Recently, the price of gold in mainland China has experienced a slight decline, while the diamond market, which has long been associated with gold, is said to be in a state of “collapse”.
On May 7th, the topic of “Gold Soars While Diamonds Collapse” trended on social media platforms in mainland China. In recent months, the price of gold on the mainland has continued to soar, albeit with some fluctuations. At the end of April this year, the prices of mainstream gold brands such as Chow Tai Fook surged, and there was a slight adjustment during the May Day holiday, but they still remained at high levels.
However, the situation in the diamond market, which has long been compared with gold, is quite the opposite.
According to a report by the financial media outlet “Zebra Consumer” which focuses on the consumer sector, data shows that last year, the market size of diamond products in China was approximately 60 billion yuan, a decrease of about 27% compared to the previous year.
The article suggests that the “collapse of the diamond market” has led to the rise of lab-grown diamonds, piercing the core of the diamond market, and even lab-grown diamond substitutes for natural diamonds are not selling well. Some companies specializing in diamond jewelry have also started doing business in gold. For example, DR has introduced new bridal gold collections; Le Sensing has ventured into the “Euro Gold” arena.
The parent company of DR Diamond Ring, Dia Holdings, saw a year-on-year decline in revenue and net profit of 40.78% and 90.54% respectively last year, with non-GAAP net profit recording the first loss and jewelry sales dropping by 156,700 pieces compared to the same period last year. Le Sensing, known for its bridal rings, incurred a net loss of 76.1981 million yuan last year, an increase in loss by 99.18% compared to the previous year. Edel has accumulated losses exceeding 3.34 billion in four years and was delisted in March this year.
The report states that due to intensified competition within the diamond industry, since 2022, the prices of lab-grown diamonds have continued to plummet; the price of synthetic diamond rough stones has dropped by about 80% from the historical high in 2021, directly impacting the performance of diamond enterprises.
The article also mentions that diamonds were once popular due to their association with romance and artificial control of production. However, today, the value of diamonds cannot withstand the test of time and technological progress. The rise of lab-grown diamonds has led to mass production and unlimited supply, causing the continuous depreciation of diamond prices.
Comments from netizens include: “Gold has been a store of value for thousands of years, always retaining its worth and can be easily liquidated for cash, while also appreciating over time. Diamonds, on the other hand, are artificially inflated; they are extremely expensive to buy and difficult to resell without experiencing substantial losses.” “Valuable gold has always held its value, whereas diamonds, unless natural, are essentially just artificial stones. In the current environment, people are becoming more sensible, even feeling hesitant to spend a few dollars on pork, a basic necessity, let alone on overpriced stones like diamonds.”