Diamond demand in China has reportedly fallen by as much as 50% from pre-pandemic levels, with declining consumer confidence emerging as a key challenge for the natural diamond market.

The shift is particularly visible among younger Chinese consumers, who are increasingly comparing the performance of diamonds with gold. While gold prices have reached record levels, diamond prices have declined, prompting discussions across social media about the long-term value and investment potential of diamonds.

Unsold Inventory Adds to Market Pressure

The decline in demand has also affected the diamond trade. During 2024 and 2025, weaker consumer demand reportedly led some Chinese retailers to sell unsold diamond inventory back to wholesalers. The movement contributed to additional supply entering the wider market and added pressure to an already challenging global diamond environment.

At the consumer level, lower diamond prices have not necessarily translated into stronger demand. Instead, some buyers remain hesitant, concerned that prices could decline further after their purchase.

Resale Remains a Key Concern

Another challenge is the limited availability of structured and transparent resale channels for diamond jewellery. Unlike gold, which has an established resale ecosystem in many markets, consumers often find it difficult to sell diamonds at a price they consider fair.

Historically, the industry has experimented with mechanisms designed to address this concern. Between 2014 and 2019, De Beers operated the International Institute for Diamond Valuation (IIDV), a service intended to provide consumers with a more defined route for reselling diamond jewellery. In one reported test case, the customer received approximately 65% of the original purchase value, illustrating both the potential and limitations of such a model.

Industry Faces Need for Greater Consumer Confidence

The current market environment has renewed discussion around the need for jewellery companies to develop formal resale and buyback programmes. Such initiatives could provide consumers with greater clarity around the secondary market and potentially reduce concerns about purchasing natural diamonds.

Models involving structured resale services, could offer a reference point for the industry. While resale programmes may not always deliver direct profitability, proponents argue that they can strengthen consumer trust, transparency and confidence over the longer term.

As the Chinese market continues to evolve, the ability of the diamond industry to address concerns around value retention, resale and price transparency is likely to remain an important factor in rebuilding consumer confidence.