A gemstone in your engagement ring determines how precious that can be and if the gemstone is nothing but a diamond, it will take the ring to another level. But the current coronavirus outbreak may cause a disruption to any average people’s dream of buying diamond jewelry.
How The Recession Affected the Diamond Business
It is not unknown that the ongoing pandemic COVID-19 is causing a global recession in every aspect of the economy. The global recession created an economic shock which leads businesses or trades to disruption.
COVID-19 hampered the diamond jewelry business as well as every other business, abruptly. During the pandemic a lot of people’s plan of getting married was postponed, people could not meet each other on their special occasions as they could not go out. And in addition that jewelry shops remained close because of the global lockdown. Although, for some cities or countries lockdown came to an end which means jewelers can open their stores and start their interrupted business again. But there is no assurance that it will reach its previous economy.
How Was The Previous Economy
The way every segment of the diamond business’s value chain enhanced in the year 2019, proved that it was at its highest peak during that year. The economy and growth achieved its finest like never before. But the 2020 pandemic situation created adversity to the industry which led to the recession. Now the biggest uncertainty is if it will get back to its previous state.
Why The Economic Growth Is Decreasing
A large portion of the lab-grown and naturally-mined grown diamonds are cut, polished, and processed in India. Because of wage reduction, Indian jewelers stopped working or the strict lockdown automatically led the factories to shut down temporarily. The economic growth of the business reduced to half of the value.
No human being is certain about the current pandemic and when it ends. Even though it ends, the business can not go back to its peak position as after a recession most of the middle to upper-middle-class people will not be able to spend money on luxury or high-end goods. In such a manner, it is difficult to assure the previous peak position of the diamond jewelry industry.
A Slight Chance Of Going Upward
Now people might be thinking the diamond industry is not going upward in near future. However, surprisingly a particular class of people is investing in diamonds during this pandemic. These crazy rich people started buying diamonds even though live online auctions and helping the diamond industry to not sink down. This is creating a 50-50 chance for the industry’s economy if it will achieve stability or it will go downturn. There is a high chance that a lot of companies can go bankrupt whether it’s a small company or bigger. Although, small companies are in severe danger of getting bankrupt and bought out by rich investors or bigger companies. Besides, companies with huge debts need more strategic planning to eradicate potential bankruptcy. Many statisticians think that there is a high chance that the economy will not come back that easily in the near future but will take time. The recession created by the pandemic also created an immense supply and lessened the demand. Because of the global recession, the demand went down, and compared to the demand the supply is vast. As the supply is clearly broader than demand the price rate of diamonds might get reduced. Nevertheless, the price will not get cheap. It will only reduce a bit but many people might be able to afford diamond jewelry finally. As a consequence, the diamond business may get its business back.
The Bottom Line
There is no doubt that a pandemic is going on and making everyone’s life miserable. It provoked many businesses and the economy to the fastest downturn. But when it will end, with some little patience the economy of the diamond business will rise back. Optimistically, it may take time but will be able to achieve the previous level.
Iskra Banović is our seasoned Editor-in-Chief at BlueFashion. She has been steering the website's content and editorial direction since 2013. With a rich background in fashion design, Iskra's expertise spans across fashion, interior design, beauty, lifestyle, travel, and culture.