According to the latest financial data released by De Beers, the world's largest diamond producer, its global diamond raw embryo sales decreased by 5.5% from the previous cycle during the seventh sales cycle of the year ended September 10. The 507 million US dollars in the same period last year fell by 0.4%.
This is the worst performing cycle for De Beers since the release of relevant sales data in 2016.
If compared with the 7th sales cycle data released by De Beers in 2016 (then 639 million US dollars), the diamond original embryo sales at this time decreased by 134 million US dollars, equivalent to a 21% decline.
It is understood that De Beers currently has about 80 sightholder customers. At its peak, the company operated 19 diamond mines worldwide, producing more than 80% of the world's diamonds, resulting in the diamond market basically in the seller's market.
De Beers has also always adopted a package sales model: they sell diamonds together, and diamonds of different sizes and quality are placed in sealed plastic bags with price tag. Buyers only have to buy or not to buy two options.
With low performance innovation, De Beers has made a new sales model adjustment.
Company CEO Bruce Cleaver said that De Beers offers Sightholders the opportunity to reconfigure some smaller, lower value diamond embryos. In other words, the company changed its previous package sales practices and now allows sightholders to refuse to buy small, relatively cheap diamonds.
Some analysts said that this unusual move indicates the current downturn in the low-end diamond market. The last time De Beers took similar measures was two years ago, when India’s vigorous banknote movement shocked the demand for rough diamonds.
This new strategy for smaller diamonds, together with the newly launched artificial decorative diamond brand Lightbox in June this year, shows that De Beers' business strategy is undergoing a major turning point. At the same time, this has also caused many insiders to worry that the price of diamonds may fall, and investors are worried about the prospects of the diamond market.
For many years, De Beers has been a blunt critics of synthetic diamonds. The company’s top executives have vowed never to sell synthetic diamonds, or even invented a device that can identify laboratory synthetic diamonds to “squeeze†the synthetic diamond market.
The tightening of market sales today has forced De Beers to change his mind: it is time to attack the field of synthetic diamonds.
Although synthetic diamonds have the same physical, chemical, and optical properties as natural diamonds, the price difference between the two is different. The price of a 1-carat synthetic diamond currently on the market is about $4,000, while the equivalent natural diamond is priced at around $8,000.
According to De Beers’ previous voice, in order to meet the needs of consumers, the price of synthetic diamonds that will be on sale in September is actually astonishingly low – about $800 for a carat, which is the price of an existing synthetic diamond. /5, 1/10 of the price of natural diamonds.
Such a low price strategy has triggered panic among artificial diamond producers.
And relying on absolute positional advantage to control the market through production and price is De Beers' practice of industry competition.
It is reported that the US laboratory diamond industry has filed a complaint with the US Federal Trade Commission, accusing De Beers of price dumping and predatory pricing.
Synthetic diamonds are the trend of the times, and returning to reasonable prices is the unanimous desire of producers, suppliers, sellers and consumers.
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