The diamond industry is facing an unprecedented crisis, with lab-grown diamonds disrupting the market and advertising alone proving insufficient to restore demand. But is there a solution? A business model that has evolved over the last 20 years may hold the key to reviving the sector.
Historically, diamond marketing was defined by two eras: the De Beers monopoly, which controlled over 80% of the rough diamond market until the late 1990s, and the current competitive landscape. De Beers invested billions in advertising the 'Diamond' brand, believing its monopoly would last indefinitely. However, independent diamond sales by Russian, Canadian, and Australian producers shattered De Beers’ dominance, leaving the industry without a central marketing force.
As the sector scrambled for alternatives, consultants suggested branding and Supplier of Choice strategies—ideas that were theoretically sound but difficult to implement. Without a steady global marketing budget, diamond demand waned, leaving many businesses struggling for survival.
The answer? Integration. The most sustainable model for the diamond industry combines both diamond polishing and jewelry manufacturing. By directly incorporating polished diamonds into jewelry sales, companies can create built-in marketing budgets and naturally drive retail demand.
Jewelry businesses, however, must maintain a balance. Unlike supermarkets, they cannot offer an overwhelming selection of similar products. Instead, by controlling product mix and strategically shaping consumer choices, jewelers can more effectively drive diamond sales.
This integrated approach is already proving successful. Brands like HK Kisna, KGK's Entice, and Martin Flyer have built strong retail presences by incorporating polished diamonds into their jewelry operations. Companies such as Rosy Blue, Kiran, and HK have successfully extended their reach down the supply chain, positioning themselves as industry leaders without relying on monopolistic control.
The future of the diamond industry hinges on embracing this model. Integration isn’t just an option—it’s the path to long-term survival and growth. Will more companies follow this lead, or will the industry continue its struggle against market disruptions?