Bounceback: Will Natural Diamonds Follow Swiss Watches?

The Swiss watch industry was devastated by quartz technology in the 1970s. Exports halved in a decade as Seiko, Citizen, Casio, Timex and other brands flooded the market with mass-produced watches that did essentially the same job. They told the time.

But that was only the start of the story. The industry eventually bounced back, redefining Swiss watches as objects of luxury, craftsmanship, heritage, status and collectability, that also happened to tell the time.

Its share of global watch export value plunged from 55% in the early 1970s to 30% in the 1980s. Today it's back to about 50%.

There are clear parallels for the natural diamond industry, according to a report published this week by the Dubai Multi Commodities Centre (DMCC) to coincide with the Dubai Diamond Conference 2026, held from October 25 to 27 under the theme "Diamond 2.0: A Strategic Reset - Reigniting Desire, Unlocking New Value."

The Swiss Parallel, produced jointly with Originalluxury, a Swiss research organization, argues that natural diamonds must learn from the watch industry's revival by strengthening their appeal around geological rarity, provenance and enduring value.

The idea itself is not new, but the approach is. The report proposes that the natural diamond industry deliberately cede the commodity end of the market to lab grown stones, rather than continue spending marketing money trying to defend a segment where the economics are stacked against it.

"The natural diamond industry is still spending capital, management attention and credibility defending sub-$3,000 stones against lab-grown diamonds. At current price gaps, that fight is structurally unwinnable," the report says.

Its vision is a more clearly divided market with lab grown stones as the accessible option and natural diamonds as the premium product. Leave the lab growns for the Timex buyers, and market the high-end natural stones to those with a Rolex on their wrist.

The industry as a whole needs to demonstrate rarity, establish independent certification, make pricing more transparent and give buyers a realistic way to resell their stones.

It's an ambitious action plan. But the diamond-watch analogy may not be quite so simple.

"Swiss watchmakers can choose to produce fewer, higher-value watches, adjusting their output along the quality spectrum," the report says.

"Diamond miners cannot. An ore body must be processed as a whole: a full run-of-mine yields the entire distribution of sizes, colours, and qualities simultaneously."

The report's answer is not to stop selling lower-value natural diamonds. It is to stop spending marketing money trying to defend them against lab grown stones and redirect those resources towards building a premium market.

But can the premium segment generate enough additional value to compensate for the weaker returns on the rest of the mine's output? The watch industry could change its product mix. Diamond miners still need profitable markets for everything that comes out of the ground.

And does the consumer even care? Splash out anything from $15,000 to $1 million-plus on a Patek Philippe, Audemars Piguet, Richard Mille or Vacheron Constantin, and you're buying a complex manufactured object.

Its movement, finishing, design, complications, construction and brand history readily distinguish it from any other watch.

Not so with diamonds. A natural stone and a lab grown graded with the same 4Cs will look identical even under a loupe. That makes the premium proposition much harder to communicate to a would-be customer.

The report's answer is to sell the story behind the stone - its geological origins, rarity and provenance, backed by independent certification.

But that assumes consumers will pay a substantial premium for a difference they cannot see. A Swiss watch can demonstrate its craftsmanship on the wrist. A diamond's billion-year history is rather harder to show.

The challenge for the industry is to persuade consumers that origin matters and that it's worth paying for.

And there's another important difference. The Swiss watch industry has an established secondary market that helps turn desirability into demonstrable value.

The global secondary-market for luxury watches through dealer-led sales was $16.73 billion in 2025, according to Dubai-based watch-market data provider EveryWatch, up 36.4% year on year.

Collectors can identify specific models, examine production histories, compare auction results and assess resale prices. Not every watch retains its value, but an established market allows buyers and sellers to test what individual pieces are worth.

Diamonds have no comparable system at anything like the same scale. Provenance does not automatically translate into a resale premium, and the price a consumer pays at retail can be very different from what a dealer will offer.

The DMCC report proposes building the missing infrastructure.Possible? Yes. Easy? No.

The industry would need consistent standards, reliable provenance, enough buyers and sellers to create liquidity, and a track record showing that resale values stand up over time. That is a market to be built, not one that already exists.

There are, without question, real similarities between the two industries. Both face competition from products that challenge their traditional value propositions.

The Swiss experience shows that an industry can recover from a technological shock by changing how its products are positioned and valued. It does not prove that the diamond industry can repeat that success.

Swiss watchmakers had identifiable brands, craftsmanship and design, and an established collector culture.

The diamond industry must persuade consumers to pay more for geological origin, while still finding profitable markets for the full range of stones its mines produce.

It must also build much of the certification, pricing and resale infrastructure that a credible investment market would require.

The Swiss watch industry shows what can happen when repositioning works. The hard part is proving that the same formula can work for diamonds.

Have a fabulous weekend.