SHANGHAI • Ms Jily Ji was 24 when she got her first diamond ring, a 2.5-carat solitaire given to her by her parents.
In the three years since, the executive assistant from Shanghai has amassed a 15-piece diamond collection, including a ring, pendant earrings and necklaces that she bought for herself.
"We don't have to passively wait to be gifted a diamond by a man," the unmarried college graduate said. "Diamond jewellery is a natural way to express ourselves. It's a far better investment than most fashion items as it won't only gain value, but can also be passed down through the generations."
Financially independent, college-educated and born in China after 1980, Ms Ji personifies a key consumer group the world's diamond industry is counting on for growth.
So-called millennials now account for 68 per cent of diamond jewellery sales by value in the world's most-populous country - worth US$6.76 billion (S$9.77 billion) last year, according to research by De Beers, the world's biggest diamond producer.
Millennial women - defined by De Beers as those aged from 18 to 34 - spent about US$26 billion on diamond jewellery last year in the world's four main markets, acquiring more than any other generation, chief executive officer Bruce Cleaver said in a report in September. These 220 million potential diamond consumers are still a decade away from their most affluent life stage, representing a "significant opportunity" for the industry, Mr Cleaver said.
Tapping them could buoy prices of the gems, which fell by 18 per cent last year, the most since 2008.
Diamonds have caught the eye of Chinese consumers only recently because of their exposure to Western lifestyles and marketing, said Ms Ji, a business-English graduate, who counts Harry Winston Inc and Tiffany & Co among her favourite diamond jewellers. Her mother, for example, is more likely to purchase jade or gold jewellery, she said.
For Chinese millennnials, diamonds are more of a fashionable mark of achievement instead of a symbol of everlasting love, said Ms Joan Xu, Shanghai-based associate planning director at J. Walter Thompson, an advertising agency. The trend is changing how companies such as Chow Tai Fook Jewellery Group and Shanghai-traded Lao Feng Xiang are designing and marketing jewellery in China.
Chow Tai Fook, the market leader in Chinese jewellery with a 5.7 per cent share, bought Boston-based Hearts on Fire Co for US$150 million in 2014, giving it a greater selection of unique, millennial-preferred pieces, including earrings and pendants with multiple small diamonds embedded in precious metals.
'"We need to tap this audience very quickly with designs for millennials that are more practical and fashionable, such as mixing gold with diamond," Chow Tai Fook executive director Adrian Cheng said in an interview in Hong Kong.
Chow Tai Fook, for whom millennials make up half its clientele, will introduce new lines and products by the end of 2017 and has signed spokespersons including South Korean actor-singer Lee Min Ho, 29, and rapper G-Dragon, 28, to reach millennial buyers, Mr Cheng said.
Independence is the top trait Chinese millennial women identify with, according to a Female Tribes survey conducted by J. Walter Thompson that interviewed 4,300 women across nine countries about a year ago. More than two in five Chinese respondents said financial independence was more important than marriage.
Pandora, the Denmark-based maker of silver charm bracelets, said that it is intentionally staying away from love-centric marketing. This year, Pandora doubled its number of stores throughout China from 43 to 81.
"You won't see a couple in our images," said Ms Isabella Mann, Pandora's Hong Kong-based vice- president of marketing for Asia on the phone. "We want our brands to appeal to as many people as possible and we think it's dated to show a lovey-dovey couple in a jewellery ad."
That may be wise. An unfavourable demographic shift leading to fewer weddings has resulted in a "tepid" outlook for Hong Kong-listed jewellery companies, HSBC Global Research analysts Lina Yan, Karen Choi, Erwan Rambourg and Vishal Goel said in an October report. They forecast that wedding rates would fall 1 per cent in each of the next two years because of a decline in the population of millennial women.
Divorce in China has also risen, with more than 3.84 million couples splitting up last year, a 5.6 per cent increase from the year before, said China's Ministry of Civil Affairs in July. The national divorce rate is now 2.8 per 1,000 individuals, up from 0.9 in 2002.
"Companies that are built on the institution of marriage, like diamond companies, will struggle a little bit unless they evolve," said J. Walter Thompson's Ms Xu.
"The idea was that marriage is eternal - like diamonds - but what happens when marriage is not seen as eternal any more?"
BLOOMBERG
