Indonesia Diamond Market Outlook to 2030

Indonesia Diamond Market Overview

• The Indonesia diamond market reached a valuation of USD 35.88 billion in 2023, driven by increasing demand for luxury goods among the growing affluent population. The market's growth is further supported by the expansion of retail channels, including e-commerce platforms, and the rising influence of global luxury trends. The demand for high-quality and certified diamonds has seen a significant increase as consumers prioritize the value and authenticity of their purchases.
• The Indonesia diamond market is dominated by key players such as PT Central Mega Kencana, Mondial Jeweler, Frank & Co, Tiffany & Co, and The Palace Jeweler. These companies have established strong market positions through extensive retail networks, exclusive product offerings, and strategic partnerships with international diamond suppliers. PT Central Mega Kencana, in particular, continues to lead the market with its focus on luxury branding and customer experience.
• Major cities like Jakarta, Surabaya, and Bali dominate the diamond market in Indonesia due to their high concentration of wealth, affluent consumer base, and developed retail infrastructure. In 2023, Jakarta alone accounted for a significant share of the market, driven by its status as the economic and cultural center of Indonesia. The presence of luxury shopping malls and high-end retail outlets in these cities further enhances their market dominance.
• In 2023, PT Central Mega Kencana announced the opening of its largest flagship store in Jakarta, a significant development aimed at catering to the increasing demand from high-net-worth individuals. The store features an extensive collection of luxury diamond jewelry and provides personalized services to enhance the customer experience. This expansion reflects the companys strategy to consolidate its market leadership and tap into the growing demand for luxury goods in Indonesia.

Indonesia Diamond Market Segmentation

• By Product Type: The Indonesia diamond market is segmented by product type into diamond rings, diamond necklaces, diamond earrings, and diamond bracelets. In 2023, diamond rings dominated the market due to their enduring popularity for engagement and wedding purposes. The cultural significance of diamonds in Indonesian weddings, coupled with increasing disposable income, has fueled the demand for diamond rings.
• By End-User: The Indonesia diamond market is segmented by end-user into individual consumers, commercial entities (such as jewelers and retailers), and institutional buyers (such as investment firms). In 2023, individual consumers dominated the market due to the strong cultural preference for personal jewelry, particularly for special occasions like weddings and anniversaries. The rising number of high-net-worth individuals and their preference for luxury goods have driven this segments growth.
• By Region: The Indonesia diamond market is segmented into North, South, East, and West Indonesia. In 2023, North Indonesia, particularly the Greater Jakarta area, emerged as the dominant region, driven by its concentration of wealth and high population density. The presence of major retail hubs and affluent neighborhoods has made the North region a focal point for luxury goods, including diamonds.

Indonesia Diamond Market Competitive Landscape

• Mondial Jeweler (2023): In 2023, Mondial Jeweler expanded its presence in East Indonesia by opening a new flagship store in Surabaya. The store offers an exclusive collection of high-end diamond jewelry, targeting the growing affluent population in the region. This strategic move is part of the companys broader plan to increase its market share across Indonesia by tapping into emerging markets outside Jakarta.
• The Palace Jeweler (2024): The Palace Jeweler introduced a new line of ethically sourced diamonds in 2024, emphasizing its commitment to sustainability and responsible sourcing. The initiative includes partnerships with international diamond suppliers that adhere to the highest ethical standards. The new product line has resonated with environmentally conscious consumers, leading to increased sales and strengthening the brand's reputation in the market.

Indonesia Diamond Industry Analysis

Indonesia Diamond Market Growth Drivers

• Rising Affluence and Consumer Spending: The increasing affluence of Indonesias population, particularly in urban areas, has led to higher consumer spending on luxury goods, including diamonds. In 2023, the luxury goods market in Indonesia experienced significant growth, with retail value sales increasing by 11%, amounting to IDR 36.3 trillion. This growth is attributed to the rising affluence of the population, particularly in urban areas, leading to a 15% increase in average household expenditure on luxury goods, including high-end jewelry
• Expansion of Retail Infrastructure: The rapid development of retail infrastructure in Indonesias major cities has made luxury goods more accessible to a broader consumer base. Between 2021 and 2023, over 200 new luxury retail outlets were opened across Jakarta, Surabaya, and Bali, providing consumers with greater access to high-quality diamond jewelry. This expansion has been instrumental in driving market growth.
• Tourism Growth and International Influence: Indonesias booming tourism industry, particularly in Bali, has attracted a significant number of high-net-worth international visitors. In 2023, the country welcomed over 15 million tourists, many of whom contributed to the sales of luxury goods, including diamonds. The influence of international luxury trends among these tourists has also had a positive impact on the domestic diamond market.

Indonesia Diamond Market Challenges

• Currency Volatility: The Indonesian Rupiah's volatility against major currencies, such as the US Dollar, poses a significant challenge for the diamond market, which relies heavily on imports. In 2023, currency fluctuations led to an increase in import costs, affecting pricing strategies and consumer purchasing power. This issue is particularly challenging for smaller retailers with limited financial flexibility.
• Regulatory Hurdles: Stringent regulations and high import duties on luxury goods, including diamonds, continue to be a barrier for the market. In 2023, import duties on diamonds remained high, leading to increased costs for retailers and ultimately for consumers. The lengthy customs clearance process also delays the introduction of new diamond collections, impacting market competitiveness.

Indonesia Diamond Market Government Initiatives

• Digital Economy and E-Commerce Roadmap (2024): The 2024 Digital Economy and E-Commerce Roadmap introduced by the Ministry of Communication and Information Technology aims to support the growth of online retail in Indonesia. This roadmap includes measures to enhance digital payment systems and cybersecurity, which are critical for the growth of e-commerce platforms selling luxury goods, including diamonds. The initiative is expected to increase online sales of diamond jewelry in the coming years.
• Kimberley Process Certification Scheme (KPCS): Indonesia is a participant in the Kimberley Process Certification Scheme (KPCS), which was established to prevent conflict diamonds from entering the mainstream market. This initiative requires that all rough diamonds be certified as conflict-free before they can be exported or imported. The KPCS aims to enhance transparency and accountability in the diamond trade, which is crucial for a country like Indonesia, where diamond production has historically been limited.

Indonesia Diamond Market Future Outlook

The Indonesia diamond market is expected to experience substantial growth by 2028, driven by the rising affluence of the population, expanding retail infrastructure, and supportive government initiatives. the demand for luxury goods, including diamonds, is expected to rise significantly.

Future Trends

• Digital Transformation in Luxury Retail: The Indonesian diamond market is expected to witness significant digital transformation, with retailers increasingly adopting online platforms to reach a broader audience. The integration of technologies such as virtual try-ons and blockchain for authenticity verification will enhance the customer experience and increase online sales.
• Sustainability and Ethical Sourcing: Sustainability is likely to become a central focus in the Indonesian diamond market, with more consumers demanding ethically sourced and environmentally friendly products. Retailers will need to adapt by offering certified conflict-free diamonds and transparent supply chains, which will become key differentiators in the market.