We are confident that you will find this article one of the most interesting and eye-opening articles you will ever cross. Few people are aware of this topic; one has to be an insider in the diamond industry to understand why different cultures do not use the same criteria and preferences when buying diamonds.
IT ALL BEGAN WITH DE BEERS
One single entity, the South African company De Beers, is responsible for transforming the diamond industry into what it is today. In reality, diamonds would never have become the definitive choice for engagement rings without their flawlessly executed brilliant marketing campaign, summed up by the phrase "Diamonds are forever".
For De Beers, like any other greedy company, dominating the diamond industry was one of the ultimate goals. And they succeeded; for many decades afterwards, they controlled over 90% of all the world's mined diamond supply, netting them an unimaginable level of power and influence over the diamond industry. And they put this power to good use.
As a result of leaks and investigative journalism over many years, history now shows that De Beers gathered all the major diamond miners around the world and struck deals with them all to buy all of their supplies. In return, De Beers would market diamonds to the entire world, transforming diamonds into an essential symbol for anyone looking for a way to express undying love or propose an eternal marriage. As far as the two sides were concerned, this was the deal of the century. For miners, it meant a single reliable buyer of all their products without having to market them and compete with each other. In contrast, for De Beers, it meant they would dictate the prices of diamonds worldwide by limiting the supply of diamonds released to the market. While this undertaking sounds simple, the world is quite a big market to sell to, and the diamond mining production, once the deal went live, was expected to increase dramatically.
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?
Firstly, let's clarify that when we say "all the stock", we mean all the different quality and varieties of diamonds that naturally exist, not the number of diamonds.
Let's now turn our attention to the problem of selling all the stock that was guaranteed to be purchased. As it turned out, De Beers' founder was a marketing visionary with even sharper business acumen who quickly realized that this challenge could be turned into an opportunity of a lifetime. While simple, this strategy was a product of careful planning and thought. The plan involved dividing the global diamond market into three distinct segments based on quality - low, mid, and high, respectively.