an evolving concept but can perhaps best be thought of as immersive space that connect

284、s the digital and real-world lives of users.By incorporating technologies like AR,virtual reality(VR),AR Cloud,Internet ofThings,5G,artificial intelligence and blockchain,the metaverse offers new digitalways to work,learn,shop,socialise,and relax75.AVATARSWhile some metaverse experiences do not requ

285、ire users to be present in an embodied form,for others an avatar is a required a 3Drepresentation of oneself(photorealistic orfantasy),which the user controls.NFTsA non-fungible(meaning non-replaceable,one-of-a-kind)token is a unique digital code that represents a digital asset which could be an ima

286、ge,audio,music video or item in a video game.An NFT is secured and stored ona blockchain with immutable metadata andownership history76.NFTs also offer the potential for smart contracts which allow the creator toembed royalties within the NFT.Such royalties ensure the original creator of theNFT rece

287、ives a percentage of the sale price each time the NFT is traded on a secondary market.34DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUS2022 was the year when one could notopen a magazine or news website without seeing headlines about Web3,NFTs and the metaverse.Despite t

288、his news overload,these concepts remain vague and abstract to much of thegeneral public.So,why should the diamond industry pay attention to Web3 and all related technologies?Because it is the next iteration ofthe internet.It is the next source of creativity and inspiration for brands and luxury bran

289、ds,and it is set to dominate culture for at least the next decade.At the core of Web3 is blockchain technology(which started with the cryptocurrency,Bitcoin,in 2009),which has been adopted across various industries for its ability to underpin trust in digital platforms through an immutable,decentral

290、ised record of transactions(or data entries).It is also the technology that sits behind NFTs(non-fungible tokens),with blockchain making it possible to certify the ownership of these unique digital assets.In turn,blockchain technology and NFTs havegiven power and a platform to millions ofcreative mi

291、nds.Every single artist,designer or creative talent now has the ability to showcase and sell their work digitally,24/7,togain royalties in perpetuity,and to build theircommunities.Beyond blockchain,recent progress in computing power,3D streaming and augmented and virtual reality,underpin the advent

292、of the metaverse.The metaverse is not a destination,but any digital experience whichis immersive 3D,where people can hang out,socialise,consume content,and also shop.It is the experiential part of e-commerce,and by the way,you do not need virtual reality goggles to experience the metaverse.It can be

293、accessed now via desktop computers andmobile phones.HOW TO START YOUR WEB3 JOURNEY?The first guiding principle is to have long-term ambitions in the space.Buildingyour community and leveraging Web3 technology is a long-term endeavor,not a one-time project.Then,it is about approaching the space with

294、creativity and aligning with the right partners who will help design and execute the strategy that best fits your objectives and brand DNA.The number one pitfall is to think that there iseasy money to be made with NFTs,metaverse and Web3.It can become a newrevenue stream,but it requires proper inves

295、tment,time and resources.One of the early opportunities taking hold inthe luxury sector is in the NFT space,which can offer both commercial and brandopportunity.Looking at diamonds specifically,the industry could leverage threeaspects of NFT technology already:1.Certification and traceability:The da

296、ta related to a diamond(including origin,4Cs,responsible sourcing information),and each piece of jewellery,can be registered on a blockchain and becomes immutable.Throughout the lifecycle of a piece of jewellery,information is public,easily accessible and tamper-proof.NFTS,THE METAVERSE AND WHY THE

297、DIAMOND INDUSTRY SHOULD TAKE NOTE By Olivier Moingeon,co-founder of Exclusible,a premium e-retailer for digital collectible assets in the luxury sector EXPERT INSIGHTContinued on next page FORCES SHAPING A NEW DIAMOND WORLDcontinuedTREND 4 WEB3 AND THE METAVERSE35DIAMOND INSIGHT REPORT 2022INTRODUCT

298、IONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSFORCES SHAPING A NEW DIAMOND WORLDcontinuedTREND 4 WEB3 AND THE METAVERSE2.Digital twins:Imagine a beautiful million-dollar diamond necklace,which comes with its digital replica in the form of an NFT,given only tothe client who purchased that necklace.This cli

299、ent could wear the necklace through an augmented reality filter and post the picture to social media,while the physical piece rests in a safe.With this technology,the client is able to flex and enjoy showing their necklace,without ever having to worryabout theft or loss.It is also a greatvisualizati

300、on tool for virtual try-on,whichhelps increase conversion.3.NFTs as collectibles:Collectible NFTs give access to a wide array of CRM(customer relationship management)rewards from a brand.This is a great way for brands to release creative tokens either for sale or for free,but always with the objecti

301、ve to develop a tight knit community of brand enthusiasts.NFTs can then become the access key to exclusive products,content,and events.In that sense,Web3 is a new channel,and it is up to brands to decide if they want to leverage that channel for acquisition,sales or retention.NFTswill also enable di

302、gital fashion.We can expect every fashion brand to release digital collections regularly and to have a new product division for these digital assets.There is a common saying in Web3 that weare early.Web3,NFTs and the metaverse came to mainstream media in 2021 and theiradoption accelerated massively

303、in 2022,with a lot of brands entering the space to test-and-learn.Recently Shopify launched NFTtoken-gating as a stand-alone feature,Instagram is launching crypto wallet connection and NFT minting,Salesforce enabled distribution of NFTs and Facebook rebranded as Meta.When tech giants adopt Web3,itme

304、ans the march towards mass adoption hasbegun.While it may still be a long way ahead,the direction is clear.We expect 2023 will be the year when luxury brands start launching deeply creative and engaging projects of the kind never seen before.Such projects will offer renewed emotions and appeal to an

305、 entire new generation of fans,who are the customers oftomorrow.The future is bright!NFTS,THE METAVERSE AND WHY THE DIAMOND INDUSTRY SHOULD TAKE NOTE By Olivier Moingeon,co-founder of Exclusible,a premium e-retailer for digital collectible assets in the luxury sector EXPERT INSIGHTContinuation from

306、previous page 36DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSTOTAL NFT REVENUE(US$)NFT USE CASESWhen it comes to revenue generation,Nikes/RTFKT NFT strategy has been the most successful of all brand Web3 entries,bringing in$185.3 million as of August 202277,followed by

307、 Dolce&Gabbana and Tiffany.&Co.What is interesting is that each brand used a different strategy to enter the NFT space which highlights the range of options available to brands.ENTRY VIA ACQUISITION NIKE AND RTFKT Web3 digital fashion start-up,RTFKT,made itsmark in 2020 by selling digital sneakers f

308、or the equivalent of$90,000.Itfollowed that in2021 by auctioning 600 NFTs.Hopeful bidders could try on the virtual sneakers on Snapchat before the sale began.Winners were able to redeem a physical,real-life pair of sneakers though the brand was clear that the real value item was the digital pair.In

309、seven minutes,the auction raised more than$3 million.A few months later,an avatar partnership with artist Takashi Murakami garnered nearly$65 million in transactionvolume.In December 2021,Nike announced it had acquired RTFKT for an undisclosed sum.Nike Inc President and CEO John Donahoe said:“This a

310、cquisition is another step that accelerates Nikes digital transformation and allows us to serve athletes and creators at the intersection ofsport,creativity,gaming and culture.”Since the acquisition,Nikeand RTFKT have launched various NFT drops,such asbringing licensed Nike sneakers to theNFT indust

311、ry through the Cryptokicks collection of 20,000 virtual sneakers,oneof which sold for$134,00078.Most recently was the launch of RTFKTs first physical plus digital clothing NFT the RTFKT x Nike AR Genesis Hoodie that harnesses AR to enable wear for both avatars and real-life holders of the NFT.Holder

312、s of previous RTFKT Clone X avatar NFTs were given early access to the saleof the hoodie NFTs,providing perks to existing NFT holders while highlighting the recurring revenue potential that can be gained by nurturing exclusive and engaged Web3 communities.FORCES SHAPING A NEW DIAMOND WORLDcontinuedT

313、REND 4 WEB3 AND THE METAVERSENotes:77 Nike leads NFT success by revenue as fashion shines over Pepsi,Time magazine|Vogue Business78 https:/ NFT Brands Case Study Vogue BusinessNike/RTFKTDolce&GabbanaTiffany&Co.GucciAdidas25.7m11.6m185.3m12.6m11m37DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE

314、CHAIN DASHBOARDIN FOCUSFORCES SHAPING A NEW DIAMOND WORLDcontinuedTREND 4 WEB3 AND THE METAVERSEORGANIC ENTRY:DOLCE&GABBANAIn August 2021,Domenico Dolce and StefanoGabbana created a landmark first anine-piece one-of-a-kind luxury NFT fashion collection called Collezione Genesi.The collection involve

315、d both digital and physical works,bridging the real and the metaphysical.Each NFT included the promise of D&G experiences,such as invitations to future Alta Moda(high fashion)events.One month after launch,D&G sold the NFT collection,alongside the actual couture,for a total of around US$5.7 million.I

316、n 2022,D&G launched an NFT community called DGFamily,selling boxes offering access to different tiers of exclusive digital and experiential benefits inthe metaverse and real life.Box holders were granted rights to the first ever Metaverse Fashion Week,where buying virtual clothing would also lead to

317、 a physical twin being shipped to the purchasers real wardrobe.ENTRY VIA EXISTING COMMUNITY:TIFFANY&CO.WITH CRYPTOPUNKSCryptoPunks,created in 2017,are a collection of 10,000 pixelated punk rock characters with unique combinations of distinctive,randomly generated features79.Considered one ofthe earl

318、iest NFT projects,to hold one is to be part of an exclusive club whose members include Alexandre Arnault,Vice President of Tiffany&Co.,Serena Williams and Jay-Z80.For its first NFT foray,Tiffany&Co.tapped into this highly exclusive CryptoPunks community with the creation of NFTiffs,a collection of 2

319、50 CryptoPunk-inspired digital passes.The passes could be redeemed by CryptoPunks holders fora custom pendant of their punk created in18k rose or yellow gold with at least 30gemstones,designed and crafted by Tiffany&Co.NFTiff holders would also receive an NFT digital artwork resembling the final jew

320、ellery design.Each NFTiff cost 30 ETH(approx.$50,000).Thecollection of 250 NFTs was sold out within minutes generating around$12.5 million in sales and highlighting the power of tapping into an existing and already engaged Web3 community.METAVERSE USE CASESSome brands are already seizing the chancet

321、o make their mark in the metaverse,mainly in 3D games,which are at the vanguard in the metaverse.BALENCIAGA Luxury fashion brand Balenciaga is partnering with the online game,Fortnite,to sell four signature items from its collection to serve as skin and accessories for avatars81.Users can submit pho

322、tos of their avatars fitted out with theitems they purchase to be included on billboards of the games town square;they canalso enter a Balenciaga store to perform acustom dance.In real life,people can walk up to the Madison Square Balenciaga store and shop the Fortnite x Balenciaga collection.BULGAR

323、IFor Jean-Christophe Babin,Chief Executive ofBulgari,the question is not whether luxury goods brands should enter the metaverse,buthow?If his high-end jewellery is to be wornby avatars in the metaverse,he wants to make sure that the body on which they appear is not just“a cubic avatar that looks lik

324、e three pieces of Lego put together”.So,Bulgari is investing in an innovation business unit and hasa creative laboratory in Rome to make“more elegant”avatars82.Notes:79 https:/ https:/ From Nike to Balenciaga:These brands already have a presence in the Metaverse https:/ Financial Times,8 July 2022:h

325、ttps:/ INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSFORCES SHAPING A NEW DIAMOND WORLDcontinued By 2025,10%of workers will regularly use virtual spaces,up from 1%in 2022 By 2027,a majority of companies will have dedicated marketing budgets for digital humans (avatars)in metave

326、rse experiences By 2028,10%of public events(sporting,performing arts,etc)will offer participation in metaverse Potential for new revenue streams and expansion of product offerings(e.g.NFTs)Expand customer base through enhanced,immersive customer experience and additional reach Improve customer engag

327、ement through avatars being used in phygital retail strategies customer acquisition,virtual selling and customer support Longer term fully digitally-enhanced retail spaces(smart mirrors,product details available on AR glasses)Longer term leverage metaverse technologies to immerse customers in sourci

328、ng,supply chain and sustainability stories Start building business competency in metaverse technologies to understand the opportunity Consider where metaverse technologies could optimise or create new products and services Evaluate potential of metaverse technologies to enhance customer reach and en

329、gagement rates Use caution when investing in a specific metaverse too early to determine which investments will be most effective in the long termSource:Adapted from Brave New Worlds:Tapestry of Trends 2022 By Gartner Futures LabTREND 4 WEB3 AND THE METAVERSEMETAVERSE PREDICTIONS AND ASSESSING THE O

330、PPORTUNITYWHAT TO EXPECTOPPORTUNITIESHOW TO RESPOND39DIAMOND INSIGHT REPORT 2022INTRODUCTIONDIAMOND VALUE CHAIN DASHBOARDIN FOCUSGiven phygital is increasingly becoming a way of life for many consumers,particularly Gen Z,brands and retailers need to ensure that their processes for fulfilling end-cli

331、ent needsthrough digital channels are every bit as engaging and resourced as their traditional systems.Trust in e-commerce,which has beenbuilding over time,must be nurtured by ensuring that goods are shipped quickly and backed by high-quality customer service that matches that inother competing indu

332、stries.The diamond industry cannot afford to rest onits laurels.It must continue to innovate and embrace new technologies if it is to remain relevant to a new generation.With the advent of Web3 and the metaverse on the horizon,this is all the more important.So when it comes to addressing the questio

333、n:how can the diamond industry bring trusted brands to new generations in a digital age?a holistic approach is required,taking into account the following considerations:The effect of geopolitical events and a zeitgeist where priority is placed on societal and planetary welfare is that the industry must use all the technological and communications resources at its disposal to give consumers theevid