Under a black-and-white framed photo of the New York skyline, a bottle of Moet & Chandon champagne cools in the private bridal salon at Tiffany’s flagship Shanghai store, while white roses and love poems set the mood for China’s Romeo to pop the question to his Juliet.
The room, dotted with splashes of the jeweler’s iconic eggshell blue, has been busy of late, as young Chinese, drawn by the allure of diamonds, increasingly choose the sparkling gems over traditional gold baubles to mark their marriage vows.
China’s diamond market, now the world’s second largest after the United States, has more than tripled to US$22.8 billion over the last five years, according to data from market research firm Euromonitor, steadily gobbling up market share from gold and far outstripping the growth rate in China’s 465 billion yuan (HK$586.3 billion) jewelry sector.
“(In China) we now have more and more young people making their declarations and proposal ceremonies within our bridal rooms,” said Stephane Lafay, Tiffany’s head of Asia Pacific and Japan, who said couples were attracted to the romantic image of the jeweler’s well-known “little blue box”.
At the centre of the trend are China’s 13 million brides each year, who are increasingly demanding diamonds.
“All along, my husband and I always thought that we would buy a diamond ring, so it never crossed my mind he might not. I think I’d have been pretty cross if he hadn’t,” said Zhou Lijuan, 27, an accountant in a state-owned company in Shanghai, with a 50,000 yuan diamond ring.
To be sure, gold is still hugely popular in China, both as jewelry and as an investment. The World Gold Council said earlier this year that China was set to challenge India’s position as the world’s top gold consumer, with this year demand soaring more than 20 per cent to 1,000 tonnes.
But diamonds have steadily increased as a share of China’s overall jewelry market, accounting for just under one third now from one quarter five years ago, according to Euromonitor. This has propelled Greater China, including Hong Kong, to the second largest diamond jewelry market after the United States, according to Bain & Co, and along with India, it is expected to be the main driver of growth for the US$72 billion global market.
The appeal of diamonds, long linked with wedding bells in Europe and America, hasn’t always been so strong in China, where the bride-to-be’s family was often responsible for supplying a gold-based dowry of rings, bracelets and other trinkets.
“In my mum’s generation, women were really just interested in gold. The woman’s family would prepare a gold bracelet themselves, and the man’s side would arrange a golden betrothal gift,” added Zhou, who got married last year.
But tastes are changing.
China’s modern consumers have much more exposure to Western culture than their parents, including books, films and television that often involve heroines or romantic leads receiving or wearing a diamond ring.
“Western films have a kind of ‘bridge’ effect, so when Chandler buys a diamond ring for Monica in ‘Friends’, it really left a deep impression,” said Lily Cai, 30, a civil servant in Shanghai, referring to the hit US television series.
“A diamond ring is a symbol of love, and the larger the diamond the deeper the love,” she added. She now has a diamond ring from Hong Kong jewelers Chow Tai Fook Jewellery Group which cost 43,000 yuan.
The sparkle of China’s diamond industry has tempted jewelers, miners and dealers alike.
Global auction house Sotheby’s is set to offer a huge white diamond in Hong Kong at the start of October, which would be the most expensive white diamond ever sold at auction if it hits its US$28 million lower pre-sale target.
“From 2006 until now we’ve seen a threefold increase, close to 200 per cent, of Asian buyers purchasing jewelry worldwide. What they’ve really focused on, of course, is diamonds,” said Patti Wong, chairman of Sotheby’s Asia, who added Chinese buyers were showing increasing confidence about snapping up the most expensive gems.
De Beers, the largest diamond producer by value and majority-owned by miner Anglo American, sees China as driving growth over the next four years. It has five diamond-focused outlets in China with more set to open this year.
The incentive is clear. Tiffany’s Lafay said over the last 20 years, the number of people buying diamond engagement rings has risen from less than 1 per cent to more than 50 per cent in urban China. More than half of the country’s 1.3 billion population now live in cities.
Even traditionally gold-focused jewelers, such as China’s Chow Tai Fook, are looking to up exposure to diamonds. The world’s biggest jewelry retailer by market value, it recently struck a deal with Russian miner AK Alrosa OAO to ensure its diamond supply.
“Mainland Chinese are becoming more westernised, so they tend to select diamond rings for their engagement proposal and wedding,” said Chow Tai Fook’s managing director Kent Wong.
China will also be a critical market for Rio Tinto’s diamond business, after the world’s No. 3 miner scrapped a planned sale of the unit earlier this year. Rio Tinto has now set up links with Chow Tai Fook, and last week invited 100 jewelry experts in Hong Kong to see its latest diamond haul.
“Going forward China will be the engine for growth in global retail diamond jewelry consumption,” said Jean-Marc Lieberherr, managing director of Rio Tinto’s diamonds and minerals division. He forecast low double-digit growth in China and said the firm was directing more of its production into the Chinese market.
China’s bridegrooms may not be quite so convinced as their demanding brides, but the wives-to-be usually win in the end, conceded Yu Peidi, 27, a salesman in Shanghai, who proposed to his now-wife in 2011.
“Women are always getting together to compare, telling friends and colleagues that their husband has bought them such and such a diamond ring. Just talking about having a diamond seems to keep them happy,” he said.