Diamond becomes one of the topics of an episode of Explained, a documentary series on Netflix released end of last year. Watching this 25-min episode over the weekend, I have a thought to jot the key points down, for my own record. In addition, the article here could be a perfect summary for any diamond lovers who want to better their understanding on why diamond is so special and how De Beers created its diamond playbook.
In jewellery, there are so many gemstones apart from diamonds. And almost every one of them is made up of more than one element, while diamond is basically a solid form of the element carbon only.
What is the value of a diamond? An interesting point is – to a scientist, the value is indeed its inclusion inside the stone. What they found inside could allow them to understand better the Earth and its evolution. But to normal people like us – the more inclusion the diamond contain, the lower value it will be.
Who defines the above rule? Here comes the playbook by De Beers, who orchestrated the whole diamond market for more than decades.
Control diamond supply
In the old days, De Beers secured a large interest in almost all the diamond mines. And the enterprise was not just a diamond manufacturer, but also a buyer. It strategically bought a lot inventory from other suppliers.
Limit diamond distribution
De Beers owned a large quantity of diamond stock. However, the group strategically kept the stock, and lowered the output when the demand declined. They were not willing to witness large stock flowing freely on the market.
Create demand
With controlled supply, De Beers’s next step is to create people’s demand towards diamonds. The diamond group launched a very effective advertisement campaign with the iconic slogan “A Diamond is Forever”. Consumer education is very important. People realized that they shall keep diamond forever, but not for resale.
What’s more? Movies & songs helped.
Gone with the Wind, 1939
“What kind of a ring would you like, my darling?” Rhett Butler
“A diamond ring. And do buy a great big one.” Scarlett O’Hara
“Gentlemen Prefer Blondes” Original Soundtrack
Diamonds Are a Girl’s Best Friend – Marilyn Monroe
The advertisement and tagline went viral all over the world, including Japan and China. In Hong Kong, it came with a perfect and elegant translation “鑽石恒久遠，一顆永留傳”.
Link spending to professional success
We must have heard about our salary is a good benchmark to decide how much a diamond engagement ring shall cost. For example, in US, some say we should spend two months’ salary on an engagement ring, while perhaps three months’ in Japan… When we traced the saying back to its origin, it was actually one of De Beers’ strategies too.
Defining the diamond value
Setting a benchmark of how we value a diamond was not something done by De Beers. Thanks to the Gemological Institute of America (GIA), the Diamond 4Cs and its grading system were created. For people outside the industry, they feel assured when getting a certificate issued by the institute. And De Beers leveraged the 4Cs and promoted it largely.
Use prices as marketing
Even though De Beers ended its monopoly days, diamond’s price was still stable. The current three diamond players, including De Beers, Alrosa, Rio Tinto, are trying their best to keep the prices by maintaining a steady output on the market. Also, diamond becomes a luxury. No one including consumers is willing to see the price going down, as the price reflects its value.
Synthetic diamond in!
The lab-grown diamonds become a threat to real diamonds as their quality go better while price getting cheaper. This is particularly interesting as the episode describes the last tactic as “if you can’t beat synthetic diamonds, join them”.
Why? Two years ago, De Beers launched Lightbox, a brand offering synthetic diamonds in quality and affordable price ($800 per carat).
This claimed to be a smart move, as De Beers tried to position and define the value of synthetic diamonds, in a way that they are never the same as natural diamonds.
On the other hand, it also indirectly promoted the development of lab-grown diamonds.
The Explained documentary also featured other topics including billionaires, animal intelligence, cults, and more. I would say the episode is pretty a good watch as it looked at how diamonds evolve from a status symbol to a sparkling sign of everlasting love, thanks to De Beers’ diamond playbook…
Hope you enjoy the 4-minute read here.
Photo credit: De Beers, Lightbox, Netflix
