The well-heeled diamond travels many a continent before it reaches New York, the world’s largest diamond market.
After being mined in South Africa, Asia, South America or Australia, the stone is cut and polished in Asia or Europe before it is sold via one of the 24 registered diamond exchanges (also known as “bourses”) around the world or direct to wholesalers or diamond jewelry manufacturers. It is then crafted into jewelry commissioned by a retailer or jewelry designer. Manufacturers sometimes also design the jewelry and sell it directly to retailers.
Outside of Asia and Africa, it is Antwerp, Belgium Belgium’s Antwerp for over half a millennium has been the undisputed diamond capital of the world. Here is why:
- Eight of 10 rough diamonds worldwide are handled there.
- Half of all polished diamonds pass through Antwerp.
- Diamonds account for 7 percent of Belgium’s total exports.
- There are 1,500 companies in Antwerp’s diamond district.
- "Cut in Antwerp" is the highest-quality international label.
- Most of the most important sightholders of the Diamond Trading Co. (formerly De Beers Consolidated Mines Ltd.) live in Antwerp.
The city is also famous as a trade center for other precious stones. However, during the past two decades, business has been changing in this pre-eminent diamond-trading center.
Competition from abroad, emergence of greater demand in China and India, and tighter regulations by the Belgian government to promote financial transparency have all transformed the trade. Most diamond companies in Antwerp are outsourcing cutting to India and Asia, leaving the firms to focus instead on global marketing and sales. This has led to a recent emergence of cutting and polishing centers in Dubai and Shanghai., that is the major diamond trading hub for the West. Israel is also a complementary trade center, mainly supplying North America. Dubai is the regional distribution center for the Middle East.
But it is New York, the primary port of entry into the United States, that is the largest market for diamonds in the world.
Total U.S. retail sales for the diamond jewelry category — more than 50 percent of sales worldwide — were $33.7 billion in 2005, a $2.2 billion increase over 2004 sales of $31.5 billion, according to the Diamond Information Center.
Diamonds have inspired many a lover. Their sheer beauty and brilliance lend them a mystique that seduces. Indeed, there is something magical about them. They have captured the imagination of people for thousands of years.
How much of this mystique is a marketing ruse is a hotly debated topic in the industry.
According to De Beers, the world’s largest diamond mining company, women truly desire diamonds and the warm, sparkly feeling that accompanies the act of wearing a diamond. The task of marketing is merely helping women recognize and achieve this desire to own the precious stone.
In fact, De Beers' most lasting imprint on the diamond industry may be its marketing of the gem as an eternal symbol of love and devotion, while at the same time promulgating the myth that the commodity is incredibly scarce.
With one of the most successful marketing The diamond industry always looks for new ways to drive sales. This is done either by introducing new jewelry or by emphasizing gift-giving occasions.
Christmas holiday sales generated $4.9 billion in diamond sales in 2005, up 6 percent over 2004.
In 2000 the industry introduced the Three-Stone Diamond category, which is symbolic of a couple’s past, present and future. The category saw sales rise 11 percent in 2005 and has grown an average of 27 percent a year since its introduction.
In 2005 the industry launched the concept of Journey Diamond Jewelry, defined as a graduated piece of diamond jewelry that symbolizes how a couple’s love grows over time.
The Diamond Right Hand Ring launched in 2003 also continues to be popular. Last year, it helped the non-bridal fashion diamond ring category to grow by 15 percent, making it the second year of double-digit growth.
The engagement ring category is also important, representing $4.8 billion in sales last year, which is up 7 percent. The average diamond engagement ring is valued at $2,750. slogans of the 20th century, “A diamond is forever,” the advertising campaign launched in 1948 helped institutionalize the modern tradition of giving a diamond ring as part of a wedding engagement and also helped limit the secondary market for used diamonds.
N.W. Ayer, the advertising agency that created the campaign, touted the slogan as revolutionary because it was promoting not a particular brand, but simply the idea of the “eternal emotional value surrounding the diamond." The campaign reached all levels of society – pushing diamonds as a symbol of love in popular films to pushing newspaper and magazine articles that emphasized the romantic value of diamonds.
A diamond’s journey ends up being as multifaceted as the finished stones. From the mines of Africa to the cutting factories of India to the necklines of fashionable women everywhere – it truly is an almost unimaginable journey.
While the grueling working conditions for many of the diamond miners in sub-Saharan Africa and the pockmarked past of the illicit diamond trade’s funding conflicts in Sierra Leone and Angola in the 1990s are disconcerting, there are signs of hope.
The international diamond industry is taking serious moves to regulate the industry, with at least 69 countries worldwide adhering to the Kimberley Process, which aims to track rough diamonds every step of the way from the mines to your local jeweler.
And while imperfect, the diamond industry does provide valuable jobs in many developing countries. Countries like Botswana demonstrate the positive effect the industry can have on a nation – improving its economy and the health care of its people by providing antiretroviral drugs to those suffering from HIV/AIDS.
With the breakup of the De Beers cartel on the diamond industry in 2004 and the emergence of lucrative mines from Russia to Australia and Canada, the industry is just getting going. More expansive exploration for diamond reserves may lead to more jobs, improved economies, improved international compliance with industry norms and lower prices for consumers.
After polishing up its rough past, the international diamond industry can look to a brighter future that benefits everyone – from the breadwinner in Africa to the bride-to-be in New York.
Sources: Glitter & Greed: The Secret World of the Diamond Cartel, wsws.org, diamondintelligence.com, wsj.com, De Beers, brilliantearth.com, time.com