Diamond industrialists voiced their vision of the industry state at the Third Diamond Conference in Tel Aviv on February 11-12.
Rough&Polished
Chairman of the Israel Diamond Institute Moti Ganz called upon rough producers to support advertising of polished diamonds as luxury items. “Every rough producer should support the promotion of the diamond as a luxury product. This task must not be left in the hands of a single rough producer throughout the world,” Moti Ganz said. In his vision, all producers should act in the same way as De Beers, which invests 3% of its profit into advertising campaigns. “In the long run this investment will be repaid, as the awareness of diamonds increases in the consumer market,” he added.
As for De Beers proper, shortly before the conference National Jeweler reported that this company decided to slash its U.S. marketing budget. According to Sally Morrison of the Diamond Information Center, the cutback has been propelled due to the perception of the American economy heading for a recession in 2008.
De Beers has taken a decision to avoid female-targeted advertising. Instead, they will concentrate their efforts on diamond promotion among male buyers.
It is noted that following the news about two jewelry chains (Alpha Omega and Friedman’s) entering into bankruptcy proceedings, the declaration by De Beers served another blow to the already troublesome U.S. jewelry industry.
“If you look at the new consumer markets in China and India, there is a huge new demand pool,” DTC Managing Director Varda Shine said to the London-based “Economic times”. “It will be a very challenging year in the States.”
She said big polished diamonds would attract higher prices more as valuable investments, rather like works of art. “The very rare diamonds, whether they are blues or pinks or big white stones, are going to continue appreciating. Those that are very rare are like pieces of art. The number of billionaires is growing,” Ms. Shine adds. Varda Shine stressed that the ultra wealthy, whether American, Chinese or Russian, wanted exceptional stones. “Better quality, bigger sizes, and all colours.”
Her opinion is shared by Gareth Penny, Managing Director of De Beers, who addressing the Diamond Conference in Tel Aviv called the industry to include the new markets of China and India into their expansion strategies to ensure continuous diamond demand.
“This is where the growth is going to come from in the next 10 years and we need to pay closer attention to these markets,” Penny said.
In addition to building up the industry’s presence in Asia, he noted the need to improve the diamond retail experience, and “collective” diamond jewelry marketing campaigns. “De Beers can’t do it alone anymore,” Penny said.
In its marketing strategy, De Beers is already paying significant attention to India. In particular, De Beers Group Marketing is organizing Diamond Seasons - annual month-long campaigns to promote diamonds among consumers.
The campaign launched from December 12, 2007 to January 12, 2008 in six Indian cities coincided with the Indian wedding season, which was one of the periods of peak jewelry sales. Prasad Kapre, DBGM Managing Director, said that according to his estimates in 2007 India registered a growth of 27 percent in diamond consumption.
Within the frames of another promotion action, six well-known Indian women were proposed to design diamond jewelry pieces. These were then manufactured by six Indian jewelry companies and sold at Internet auctions. The proceeds from the sales were used for social projects.
The aim of this move proposed by De Beers through the Diamond Information Center was to bolster the public image of diamonds and that of the FOREVERMARK technology in India.
The six jewelry pieces were sold at $8,200-55,800. Each of the designers was independent in her decision as to where the proceeds would be donated.
China and India registered an increased number of purchases made online. The online sales in China grew to the level of $3.8 billion in 2007 (against $2.4 in 2006). The Indian B2C market went up 50% reaching $1.2 billion.
Jewelry retailers in Asia and in the Asia-Pacific Region able to become part of the e-market in these countries will outstrip western retailers, whose place in the online market is already occupied by such giants as Amazon, eBay and Blue Nile, which seized a substantial segment of consumers due to the well rendered service, convenient interface and the “right moment.”
