Photo by mafic
Moti Ganz, the chairman of the Israel Diamond Institute, gave an interesting speech last week at the Third International Rough Diamond Conference in Tel Aviv. Speaking on the topic of producer strategies, Ganz argued that there is too much polished diamond on the market because manufacturers are polishing when they don’t have customers lined up to buy the stones.
Ganz asked rough producers to refrain from the use of tenders and auctions as a way to unload rough, saying they hurt manufacturers and the producers themselves in the long run. He also called for rough producers to help promote diamonds as a luxury product in the manner of De Beers, who spend 3% of sales turnover on advertising. His reasoning:
In the long-run this investment will be repaid, as the awareness of diamonds increases in the consumer market. The diamond is not a simple luxury product. It is not a bag – you buy it one week, and next year when it goes out of fashion, you buy another one. Women give bags that are out of fashion to their housekeepers. I have never heard of a woman who gave her diamond jewelry to a housekeeper. They pass on diamond jewelry to their daughters and granddaughters or set them in new jewelry. The diamond never wears out in their eyes. Therefore, the investment in marketing must be more sophisticated than that of other luxury items.
I agree—diamonds get passed on and the love they represent only grows with time. But should the responsibility to promote diamonds fall higher on the supply chain? I think Ganz might be on to something, if a new marketing effort from rough producers is done in a coordinated way.
Read Ganz’s speech here, and an A-DX.net piece about it here.
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