Powerful, emotional and consistent branding helped to create the De Beers diamond monopoly. When it was threatened in the 1990s by conflict diamonds and producers such as Russia distributing diamonds outside the De Beers-controlled channel, De Beers again turned to branding to save the day. They repositioned themselves in a market they no longer control and are now more profitable with a 40% market share than when they had an 80% market share in the 1990s. Let me bring you into the picture World Brands.
De Beers engages in exploration for diamonds, diamond mining, diamond trading and industrial diamond manufacture. Mining takes place in Botswana and Namibia (through its joint-venture partnerships with the respective governments), as well as South Africa and Canada, in every category of industrial diamond mining: open-pit, underground, large-scale alluvial, coastal and deep-sea. The Diamond Trading Company, the rough-diamond sales and distribution arm of the De Beers Group, sorted, valued and sold about 80% of the world’s rough diamonds by value until the early 1990s.
These diamonds were then sold to the Diamond Trading Company Sightholders whose representatives travelled to London several times a year for the sale or Sight as it was called. Today Sightholders (now numbering only 79) are required to comply with the De Beers’ best practice principles, which set out various objective standards of conduct in three main areas: business, social and environmental responsibilities. (I designed brandmarks for two of the Sightholders at the turn of the century and no mention was made of these noble standards; Mr $ and his rare appearances were the only standard I was reminded about.)
Get the picture? De Beers is big – very, very big! It is well known for its monopolistic practices throughout the previous century, when the company used its dominant position to manipulate the international diamond market by persuading independent producers to join its single-channel monopoly and then flooding the market with diamonds similar to those of producers who refused to join.
The company purchased and stockpiled the diamonds produced by other manufacturers in order to control prices through supply. Ernest Oppenheimer stated: “Commonsense tells us that the only way to increase the value of diamonds is to make them scarce, that is to reduce production.” Now all that was left for the monopoly to become fully fledged was to increase consumer demand.
A diamond is a girl’s best friend
Consider this: a diamond – the rarest and hardest natural mineral known – is worth no more that half its retail value. There is no hard-and-fast rule for the pricing of polished diamonds, but professionals in the polished-diamond industry use a worldwide market price list, the Rapaport, based on the four Cs, which are carat, cut, colour and clarity, as a general guideline for evaluating polished diamond prices. And a jeweller usually adds a 100% mark-up to the Rapaport quoted price. Apart from industrial applications, diamonds have no other value except when polished for their perceived beauty, which we all know is in the eye of the beholder. This brings us to another aspect: the power of emotion.
In 1999, I experienced this first-hand while prospecting for diamonds (just like the diamond diggers did at the turn of the century) along the Orange River, a stone’s throw away from where the first diamond was found in South Africa. There are no words to describe the feeling when you find your first diamond: a flash of brilliant white light coming from among grey-black gravel on the sorting table after days of backbreaking labour, processing tons of gravel. Your heart starts racing and you are overcome by absolute joy and feelings of elation! God chose you to find this diamond and you feel so blessed and special. Although it was only 0,13 of one point of one carat and called “ice-white”, it might as well have been a 100-carat flawless blue-white.
I was once told by a diamond diver in Port Nolloth on the remote Diamond Coast of the South African West Coast: “Men arrive in planes and luxury cars looking for diamonds and leave looking for a lift home, left only with a pair of jeans and the shirt on their backs.” Wise words which sum up the power that prospecting for diamonds holds for men.
But what is in it for the men buying diamonds for the ladies? After all, it costs them a lot of money for an adornment they never wear themselves and mostly do not own; in the words of Marilyn Monroe’s song, “diamonds are a girl’s best friend”. What has made diamonds one of the best-known and most sought-after gemstones since ancient times?
The diamond’s – from the ancient Greek (adamas) meaning “invincible” – ability to prismatically break up white light into its component colours, giving the diamond its characteristic fire, is what makes diamonds so desirable as jewellery. Let’s face it, a diamond ring on a woman’s finger overtly advertises her (and the purchaser’s) wealth. The honour of wearing a one-in-a-million, one-carat blue-white diamond confers a special status previously only reserved for royalty. Thanks to some brilliant branding by De Beers, the purchase of diamond jewellery has become a socially acceptable way of buying a woman’s affection. Actress Zsa Zsa Gabor, who was married nine times, famously remarked: “I never hated a man enough to give him back his diamonds.”
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