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Why different cultures Buy different quality Diamonds
Mar 10, 2021
Diamonds
Why different cultures Buy different quality Diamonds
The article is certain to be one of the most interesting and eye-opening you will ever read. It is not common knowledge that different cultures do not use the same criteria and preferences when buying diamonds; one needs to be an insider in the diamond industry to understand that.

 

IT ALL BEGAN WITH DE BEERS

There is one single entity responsible for transforming the diamond industry, the South African company De Beers. Without their flawlessly executed brilliant marketing campaign, summed up by the phrase "Diamonds are forever", diamonds would not have become the definitive choice for engagement rings.
A company like De Beers, which is greedy by nature, had the ultimate goal of dominating the diamond industry. Nevertheless, they succeeded in controlling over 90% of the world's mined diamond supply for many decades thereafter, gaining unprecedented influence and power in the diamond industry. And they used that power well.
It has now been revealed through leaks and investigative journalism that De Beers gathered all the major diamond miners around the world and struck deals with them to buy their entire supply of diamonds. De Beers would then sell diamonds around the world, making diamonds an essential symbol for anyone seeking to express undying love or propose an eternal marriage. For both parties, this was the deal of the century. The miners gained a single reliable buyer for all their products and didn't have to compete with one another for market share. By limiting the supply of diamonds available to the market, De Beers was able to dictate the price of diamonds worldwide. Even though this may seem like a simple undertaking, the world is a very large market, and diamond mining production was expected to increase dramatically once the deal went into effect.

 

DE BEERS GLOBAL MONOPOLY CAME WITH A BIG PROBLEM

HOW COULD DE BEERS MAKE SURE THEY COULD SELL ALL THE STOCK THEY HAVE COMMITTED TO BUY?

It needs to be clarified that when we refer to "all the stock", we are referring to diamonds of all qualities and varieties that naturally exist in the world, not only the number of diamonds.

We can now focus on the problem of selling all the stock that was guaranteed to be purchased. De Beers' founder, who had a visionary marketing approach as well as a sharp business sense, quickly realized that this challenge could be turned into an opportunity that could not be passed up. In spite of its simplicity, this strategy was carefully planned and carefully thought out. Specifically, a low, medium and high-quality segmentation of the global diamond market was envisioned.
Why different cultures Buy different quality Diamonds

Group target 1:

All diamonds at the lower end of clarity and colour were marketed to this group. We'll begin with the colours: diamonds in the lower range of the colour spectrum fall into the categories of "H" to "M", which includes hard-to-move diamonds like champagne-coloured ones. It was decided that "G" was the cut-off colour since it is considered above the norm or the limit of what this segment of customers would pay for. In terms of clarity, it ranged from SI1 all the way down to P3/I3. Targeting primarily the American market, these lower quality ranges and American customer inclination to prefer size over everything else was indeed a match made in heaven.

Historically, America has been the leading market for diamonds, which aligns perfectly with De Beers' strategy of moving and liquidating the majority of diamonds mined from the ground, which are naturally of the lower quality range. Lesser quality and, therefore, lower prices allowed the buyers to buy larger stones, which suited the American culture of excess and ostentation. For a vast majority of them, "the bigger, the better" was an essential truth they believed to be true in nearly everything in their lives. As direct neighbours of the US and thus heavily influenced by them, Canada followed in their footsteps and was one of the key targets of Group 1. It should be noted that the Canadian preference was not entirely homogeneous since it still reflected some influences from Group target 2.

Group target 2:

This group of consumers was targeted with diamonds in the middle of the colour and clarity spectrum. In terms of colours, the midrange consisted of colours "F" to "I", with "F" being the most expensive colour a buyer would pay for. A target range of clarities was set from VS2 down to SI2, where "VS1" was marketed as the highest clarity option. Europe and the UK were the target locations in this group, and countries like Australia and New Zealand naturally followed their trend.

Group target 3:

This group was the exclusive target of the highest end of the clarity and colour range. The high-end range consisted solely of the following three colours: "D", "E", and "F". In spite of the fact that "G" is still 'white', the buyers of this group still considered it to be a lesser colour. With respect to clarity, the targets were "FL", "VVS1", and "VVS2". As the lower-cost option, "VS1" still had a presence. The buyers of the higher-end of diamond qualities were primarily from Asia. Due to the substantial price premium required for the finest diamonds, these markets would only be able to afford smaller diamonds than other target markets. Looking back, De Beers' strategy makes perfect sense. A small diamond would appear more prominent on Asian women's fingers since their fingers are thinner and smaller than the average. As a general rule, Asian culture places more emphasis on quality and brilliance than on its size, so when celebrating and displaying a diamond, they emphasize its quality and brilliance rather than its size. Through a keen and astute understanding of complex cultures and their unique purchasing preferences, De Beers successfully matched Asia with Group target 3.

In summary, De Beers' strategy of breaking the world into three distinct markets and then gaining control of them was amazingly successful. It set the standards on how customers of different countries and cultures choose diamonds to this date. A custom or tradition is a way of life that is passed down from one generation to the next. A young couple seeking to cement their love will seek inspiration from their elders and societal norms. As traditions and tastes continue to be passed down, diamond purchasing trends will remain consistent for a long time as they have been woven into the fabric of society and its culture. In light of the history and generational impact of targeted diamond marketing, think first about what you want before you consider what your parents or grandparents would choose. Ultimately, your loved one will wear it, not anyone else.

Note by our head gemmologist Since lab grown diamonds Hong Kong cost 75% less, we have noticed more customers are buying VS stone instead of SI1 stones. And people are preferring DEF lab grown diamonds instead of G and H colours.
To learn more about lab grown diamonds visit our home page, where we go in depth about lab grown diamonds Hong Kong and lab grown diamonds HK.

Why different cultures Buy different quality Diamonds