- Millennials are buying diamonds at a rate higher than their parents, according to the CFO of the world's biggest diamond producer.
- Nimesh Patel of De Beers told Business Insider that it is a "fallacy" to say that millennials aren't buying diamonds.
- Patel's words contrast with an Economist article that asked "Why aren't millennials buying diamonds?"
LONDON — It's wrong to suggest that millennials aren't buying diamonds, according to De Beers Chief Financial Officer Nimesh Patel, because they're spending a higher proportion of their income on jewellery than previous generations.
Back in 2016 an article in The Economist magazine went viral after asking the question "Why aren't millennials buying diamonds?"
The article drew criticism from the millennial generation — most of whom are unable to get on the property ladder, and are forced to rent into their 30s — for wondering why they're not buying a precious stone that is nowhere near being a necessity in life.
"Maybe because they're burdened with crippling student loan debt and can't actually find a good paying job," was among the most common responses, according to a Huffington Post article at the time.
Speaking to Business Insider last week, Patel called the idea that younger people aren't buying diamonds a "fallacy" and said that demand among millennials (generally classed as anyone aged between 18 and 35) is actually pretty similar to, if not higher, than in previous generations.
"There's a slight fallacy here that younger people don't want to buy diamonds," Patel told BI over the phone.
"Look at the facts. If you look at the millennials in our top four markets, they account for 45% of diamond purchases. That's an impressive number."
"That is the same or higher proportion of diamond jewellery purchases as the generations that came before them when they were the same age."
The trend of millennials buying diamonds, Patel says, is even more impressive given that most have not yet reached what he calls "peak affluency" — the point in one's life where you have the largest proportion of disposable income.
"That's despite the fact that millennials haven't reached peak affluency. In fact they're probably 10 years away from that peak. Again, compared to previous generations, that means that they're probably spending a higher proportion of their total personal disposable income on diamond jewellery," Patel said.
Trends for diamond purchase are shifting however, Patel noted, saying that the millennial generation is more inclined towards what he called "self-purchase" of diamonds and diamond jewellery.
Millennials are more likely to buy themselves diamonds to celebrate their acheivements and successes, rather than for life events such as an engagement, than other generations.
"The last point to pick up on is the trend towards self purchase. Self purchase today is at 26%, and we are seeing self purchases being more frequent, and at an earlier age," Patel said, before noting that De Beers is specifically targeting such purchasers with its marketing strategies.
"That's why the work that we're doing in our marketing campaigns is critical, because we're marketing to the self purchasing consumer," he said.
"We're marketing to women who want to celebrate their achievements — with their families — but actually also in their own lives, whether that's career, social, or sporting achievements."
Patel spoke to Business Insider after De Beers reported $5.8billion (£4.2 billion) revenues for the year to the end of December 2017, down 4% from 2016. De Beers blamed that revenue drop on a one-off industry restocking in 2016.
