Diamond Industry Review 2024

Arete

Diamond Industry Review 2024 Global Changes, Local Insights, and Future Opportunities Vladimír Kondratěnko

Contents

AreteApp.eu Arete.Tools AreteDiamond.cz

01

Introduction

02

Global Diamond Market Analysis

03

Impact of Lab-Grown Diamonds

04

Fancy Color Diamonds in 2024

05

Focus on European markets

Brief overview of the diamond industry in 2024 including key themes and objectives of this analysis

Overview of market corrections, supply chain evolution, and changing consumer preferences shaping the global diamond sector

Examining the rapid rise of laboratory-created diamonds, their sustainability, and challenges they present to the natural diamond market

Year-round price development review from the Fancy Color Research Foundation focusing on yellow, pink, and blue diamonds Closer look at regional trends, including G7 sanctions, consumer behavior, and digital transformation in Europe and the Czech Republic

06

Global Luxury Goods Market

07

Growth & Innovation at Arete

08

Strategic Outlook 2025

09

Conclusion

Overview of luxury sector developments and their impact on the diamond industry during a turbulent year

Overview of major milestones, new tools, and international initiatives by Arete to support its wholesale clients

Forward-looking analysis of tightening sanctions, online marketing strategies, and best practices for success in 2025

Key insights from market developments in 2024, emphasizing how jewelers can remain resilient in turbulent times and leverage new Arete projects for business growth

01 Introduction

The global diamond industry experienced a transformative year in 2024, characterized by significant market corrections and structural changes that impacted all participants. Natural diamond prices reached multi-year lows following the post-pandemic surge, with certified polished diamond prices declining approximately 15-20% throughout the year. The fourth quarter, however, showed signs of price stabilization.

Diamond Market Review 2024

2024 Diamond Industry Annual Review A Year of Transformation

Most significantly, as reported in December 2024, De Beers Group has accumulated its largest diamond stockpile since the 2008 financial crisis, valued at approximately $2 billion.

This substantial inventory buildup, which has persisted throughout much of the year, reflects deeper challenges in the market, including weakened Chinese demand and increased competition from lab-grown alternatives.

Strategic Production Control In response to these challenges, major producers implemented strategic production controls, with total production reaching approximately 105 million carats - marking the lowest production volume since 1995. De Beers' decision to reduce rough diamond prices by 1015% in December signaled a shift in market dynamics and acknowledged the need to align rough diamond prices with polished market realities.

The lab-grown diamond segment continued its evolution, achieving roughly a 25% market share by value compared to natural diamonds. This segment experienced significant price corrections at wholesale and retail levels in developed markets, while in the Czech Republic, retail price changes are expected to follow with a characteristic 12-18 month delay.

Changing Consumer Behavior Consumer behavior showed marked changes throughout 2024.

While the U.S. market demonstrated resilience (jewelry sales increased by 2.5% in November), China recorded a dramatic decline, with diamond jewelry demand decreasing by up to 50%.

This regional variability shifted global market dynamics, with India emerging as the second-largest consumer market.

Digital transformation became increasingly crucial as approximately 18-21% of jewelry transactions moved online, often driven by omnichannel marketing strategies focused on Instagram, combining visual appeal with educational insights about topics such as labgrown diamond identification. Retailers have found that excessive promotion of lab-grown diamonds as entirely ethical and sustainable can backfire once consumers learn about the facts of their production.

Despite Initial Price Declines of 15-20%, Signs of Stabilization Emerged in Q4.

Laboratory-Grown Diamonds Approach 25% Market Share, Raising Questions About Sustainability

01 Introduction

Diamond Market Review 2024

Arete in 2024 The year 2024 marked important milestones in our dynamic journey: Successful launch of Arete.Tools, expanding to more than 16 countries with specialized gemological equipment Strengthened international presence through strategic trade show participation

Continued emphasis on industry leadership position in the Czech Republic through advanced workshops Development of next-generation digital infrastructure with the upcoming AreteApp Diamond Marketplace section

Looking Ahead to 2025 Several factors are expected to shape the industry: Tightening of sanctions against Russian diamonds from March 2025 (affecting more diamond sizes than before) Further retail price corrections for lab-grown diamonds in emerging markets Growing importance of digital presentation and marketing investments, especially through Instagram and other social channels Emphasis on supply chain transparency and sustainability For jewelers to succeed in this evolving environment, careful attention to inventory management, clear differentiation of natural and lab-grown diamond values, and strong digital capabilities are essential. The coming year brings both challenges and opportunities, particularly for those who combine traditional expertise with modern retail approaches.

Arete Maintains Its Unwavering Commitment to Supporting Partners with State-of-the-Art Equipment, Market Intelligence, and Innovative Solutions

02 Global Diamond Market Analysis 2024

The diamond industry reached an inflection point in 2024, with prices of natural certified polished diamonds (0.30 ct and above) declining by 15-20% as part of a broader market restructuring. While challenging, this correction began to support more sustainable market conditions. Data from the fourth quarter indicates emerging price stability, particularly in specific categories such as 1-carat natural polished diamonds. Fancy natural diamonds demonstrated resilience to market fluctuations, with price increases of up to 2.1% in certain segments.

Diamond Market Review 2024

Global Diamond Market Analysis 2024 Market Corrections and Structural Changes

Digital transformation has become imperative, with online jewelry sales accounting for 18-21% of transactions. However, the true impact of digital technologies extends beyond direct sales November data indicates that even traditional brick-and-mortar purchases are increasingly influenced by online research and social media engagement, particularly through visual platforms like Instagram.

Forward-Looking Indicators Market Dynamics and Price Trends The strategic management of rough diamond supply became paramount, with global production falling to 105 million carats. Major producers, led by De Beers, took decisive steps to align rough diamond prices with market reality through a 1015% price reduction in December. This adjustment came as average consumer spending on finished jewelry showed encouraging signs, rising by 6.5% despite the challenging economic environment.

The retail environment exhibits increasingly complex segmentation. While lab-grown diamonds have gained up to a 25% market share by value in sales according to some analyses, their impact varies significantly across markets. In developed Western markets, retail prices for lab-grown diamonds have seen considerable corrections.

Jewelry sales revenue for lab-grown diamonds in the USA decreased by 10.6% while the number of pieces sold increased by 35% year-over-year.

Many jewelers in the USA are beginning to return to natural diamonds.

Strategické dopady na trh

Traditional market patterns are rapidly evolving.

Natural diamond retailers have largely pivoted towards higher-value pieces in the luxury segment.

They have abandoned the entry-level jewelry segment, which has been captured by laboratorygrown diamonds, now widely available due to significant price compression. The diamond jewelry market is experiencing pronounced polarization.

This trend is already evident in the US market and is expected to reach other markets with the typical lag time. This strategic shift comes at a time when fancy colored diamonds are showing remarkable strength. Pink diamonds have appreciated by nearly 400% since 2005, demonstrating sustained demand for unique and rare stones.

The industry faces additional regulatory constraints in 2025 with expanded Russian sanctions affecting diamonds from 0.50 to 1.00 carat. This regulatory development, combined with reported shifts in consumer behavior towards higher clarity grades (VS and above) in natural diamonds, indicates an increasing market focus on quality and provenance.

Recent data from US retailers suggests a growing bifurcation in consumer preferences.

While the overall jewelry market demonstrated resilience with a 2.5% revenue increase in November, gains were not uniform across segments. High-quality natural diamonds and affordable laboratory-grown pieces showed particular strength, while mid-market offerings faced more challenging conditions.

Section Summary The convergence of market corrections, geopolitical pressures, and evolving consumer preferences has created a more complex trading environment requiring sophisticated strategies. This is particularly evident in light of De Beers' recent accumulation of its largest stockpile since 2008, valued at approximately $2 billion, and their 20% production cuts. Jewelers' success increasingly depends on clear market positioning, supported by robust digital capabilities and careful inventory management. As the market stabilizes, participants must balance traditional expertise with technological adaptation while maintaining clear value propositions for increasingly discerning consumers.

02 Global Diamond Market Analysis 2024

Diamond Market Review 2024

Consumer Behavior and Retail Evolution The retail environment underwent a significant transformation in 2024, shaped by changing consumer preferences and rapid technological advancement. Digital channels have become vital, with online transactions representing an increasingly significant share of total revenue.

Omnichannel marketing, particularly on Instagram, has emerged as the primary strategy, combining engaging visual elements with educational content about natural and laboratorygrown diamonds.

Regional Insights North America Demonstrated resilience during the holiday season, with average jewelry spending in November showing a yearover-year increase of 4.6% India Emerged as the secondlargest consumer market, helping to offset slower demand in other regions.

China Experienced a significant slowdown, with diamond jewelry demand declining by up to 50%.This sharp decrease reflects both economic challenges and the government's recent crackdown on luxury lifestyle content and "wealth-flaunting" on social media, fundamentally altering how luxury goods, including diamond jewelry, are promoted and perceived in the Chinese market.

For jewelers today, building a strong and credible brand is essential. Long-term success in the diamond industry doesn't come from short-term gains achieved through misleading sustainability claims, but from building strong customer relationships based on trust and transparency.

While misleading advertising and false claims may boost sales in the short term, they ultimately damage brand reputation and diminish consumer trust.

Conversely, an honest and transparent approach to sustainability and ethical business practices builds customer trust and loyalty, which is crucial for long-term growth and prosperity.

03 Lab-Grown Diamond Impact

The laboratory-grown diamond segment expanded rapidly in 2024, reaching up to 25% market share by value compared to natural diamonds. The price differential between natural and laboratory-grown diamonds has increased to 80-90% for comparable carat weights, clarity grades, and color grades. This has resulted in the creation of two distinct consumer segments.

While the unit sales of laboratory-grown diamonds recorded a 50% increase in November, average expenditure decreased by approximately 10.6% due to continued price compression.

Misleading Narratives Marketing laboratory-grown diamonds as inherently ethical and sustainable overlooks the socioeconomic consequences associated with their production. This narrative often amplifies outdated and inaccurate stereotypes about the natural diamond industry while ignoring its modern reforms and positive contributions to African development.

Diamond Market Review 2024

Impact of LabGrown Diamonds Capturing up to 25% Market Share by Value

Laboratory-grown diamonds, also referred to as synthetic diamonds, are produced using advanced technological processes that replicate either high pressure, high temperature (HPHT) conditions under which natural diamonds form, or through chemical vapor deposition (CVD).

While they share similar physical, optical, and chemical properties with natural diamonds, they can be distinguished through specialized gemological testing.

Laboratory-Grown Diamonds: Challenging the Environmental Sustainability Myth Laboratory-grown diamonds largely dominate the "eco-friendly" narrative in media and marketing, which is often misleading. Despite certain claims, only a fraction of laboratory-grown diamonds can be genuinely considered low-emission or sustainably produced, particularly considering the high energy requirements for production in regions like China and India. Many manufacturers face criticism for greenwashing, presenting their products as entirely ethical and carbon-neutral while their actual carbon footprint may be substantial.

From an ethical perspective, there exists a broader social issue: If laboratory-grown diamonds significantly cannibalize the natural diamond market, millions of jobs could be at risk in African countries where natural diamond mining forms the foundation of economic growth.

Botswana serves as the prime example. At the Facets 2024 conference in Antwerp, Botswana's president emphasized how diamond exports have transformed the local economy and warned of potential impacts if demand for natural diamonds drastically declines.

Ethical Concerns with Laboratory-Grown Diamonds Laboratory-grown diamonds, though often promoted as a sustainable and ethical alternative, have significant socioeconomic impacts that are frequently overlooked in public discourse. A primary concern is the potential job losses in diamond-mining regions, particularly in African countries such as Botswana, Angola, and Namibia, where diamond mining plays a central role in national economies and local livelihoods.

Key Points: 1. Economic Dependence: Countries like Botswana have developed robust and ethical mining practices and heavily rely on diamond revenues to fund public services such as education, healthcare, and infrastructure development.

2. Modern Mining Standards: Today's diamond mining industry operates under strict ethical standards ensuring fair wages, safe working conditions, and environmental oversight, far removed from colonial-era exploitative practices.

3. Negative Ripple Effects: Reduced demand for natural diamonds could directly lead to mine closures and job losses, further deepening poverty and inequality in these regions. This impact could destabilize local economies and impede development.

04 Fancy Colored Diamonds

Throughout 2024, the Fancy Color Diamond Index (FCDI) exhibited overall stability, underscoring the enduring appeal of fancy color diamonds even during broader market uncertainties. By the end of the third quarter, the FCDI recorded a cumulative year-over-year decline of approximately 1.0%, representing a relatively modest adjustment compared to fluctuations in other sectors.

Diamond Market Review 2024

Fancy Color Diamonds in 2024 Demonstrated Overall Price Stability

Key Insights Overall Performance: Modest price decreases across all colors and sizes, with declines generally remaining below 1% per quarter Long-term data since 2005 shows continued resilience, with overall growth exceeding 200% for fancy color diamonds Pink Diamonds: Demonstrated effectively 0% year-over-year change, indicating significant stability The Fancy Vivid Pink subcategory (particularly in sizes 3 carats and above) occasionally showed increases exceeding 2.0%, offsetting minor declines elsewhere

Yellow Diamonds: Concluded the period with a year-over-year decline of approximately 3.5%, reflecting the weakest performance among the three main color categories Certain segments, such as Fancy Vivid Yellow in lower carat weights, recorded modest gains, highlighting selective demand for stones with higher color intensity Blue Diamonds: Recorded a -1.7% change over the last 12 months, with variations depending on size and color intensity Certain segments, such as 8-carat blue and 8carat Fancy Vivid Blue diamonds, showed slight improvement, emphasizing selective buyer interest

Overall Market Impact

Section Summary

Despite quarterly fluctuations, the fancy color diamond market demonstrated remarkable resilience in 2024. Some pink and vivid yellow segments performed exceptionally well, indicating sustained demand for stones with higher color intensity. Meanwhile, yellow diamonds generally declined while blue diamonds showed mixed results. According to FCRF analysts, these patterns reflect a combination of economic factors, changing consumer preferences, and the inherent rarity of vivid fancy color diamonds.

Natural fancy color diamonds demonstrated greater price stability in 2024 compared to many other diamond market segments. While some categories experienced modest declines, specific vivid subcategories - particularly within pink diamonds - maintained their premium pricing and highlighted the appeal of rarity. As noted by the FCRF, this resilience underscores the importance of monitoring the distinct market dynamics of each color category to gain a comprehensive view of segment performance.

05 European Market Focus

The European luxury market, including the diamond segment, is undergoing significant transformation in 2024.

Despite global slowdown, some European markets show surprising resilience, primarily due to strong domestic demand.

European Context The European luxury goods market is adapting to new conditions throughout 2024. Customer demographics have changed significantly - while the number of Russian clients has markedly decreased, tourists from Asia, particularly China, are gradually returning, albeit in smaller numbers than pre-pandemic.

A key factor is the growing importance of local clientele. European consumers, especially in premium segments, demonstrate stable interest in luxury goods, including fine jewelry. This trend is particularly evident in traditional luxury destinations such as Paris, Milan, and London, where local customers partially compensate for decreased tourism revenue.

Czech Market The Czech luxury brand market, concentrated in Prague's Pařížská Street, is characterized by the dominance of multinational companies. In jewelry and diamond retail, only a few Czech companies operate alongside international brands, primarily ALO diamonds with two boutiques.

Despite economic slowdown, this segment shows remarkable stability. Louis Vuitton Czech Republic achieved record net profits of nearly 300 million crowns in 2023, with revenues exceeding one billion crowns. In fine jewelry and diamond sales, branded retailers maintain stable interest, mainly due to strengthened domestic clientele. A fundamental shift is the reorientation toward domestic customers. According to current data, Czech clients now represent up to 85% of luxury brand revenues, marking a significant departure from previous dependence on foreign tourists.

Diamond Market Review 2024

Focus on European Markets Resilience of Local Markets During Global Slowdown

Differing Dynamics Between Branded and Non-Branded Retailers In 2024, the Czech market shows a growing performance gap between branded and nonbranded jewelry and diamond retailers. While established luxury brands maintain stable revenues, traditional jewelry companies without strong branding and marketing strategies face declining sales.

This trend is particularly evident in the diamond jewelry segment. Non-branded jewelers, who previously relied primarily on personal recommendations and long-term market presence, are now losing market share to branded stores. This is mainly due to changing consumer behavior, with customers increasingly considering brand prestige, digital presence, and overall shopping experience when selecting luxury goods.

Brand building and digital presence play crucial roles. Jewelry stores and luxury brands that consistently invest in brand development and online visibility demonstrate more stable sales than those lagging in these areas. In the jewelry and watch segment, for example, Carollinum expects to exceed one billion crowns in revenue in 2024.

A specific characteristic of the Czech market is its lag behind global trends, which provides retailers time for adaptation. This is particularly evident with laboratory-grown diamonds, where price adjustments in the Czech market are expected to follow global developments with a 12-18 month delay.

05 European Market Focus

Diamond Market Review 2024

Growing Gap Between Branded and Non-Branded Jewelry Retailers The lag behind global trends provides retailers time for adaptation. This is particularly evident in the laboratory-grown diamond segment, where the Czech market has not yet experienced the dramatic price decline observed in Western markets. While the global market in 2024 witnessed several significant bankruptcies of companies specializing exclusively in laboratorygrown diamonds due to sharp price declines, the Czech retail market still maintains significantly higher price levels. However, this time lag may pose a risk for Czech retailers who hold substantial inventory of laboratory-grown diamonds purchased at higher prices or have based their business strategy on this segment.

The expected price correction, likely to impact the Czech market within 12-18 months, could be financially challenging for these retailers.

The Czech luxury goods market demonstrates surprising resilience in 2024. The key to success lies in adapting to the changed customer structure with greater emphasis on local clientele, investing in digital transformation, and building strong brands. Czech market specifics include a high proportion of domestic customers and certain lag behind global trends, providing space for strategic adaptation.

A particularly significant trend is the growing gap between the success of branded and nonbranded jewelry and diamond retailers. While branded retailers benefit from investments in marketing and brand building, non-branded jewelers face challenges related to changing consumer preferences.

This development suggests that investing in brand building and modern sales channels is no longer optional but a necessary prerequisite for success in the current market.

05 European Market Focus: Facets 2024

Diamond Market Review 2024

Facets 2024 The Facets 2024 conference in Antwerp represented far more than just an annual meeting for the global diamond industry. It became a platform where industry leaders openly acknowledged strategic shortcomings of recent decades and presented concrete plans for their correction. With over 500 delegates from around the world, the conference focused on key challenges facing the industry, from marketing strategies to geopolitical changes.

Antwerp Conference

Marketing Strategy Transformation One of the conference's most significant moments was the frank acknowledgment of the industry's marketing failure. David Kellie, CEO of Natural Diamond Council, emphasized that "nobody sees value in marketing until you remove it." These words resonated with the reality of the past 15 years, where the absence of generic marketing after De Beers ended its campaigns in the 1990s created a vacuum in communicating natural diamonds' value.

To address this situation, an ambitious plan was presented to increase the NDC's marketing budget by $65 million, which would restore the total annual budget to $100 million. The innovative aspect is primarily the funding mechanism - introducing a 0.05% fee on rough diamond imports, to be implemented in cooperation with major diamond centers in Antwerp, Dubai, and India.

Structural Changes in Supply Chain De Beers announced significant changes to its distribution strategy for 2025. The company is reducing the number of Sightholders and decreasing total allocations by 20-30% in value.

New rules require more balanced purchase distribution between half-years (50/50) and establish a minimum annual purchase of $15 million. These changes signal efforts to consolidate and strengthen supply chain stability.

Al Cook, CEO of De Beers, emphasized the need for collective responsibility in promoting natural diamonds during his presentation. "We cannot leave marketing solely to De Beers and Botswana," Cook stated. "We need everyone to engage in promoting natural diamonds." A significant breakthrough was Botswana's announcement of creating its own certification node for diamonds destined for G7 markets. This move represents a departure from the original plan of a single control point in Antwerp and opens the way for similar initiatives in Namibia and Angola. Botswana's President Duma Boko emphasized his country's commitment to transparency and responsible mining practices.

Growing Influence of Laboratory Diamonds One of the most compelling sessions at Facets 2024 addressed the growing influence of laboratory-grown diamonds and misconceptions about their social and environmental benefits.

Panel participants challenged claims that synthetic diamonds are inherently more ethical or sustainable. They emphasized the considerable energy requirements for their production and socioeconomic damage caused by reduced demand for natural diamonds, particularly in African countries dependent on diamond mining for employment and development.

Charting a Sustainable Path Forward

Facets 2024 clearly showed that the diamond industry stands at the threshold of significant transformation. Success will depend on individual players' ability to adapt to new conditions and actively participate in rebuilding natural diamonds' image. For wholesale clients, this means the necessity of a strategic approach to purchasing, active participation in marketing initiatives, and readiness for greater supply chain transparency.

This transformative period brings both challenges and opportunities. Those who can quickly adapt to new conditions and actively engage in collective efforts to strengthen the natural diamond sector will have the best prerequisites for success in the coming period.

As the natural diamond industry moves in an ever-evolving environment, insights from Facets 2024 provide a roadmap for maintaining its authenticity, relevance, and positive impact on the world.

06 Global Luxury Goods Market

2024 marks a significant turning point for the luxury sector. After years of exceptional growth during and post-Covid-19 pandemic, the industry faces its first decline since 2008. According to Bain & Company analysis, global personal luxury goods sales decreased by 2% to EUR 363 billion in 2024. This decline stems from several factors, including weakened demand for "accessible luxury," geopolitical uncertainty, and reduced consumer confidence, particularly among aspirational customers.

Diamond Market Review 2024

Global Luxury Goods Market

Market Polarization and Digital Evolution

In previous years, operational profitability in the sector increased from 21% in 2019 to 26% in 2022, enabled by significant price increases of key products. However, this trend shifted in 2024, as elevated prices and economic uncertainty led to sales decline and disruption of the sector's previous growth.

Market Overview and Key Insights The year's most prominent trend is unprecedented market polarization. While the ultra-wealthy customer segment remains stable and even grows in some categories (particularly in super-luxury automobiles +4% and luxury accommodations +3%), regular customers are significantly reducing their spending. Bain & Company estimates that the market has lost approximately 50 million consumers from this category over the past two years.

Geographic diversification presents a mix of challenges and opportunities. The Chinese market, a long-standing growth driver in the luxury segment, faces significant slowdown with demand declining up to 50% in some categories.

This downturn is partially offset by an unexpected boom in Japan, where a weak Yen attracts wealthy Chinese tourists, leading to 12% growth in that market. The American market shows remarkable resilience with 2.5% growth in the jewelry segment, while the European market adjusts to sanctions' impact on Russian clientele.

The aggressive pricing policy of luxury brands from 2020-2023 is now hitting its limits. Some brands increased prices by up to 66% (Dior), while others like Hermès took a more conservative approach with a 20% increase. This significant price escalation is beginning to affect purchasing behavior even among the most loyal customers.

The industry's digital transformation continues at an unprecedented pace: 18-21% of transactions now occur online, and 70% of the purchasing process begins with digital research. Social media, particularly Instagram and rapidly growing TikTok, are becoming primary channels for luxury goods discovery.

Sustainability and ESG are becoming key success factors. 85% of luxury brands now report their emissions, and 60% have established science-based reduction targets. The circular economy and second-hand market are growing in importance, recording 15% year-over-year growth. Brands are investing in supply chain transparency and implementing ESG metrics in executive bonuses.

Section Summary The luxury segment is undergoing fundamental transformation characterized by market polarization, geographical demand shifts, and digital revolution. Successful brands must balance maintaining exclusivity while adapting to new consumer trends. While ultra-wealthy clientele remains stable, the key challenge is engaging younger generation customers who value sustainability and authenticity. This development has direct implications for the diamond market, which must respond to changing consumer preferences and growing importance of transparency and ethical sourcing.

07 Growth and Innovation at Arete

2024 marked a pivotal year in Arete's development, driven by strategic expansion into new markets and technological advancement.

Our initiatives focused on streamlining operations for jewelers in a complex and rapidly changing market environment.

Diamond Market Review 2024

Growth and Innovation at Arete A Transformative Year of Technological Growth

Launch of Arete.Tools

Leading in Education

The launch of Arete.Tools in January 2024 responded to growing demand for reliable gemological equipment, particularly for diamond verification and screening. The platform, now serving clients in more than 16 countries, has helped jewelers gain easier access to specialized equipment - including gemological microscopes, UV lamps, and laboratory-grown diamond screening instruments.

Our commitment to industry education remained strong throughout 2024. The advanced workshop conducted by Branko Deljanin in January was fully booked, highlighting the need for professional insight into laboratory-grown diamond identification. Ongoing discussions about a second meeting in Prague in the latter half of 2025 underscore our commitment to professional education in this region.

Clients value our deep gemological expertise.

We have successfully supplied equipment to major Swiss watch brands, Indian diamond cutting facilities, and European gemological laboratories. These customers appreciate our practical approach to selecting the right tools unlike many other vendors, we use these instruments daily, enabling us to offer informed recommendations.

International Market Expansion Arete expanded its international presence by participating in three major trade shows in 2024.

These events helped establish new relationships and broaden our knowledge of global market trends. We plan to strengthen our trade show presence in 2025, as we consider it key to further growth.

Digital Innovation: The New AreteApp Perhaps our most ambitious effort was the comprehensive redesign of our B2B portal AreteApp. The platform, scheduled for launch in the first quarter of 2025, brings revolutionary features:

The Diamond Marketplace

The Diamond Studio

Offers real-time access to an inventory of over 600,000 diamonds worldwide, reducing the need for multiple quotations.

An application enabling jewelers to present diamonds under their own brand with fully customizable margins and presentation tools without Arete branding.

Enhanced B2B Features

Mobile Access

Online ordering of certified diamonds will streamline order placement and improve efficiency.

Native iOS and Android applications ensure mobile device access for managing all transactions.

08 Strategic Outlook 2025

As we enter 2025, the diamond industry stands on the threshold of another transformation. While sanctions against Russian diamonds have been in effect since March 2022, their enhanced enforcement from March 2025 - applying to diamonds below 1 carat and above 0.50 carats will further impact supply dynamics. Consumer preferences continue to shift toward online research and purchasing. The natural diamond market may experience renewed stability, supported by ongoing strategic controls in rough diamond production.

Diamond Market Review 2024

Market Development and Opportunities in 2025

Lab-Grown Diamonds Laboratory-grown diamonds are likely to maintain their rapid growth trajectory, and markets like the Czech Republic are expected to experience significant retail price corrections. Jewelers who balance their offering of natural and laboratorygrown diamonds - while maintaining transparency in sustainability claims - can benefit from this sector's expansion.

Positive Trends Emerging Markets: Growing Indian and other regional markets offer new revenue sources New Consumer Demographics: Younger buyers emphasize brand authenticity, whether natural or laboratory-grown, provided the narrative is clear and accurate

Industry Collaboration and Education

Action Points for Jewelers Conduct quarterly audits of your digital presence: Strengthen omnichannel marketing, particularly on Instagram, where visual appeal meets educational content Monitor price positions of laboratory-grown and natural diamonds monthly: Keep pace with rapidly changing price shifts, especially considering sanctions and market corrections Track marketing ROI: Data-driven approaches justify and optimize marketing budgets in today's inflationary environment Maintain responsible branding: Overstating laboratory-grown diamonds as entirely sustainable can backfire, so remain honest and emphasize trust

Continuing professional education and collaboration will be crucial in 2025 as market complexity intensifies. Retailers who invest in staff training and build strong networks are better prepared for adaptation, whether dealing with sanctions, new technologies, or changing consumer demands.

Conclusion The industry's transformation in 2024 has laid the groundwork for a potentially dynamic 2025.

Businesses that adapt to changes, technologies, and ethical transparency are positioned to capitalize on evolving consumer tastes and global supply changes. Both natural and laboratory-grown diamonds possess strong emotional appeal; success depends on effectively communicating their respective values.

At Arete, we remain committed to guiding our partners through these changes. Through a combination of innovative technology (Arete.Tools, AreteApp), practical gemological expertise, and ongoing educational initiatives, we strive to equip jewelers with resources to overcome challenges and capitalize on emerging opportunities. Looking ahead, we focus on transparent solutions, informed strategy, and genuine partnership, enabling us to help clients thrive in an ever-evolving diamond market.

Sources

Diamond Market Review 2024

Sources used: Rapaport- Rapaport News & Market Comments - Martin Rapaport and Joshua Freedman Tenoris.bi -Edahn Golan (proprietary diamond data analytics) McKinsey & Company -The Diamond Industry Is at an Inflection Point (Article, November 26, 2024)

By Nathan Flesher, Sebastian Reiter, and James Whitecross - Link to article State of the Diamond Market Monthly Report - By Paul Zimnisky, CFA - www.paulzimnisky.com Diamond FACTS Report -Natural Diamond Council - https://www.naturaldiamonds.com/diamond-reports/ The Fancy Color Research Foundation - www.fcresearch.org Financial Times: "Tough luxury market dims Dior's shine", Financial Times, October 18, 2024, Adrienne Klasa, Thomas Hale and Wang Xueqiao "Golden Goose shows how not to generate a luxury buzz", Financial Times, June 19, 2024 "What to expect in luxury in 2025", Financial Times, Kati Chitrakorn, December 23, 2024 "What luxury is telling us", Financial Times, Rana Foroohar, December 23, 2024 "How luxury priced itself out of the market", Financial Times, October 8, 2024 "Luxury brands bank on their own American dream", Financial Times, November 19, 2024 Hospodářské noviny: "Český trh s luxusem roste i když svět zažívá ochlazení. Pařížská může pokořit další rekordy", Hospodářské noviny, Vladan Gallistl, 23. 10. 2024 IInternal company data Internal sales, supplier and market analyses were used in this report

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