LONDON–(BUSINESS WIRE)–Technavio analysts expect the global diamond mining industry for the period 2015-2019 to exceed USD 17 billion, growing at a CAGR of over 5%, according to their latest report.

According to Chandrakumar Badala Jaganathan, a lead research analyst at Technavio for metals and minerals, “The global diamond mining market is growing at a moderate pace. Diamond mining is complex as not only the revenues but also the profits of the players involved in the business of mining diamonds depend mainly on the prices of the stones mined at various locations around the globe. China, India, the US, Japan, and the Persian Gulf command 75% share of the global diamond market.”

Technavio’s lead chemicals and materials market research analysts have identified the following three factors that will drive the global diamond mining industry:

• Rise in demand from emerging markets
• Emergence of pre-purchase touch points
• Increase in organized retail

Rise in demand from emerging markets

The global diamond mining market has been witnessing a rise in demand from countries like China and India. The major consumers of diamond jewelry in China are married women with 72% share, followed by single women with 24% share, and the remaining 4% share comprises of prospective brides.

With the rise in disposable income, consumers are willing to spend more on expensive goods, such as diamonds jewelry. The per capita disposable income of consumers in China has risen by 7% since 2014.

In India, demand for diamonds rises during the wedding season and the festive seasons. Consumers are increasingly becoming brand-conscious, particularly when it comes to gifting jewelry containing diamonds. They prefer to buy diamonds from organized retailers as they doubt the quality of diamonds sold by unorganized retailers.

“The emergence of large format stores accompanied by a variety of collections under one roof are some of the factors influencing the rise in demand for diamonds. Some vendors are also introducing low-cost diamond jewelry for price-conscious customers,” says Chandrakumar.

Emergence of pre-purchase touch points

Pre-purchase touch points help in increasing the sales of diamonds and diamond jewelry. Pre-purchase touch points include advertisements, magazines, jewelry stores, and online stores. Before investing a sizable amount of money on diamonds, consumers have a look at the various pre-touch points, such as online portals of the company to learn about quality, prices, and also for pre-selection of designs. The consumers then go and make their purchase personally.

For example, in the US in 2013, 38% of consumers bought diamond jewelry through online stores, 36% from jewelry stores, 22% from advertising, and the remaining 12% from magazines.

Increase in organized retail

Though the global diamond market is dominated by unorganized players, the growing organized retail format commands a sizable market share in the developed markets, such as the US, the UK, Japan, and Italy. All the major players in these markets operate through their exclusive modern retail stores.

The same driver is also found in the developing markets, such as China and India. In India, the Titan Company was the largest organized retailer of jewelry in 2014, with a market share of 4%. The flagship brand store of this company called Tanishq, was started in 1994 and within ten years of operation, the retailer has created a significant footprint in the market.

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Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.

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