Affluent Chinese are buying travel instead of diamonds
Luxury travel is taking a bite out of Chinese spending on other high-end products.
China’s newfound penchant for luxury travel poses the latest threat to a turnaround for the USD 80 billion diamond industry.
Chinese deluxe spending on travel is the “fastest-growing competitor” standing in the way of diamond sales in the world’s biggest consumer market, said De Beers SA Chief Executive Officer Bruce Cleaver. To win those travel dollars, he said De Beers could even see itself tying up with the luxury travel market somehow.
“Luxury travel is certainly a competitor to diamonds,” Cleaver said in an interview in Hong Kong Thursday. “If there’s a way to link luxury travel to an African destination where the diamond came from, we’d certainly look into that too.”
The world’s biggest diamond producer is seeking to kickstart an industry that’s seen prices for polished diamonds slump for the past six years. Its major Asian markets including China and India reported flat or declining sales in 2016. The company is also facing hurdles as a younger generation of Chinese shoppers increasingly spend more on high-end electronics, travel and fine dining than on baubles.
Winning over those shoppers won’t be easy, especially in China, where diamond sales declined 4.8 percent last year in dollar terms. Competition from travel is a big challenge. China is the world’s largest source of outbound travelers, according to the World Tourism Organization. More than 135 million Chinese traveled in 2016, and their spending rose 12 percent to USD 261 billion.
Read Original Article