The phrase "carat freedom" has set off an unprecedented wave in the capital circle and traditional natural diamond market, cultivating diamonds to quickly enter the public's view in a booming and vibrant manner, and even being considered the next "new energy race".
With everyone watching, almost any track can easily make a profit. Last year's cultivation of diamonds was such a 'sweet cake'.
In just 22 years, the cultivation of the leading diamond enterprise Power Diamond achieved a net profit attributable to the parent company of 460 million yuan, giving it a sense of overnight wealth. However, jokingly, once the annual report was issued, the company's stock price did not increase but fell, continuing to reach a new low since its listing, with a drop of nearly 27% within two weeks.
Power Diamond Stock Price Trend Chart
Is the contradiction and mismatch between the consumer and production sides of the cultivation diamond race reflected behind the doubling of strength diamond performance and the sharp drop in stock prices? Does the current dilemma of leading companies prove that the myth of cultivating diamond tracks is no longer true? Where will the future of "Diamond Mouth" go?
With the support of capital, the landing in place after a flying day
Under the enthusiastic support of capital, Power Diamond's first day of listing on the Shenzhen Stock Exchange rose by 1112.42%, ranking second in the first day stock price increase of 199 companies listed on the China A-share Growth Enterprise Board in 2021. Similarly, the gains of the other 12 concept stocks related to the cultivation of the diamond sector were similar to those of Red Cliff, showing a trend of starting a prairie fire. In less than four months in the second quarter of 2022, the entire sector rose as high as 91.98%.
Trend Chart of Cultivating Diamond Concept Plate
According to announcements from major enterprises, the voices of expanding production are constantly heard. The Baojing project of Power Diamond, the 800 million investment and expansion project of Yellow River Cyclone, the CVD method large single crystal diamond project of National Machinery Precision Industry, and the 120000 carat HPHT method production line project of Zhongbing Hongjian have all announced that the leaders are optimistic about cultivating the prospects of the diamond market and are willing to add to it.
However, in the second half of 2022, as an important demand support for cultivating diamond raw stones, Indian processors significantly reduced their cutting and grinding capacity. While the growth rate of diamond rough imports slowed down in the middle reaches, diamond dealers engaged in a "price war", which suddenly put a brake on the entire industry.
As a barometer of industry development, the capital market has also responded to the performance of cultivating the diamond industry. The entire sector has quickly entered a rainy period, and leading stock prices have halved. There have even been cases where the Yellow River cyclone expansion project has collapsed.
In this situation, more and more roughcast manufacturers are turning their attention to downstream consumer markets with relatively stable prices.
Has' Kra Freedom 'really been achieved?
Although Nurturing Diamonds has taken a "roller coaster" ride in the capital market, there are at least some shining moments. However, China's end consumer market for Nurturing Diamonds has not yet reached any high point.
The global market size for cultivating diamond jewelry (finished products) in 2022 is approximately $12 billion, achieving a 38% growth compared to 2021. However, its market share and growth source are basically concentrated in the US market. Although China is the main force in cultivating diamond production and manufacturing, terminal sales are very few.
Although we can see many reports on cultivating diamonds, Chinese consumers' understanding of this category is still in a very early stage.
The most intuitive feeling is that when it comes to cultivating diamonds, most people's first reaction is' Oh, I know, fake diamonds'. The reviews of online shopping websites can also directly explain some problems. When consumers face the cultivation of diamonds, they have more doubts: is it moissanite? Is it a real diamond? Can it maintain and increase value? Will there be a sense of affordability? Not natural, okay? Can the partner agree to propose with this diamond?
The series of questions exposed the core problem faced by cultivating diamonds on the consumer side, namely the lack of consumer education. The term 'carat freedom' only allows consumers to understand the most superficial attribute of cultivating diamonds, which is that they are cheaper, but they are almost completely unaware of other contents.
This aspect of the problem alone is not enough to hinder the overall development of the industry, and the key factor is the waiting and waiting of jewelry brands.
Someone cultivates diamonds, but no one cultivates cognition
Compared to the consumer side's retreat, the brand side focuses on a complex and confusing situation.
Whether a category can establish itself in the market is often an important indicator of the direction of leading enterprises.
At present, many brands can be seen in the market to cultivate diamond retail business in a proactive layout: the main trend and fashion of Yu Garden Garden Co., Ltd. to cultivate diamond brands are bright; LightMARK small white light with a focus on Diamond+concept; Cultivate diamond brand ANOTA and others with a strong sense of future in the fashion and runway circles.
However, what we pay more attention to is the "caution" of top brands and established jewelry companies. Actively introducing cultivated diamonds into one's home is like planting danger as well as opportunities.
In October 2021, Chow Tai Fook Jewelry, the largest jewelry brand in the Chinese market, briefly launched a cultivation diamond brand "CAMA" on Tmall. But this brand withdrew after a few months. Chow Tai Fook Group later admitted in answering investor questions that it was testing the "cultivation diamond" category.
The main reason for the small-scale online promotion and sales of diamonds lies in the upstream price fluctuations and downstream consumer acceptance issues. With the expansion of upstream production capacity, the downstream capacity has become a major issue, and this linkage has led to a further decline in finished product prices.
The ripples brought by the entry of the pioneers are minimal, and only when major jewelry brands join forces can they quickly reverse the perception of the consumer market. However, considering the potential impact of cultivating diamonds on existing natural diamond products, major jewelry brands do not actively take risks and generally maintain a wait-and-see and cautious attitude in business decision-making.
It is precisely the ambiguous and swaying choices of big brands that constrain the further development of the industry.
The path to cultivating diamonds still requires careful exploration
Telling a 'good story' and fully interpreting new values
The genius marketing around natural diamonds, which revolve around the concept of 'diamonds last forever, one forever', has made the diamond category synonymous with love and has lasted for half a century. The core value of natural diamonds itself lies in the scarcity brought about by monopoly. At the same time, continuous marketing has made them the equivalent symbol of wedding celebrations and vows. This strong suggestion and value building communication are no longer the scale that can be broken in a short period of time by cultivating diamonds through marketing.
The emergence of cultivated diamonds has to some extent diluted the core value of natural diamonds. Under the same intention and satisfaction, price is the core driving factor for consumers to choose to cultivate diamonds. Under the premise of being consistent with the physical and chemical properties of natural diamonds, it is the choice of consumers to trade for larger carats, better clarity, and purer colors of diamonds at a lower price. Driven by such benefits, the potential market for low budget consumer groups will further open up, and over time, it will further feed back and enhance the cognitive level of the customer group.
After the new value attribute label of high quality and low price was affixed, although it could not catch up with the exorbitant premium that natural diamonds can sell, it also provided a space for this category to tell a "good story".
So breaking through the traditional framework and giving a brand new story to cultivate the diamond category is imperative.
Keep a close eye on "her economy" and let the diamond shine in "pleasing oneself"
As an important development direction of the jewelry industry's "other economy", "Yueji" is an extremely suitable market for cultivating diamonds. The inspiration for this story should come from this.
The consumption concept of contemporary women places greater emphasis on relaxation and the acquisition of self happiness. When it comes to jewelry, it carries the psychological demands of women's attention and self-expression. Currently, the demand for cultivating diamonds to "please oneself" is relatively clear, and products that are basically limited to less than 1 carat are not overly expensive, but can also showcase women's beauty. From the perspective of the price and value of such products, a logically coherent business story loop is formed.
So with a story, how can we create a brand and category unique to cultivating diamonds around the story?
Focus on "scenario oriented" and focus on daily outfits
Scenario-based dressing is an excellent way to showcase the charm of diamonds.
Natural diamonds often represent luxury and eye-catching due to their characteristics, and excessive luxury makes it difficult for them to directly appear in daily life. But the emergence of cultivating diamonds has further expanded the application of diamonds.
Imagine putting on a small fragrant knitwear, wearing cool wide legged suit pants, and mixing and matching diamond pendant chains and diamond rings that highlight the lines, showcasing elegance and solemnity in a low-key manner. Walk into the spotlight and start showcasing intellectual and elegant charm.
A scene with a strong sense of visuals can bring people into the aesthetic world of diamonds at once, and also allow diamonds to match daily life, work, business and other scenes without contradicting.
In this way, the application scenarios of diamonds have been completed, ranging from daily wear to occasion use. By using "scenario based" education for consumers, we can also promote our own brand.
Design 'diversification', fully integrating differences and characteristics
On the other hand, it is to leverage the controllability of cultivating diamonds and amplify their category advantages.
Cultivating diamonds, due to the controllable production process environment, produces finished products that are not like natural diamonds. Their quality is entirely determined by fate, and they have natural advantages in high-quality diamonds, colored diamonds, shaped diamonds, and large carat diamonds.
So, focusing on young people's freedom to pursue themselves, diversity, and individuality, using the application of color diamonds, shaped diamonds, design styles, and other elements to enrich the product matrix, fully utilizing the advantages of cultivating diamonds themselves, and creating a brand with a new aesthetic and artistic style will be a good choice.
As long as distinctive and differentiated designs are highlighted, young people who love fashion will pay for them.
Finally, the struggle and differentiation between cultivating diamonds and natural diamonds will be further intensified. The original diamond monopolists will not easily allow the scarcity of diamonds to be greatly diluted, so their actions to help the differentiation of the two tracks will not be lacking.
At the same time, the industry really needs to be alert to the impact of a large number of homogenized low-cost products on the cultivation of diamond market. If we simply take "low price and cheap" as the main sales strategy, then the collapse of the price system and the lack of scarcity of products will only lead to the end of being eaten back by our own behavior.
The development of cultivating diamonds is tortuous and difficult, and like all new things, it takes time to test their success or failure. The vast prospects for cultivating the diamond market and the unfinished scale of its terminals determine the uncertainty of its development. However, it can be confirmed that the diamond industry is developing rapidly. It is believed that in the near future, "carat freedom" will no longer be a slogan, but the few grams worn on one's body.