Russia’s state-owned diamond mining giant ALROSA is planning more direct sales to Chinese retail giants as well diamond tendered sales in Hong Kong to boost its brand awareness and sales this year in China.
ALROSA board member and Head of Sales Evgeny Agureev told the South China Morning Post on the sidelines of the Hong Kong jewellery show that China’s diamond demand may grow by 5 percent annually through to 2030 and it wants to build ALROSA brand awareness among Chinese consumers. US demand is expected to grow at some 4 percent during this period and ALROSA thinks it will remain the largest market.
As part of its China strategy, ALROSA plans to hold seven rough and polished diamond auctions in Vladivostok near the Chinese border this year, compared to the four it held last year, generating $74 million in sales. In addition, ALROSA will also host seven auctions and tenders in Hong Kong.
The bulk of the firm’s China sales are done via long-term agreements with six customers including Chow Tai Food and Chow Sang Sang, which also buy ALROSA diamonds through traders. ALROSA now wants more direct sales and closer marketing partnerships with some of these firms.
ALROSA’s interest in the Chinese market is also driven by the results of a company-sponsored poll last year by GfK which revealed that 86 percent of 4,000 Chinese respondents between 25 and 55 said they plan to buy at least one piece of diamond jewellery this year, compared with 59 per cent of Americans surveyed.
The poll also revealed that some 73 per cent of the Chinese respondents have bought diamond jewellery for themselves in the previous 12 months, and around a third purchased at least one piece as a gift.
The study attributed the findings to Chinese consumers’ habit of planned purchases for diamonds as against the more spontaneous or impulsive purchases in the US.