De Beers plans to spend a whopping US$160 million (P1.64bn) in its traditional festive season marketing, hoping the generally positive global outlook for diamond demand translates into bumper profits.
The planned budget eclipses the $120 million the diamond giant has been spending on its marketing campaigns every year since 2015.
While De Beers markets its stones through various channels throughout the year, its campaigns traditionally reach a peak between Thanksgiving and the Chinese New Year, with the US and China representing key markets.
Last year, De Beers clocked global consumer demand for diamond jewellery at US$82 billion, a record in itself and an achievement that lent momentum for demand in 2018.
Presenting the group’s interim financial results for 2018 in Gaborone recently, De Beers executive vice president – diamond trading, Paul Rowley said this year’s marketing spend encompassed investments in De Beers’ brands such as Forevermark and a partnership with the Diamond Producers Association.
“In the US, early signs indicate continued positive growth in 2018, supported by strong macroeconomics and positive consumer sentiment,” he said. “China returned to growth this year, supported by positive macroeconomics, while India is softer due to macroeconomic factors and regulatory changes specific to the jewellery sector.”
He added: “Consumer demand remains positive for most of the main
Rowley said besides the growth returning to major markets, positive signs were visible in Hong Kong.
“Midstream sentiment is positive on the back of strong demand from the US and China during the key holiday season.
“Conditions remain favourable with midstream inventory within normal levels and a slight strengthening of polished diamond prices since the start of the year,” he said.
Meanwhile, the group has recorded a solid financial performance in the first half of 2018, reflecting strong underlying demand supported by a continued focus on enhanced operational performance. Rough diamond production increased by eight percent to 17.5 million carats, with revenue pegged at US$3.2 billion from US$3.1 billion.
“The average realised rough diamond price increased by four percent due to a 1.6% increase in the average rough price index and an improvement in the sales mix, driven by the substantial volumes of lower value goods sold in the first half of 2017, following the Indian demonetisation programme in late 2016,” Rowley said.