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Uncut diamonds from southern Africa and Canada are seen through a jeweller's loupe at De Beers headquarters in London January 17, 2011.STEFAN WERMUTH/Reuters

Diamonds risk losing their sparkle with luxury consumers as competition with other high-end products intensifies, and the solution could be an industry-wide effort to step up advertising and branding efforts.

De Beers SA, a diamond producer owned by global miner Anglo American PLC, warned in a recent industry report that the diamond's hold on luxury consumers' spending is slipping, even as global demand for the stones is projected to grow. The luxury world is becoming more competitive as cars, designer leather bags and vacations are competing in the luxury category against tablets and other tech gadgets. De Beers says that it will require industry investment to "safeguard" the diamond's status.

"Unfortunately, in terms of advertising, the share of voice in jewellery advertising has decreased substantially – maybe by about half – in the last 10 to 20 years," said Philippe Mellier, chief executive of De Beers, in a video. "It's an issue because obviously if you don't talk enough about a luxury product it's going to impact on sales."

Global sales of luxury jewellery grew at a compound rate of nearly 2 per cent annually in the 10 years to 2013, according to market research from data group Euromonitor International. By comparison, luxury electronic gadgets grew by 14 per cent and fine wines by 11 per cent.

In 2013, global sales of diamond jewellery climbed to $79-billion (U.S.), according to the De Beers report, which the company plans to issue annually.

Keeping a hold on consumers' attention is one of the diamond industry's biggest challenges, said Des Kilalea, analyst with RBC Dominion Securities. Companies must build "the diamond brand against the competition of major luxury categories, which are taking share of consumer spending," he wrote in a recent note.

The global diamond industry could benefit from working together to change this pattern, Mr. Kilalea said. "Our view is that a global industry association to promote diamond jewellery is key to reversing this trend, if anti-trust concerns can be allayed."

De Beers' relationship with advertising dates back to 1939 when it's well-known "Diamonds are forever" campaign awakened U.S. consumers' relationship with diamonds. Today, brands such as Tiffany & Co. and Cartier, owned by Compagnie Financière Richemont SA, are also big beneficiaries of their brand's power over consumers, according to research from Bain & Co. from 2012.

The Bain study showed that while diamond jewellery is the "preferred luxury purchase" of women in the U.S., these women don't pick diamonds as the gift they'd most like to receive. The report also indicated that diamonds "may have lost some of their magical appeal" with younger consumers in the U.S.

"One of the solutions to recover our share of voice in terms of diamond jewellery is to talk more about diamonds," Mr. Mellier said, adding that De Beers thinks investing heavily in advertising of branded diamond jewellery will be the best way to compete as a luxury item against other products.

The industry has benefited from the U.S. economic recovery as well as fast-growing appetites for diamonds in emerging markets such as India and China in recent years. But the U.S. is still the largest diamond market making up 39 per cent of global consumption, according to Dominion Diamond Corp., the Toronto company once known as Harry Winston Diamond.