These are challenging times for the industry. But why is the industry going through these challenging times? Shrinking bank finance to the industry is a major issue worldwide. But why hasn’t the industry got around to solving the finance issue? Can lab-grown diamonds disrupt the natural diamond industry? Why are we allowing disruptors to impact the diamond industry?
These are some of the issues and viewpoints put out by speakers at the inauguration of the 38th World Diamond Congress, the biennial meeting of the heads of the various diamond bourses that constitute the World Federation of Diamond Bourses (WFDB) and the various member delegations from countries that members of the International Diamond Manufacturers Association (IDMA), which is taking place at the Bharat Diamond Bourse (BDB) in Mumbai.
Setting out his view, BDB President Anoop Mehta observed bluntly, “2019 is going to be tough and the industry needs to unite. The Gem & Jewellery Export Promotion Council (GJEPC) and the BDB frequently differ on a variety of issues, but at the end of the day, we both realise that we represent one industry. So I hope all the issues the diamond industry faces are sorted out by the time this congress winds up.”
Bank lending to the industry globally is about $13 billion today, but it is shrinking and projected at being just $11 billion in the next couple of years, observed WFDB President Ernie Blom in his opening remarks. There is shrinking confidence in the industry and it needed to work toward reassuring financial institutions and consumers alike, he added.
Blom said, however, that he was confident in the industry’s ability to tackle the challenges. “Like the promise that a diamond puts forward, I too believe in you and I believe in us,” he said, adding, “there is no sign that consumer interest in diamonds has flagged as evidenced by the $82 billion in diamond jewellery sales last year.”
IDMA President Ronnie Vanderlinden, in his address, added the issue of a lack of consumer excitement with the diamond industry product that needed collective tackling. “While the efforts of the Diamond Producers Association (DPA) are great, we can’t leave it at that. Diaomonds need to be promoted from the top down. We need to unify our efforts and not only improve the trade, but also promote our product to the consumer. If the consumer loses interest, we won’t be around to discuss these issues, because we won’t have a business,” he said.
Blom said that the entrance of Lightbox, the De Beers lab-grown diamond jewellery brand had caused consternation among many in the industry, but observed that the ability of the brand to sell a one-carat diamond for $800, stated clearly to the consumer what the lab-grown product was worth. Blome quoted actress Jaclyn Smith, who once compared diamonds and angels, saying they were alike because they couldn’t be made and had to be found.
Vanderlinden, in his observations on lab-grown diamonds, further focussed the issue by asking, “Why are undisclosed lab-grown diamonds entering the diamond pipeline? We need to do something!”
Blom also highlighted the issue of the US Federal Trade Commission’s (FTC) guidelines on diamond nomenclature, reaffirming the industry’s stand that there had to be clear and separate names for natural and lab-grown diamonds. Vanderlinden observed that while the FTC guidelines had changed, its law on the way products are sold had not and the industry needed to work with that in mind.
World Diamond Council President Stephane Fischler commented in his speech, “The industry has one big treasure — its reputation. Every time our reputation fails, we pay a price.” Fischler cited the example of the Indian diamond manufacturing industry, which had transformed itself from being a predominantly low-end, low-tech enterprise, to the modernised behemoth that it was today. “The change came about because a few good people with a vision of what needed to be done, pushed changes through,” he said.
World Jewellery Confederaton CIBJO President Gaetano Cavalieri, citing the fact that the consumer had the right to choose, said the diamond industry had no choice but to engage with lab-grown diamond stakeholders to give consumers a clear choice of product.