JCSA Annual Report 2021

JCSA Annual Report 2021

JZA

 

Never Judge a Book by its Cover

Lesson 1

Picture the scene: You’re in one of the oldest and most exclusive jewellery shops in South Africa, situated in West Street in Durban.

A magnificent chandelier takes centre-stage around which a staircase rises imposingly to carry you upwards to any one of the three storeys of luxury which await your attention. In this tranquil environment, soft music plays. The staff are quietly respectful and knowledgeable; the men are formally attired in suits and the ladies would not look out of place at the opera. In this hushed, palace-like environment, tea is served morning and afternoon in delicate chinaware while customers browsed through the range of Patek Phillippe, Cartier, and Ebel watches, Christoff cutlery and Edinburgh and Waterford crystal, and the finest jewellery. I was, at the time, privileged to manage this splendid shop.

Then, one day an incident occurred which left a deep impression on me. An old man entered our hallowed shop, dressed in shabby clothes and looked, for all intents and purposes, like someone off the street. He shuffled over to a R3,500 14k Kruggerand bracelet that was on display in our window and asked to see it. I offered to show him through the window, quite keen for him to be outside the shop as soon as possible. However, he insisted, and I reluctantly took it out of the window, and he took it with his frail and dirty hands, turning it over and examining it carefully. He thanked me and said he would be back. Needless to say, we hauled out the air freshener and cleaned the bracelet thoroughly before placing it back in the window. A little while later, and much to my surprise, he came trundling back into the shop with R3,500 in cash and asked for the bracelet to be gift wrapped.

Lesson 2

One of my long-standing customers was a quiet and gentle man; just your average looking and softly spoken chap. He was also the owner of one of the largest privately-owned sugar cane farms in South Africa at the time. He would drive the hour journey to Durban to our shop and would only ever deal with me.

Here’s the lesson I’ve taken away from this: Never ever judge your customers by their appearance or what they are wearing.  

In fact, I know of a jeweller who won’t put prices on his pieces because he prefers to make up the price depending on what car they are driving or by the watch they are wearing! I have personally experienced these environments where I can feel the eyes of the staff evaluating me as I move about the shop and it makes me incredibly uncomfortable.

The moral of the story is, respect everyone, you never know who you are attending to and they could just help pay your salary.

Kind regards

Jeremy

Independent publisher Isikhova Media
will début the launch issue of JZA –
Your Jewellery Magazine, SA’s first and
only dedicated consumer retail jewellery
magazine, next month.

JZA October article

Dear Jewellers
The Jewellery Council of South Africa (JCSA) is thrilled to announce the opening of sales bookings for members to advertise in the first issue of JZA – Your Jewellery Magazine, South Africa’s first and only dedicated consumer-retail jewellery magazine.
The JCSA has officially endorsed the magazine which will be published by Isikhova Media. The first issue will debut in November 2020 ahead of the summer retail season.
We are excited to be part of this publication. Our industry has had to rethink much of what we do and how we do it. JZA is part of our strategy of doing just that. The publication will develop and sustain a highly focussed consumer presence to help retailers rebuild customer loyalty and retention; bring jewellery retailers and their offerings directly to the consumer through online store traffic and in real-time (feet-in-store) and ensure the consumers identify with the JCSA member code of conduct to buy jewellery with confidence. It further aims to promote the collective corporate identity of generic retail jewellery, as well as all individual brands, and rebuild and retain active, loyal consumers.
Please refer to the attached Brand Card with relevant information.
As a JCSA member, we have negotiated a 25% discount on the advertising rate of R8 000, bringing the cost down to an amazing R6 000.00, excluding VAT, (R1500 per issue) for 4 issues. You will receive a full-page ad in the following issues:
Summer (launch issue) November 2020
Autumn March 2021
Winter June 2021
Spring September 2021
A double-page spread will cost R14 000.00 less 25% for JCSA members, bringing the cost down to R10 500.
Payment will be on signature of order, however, where requested, payment plans will be afforded by to JCSA members for four, six, or 12-month periods.
If you would like to participate, kindly respond by completing the attached Booking Form and sending it back by return mail.

The Jewellery Council of South Africa (JCSA) has written a letter to Co-operative Governance & Traditional Affairs Minister Dr Nkosazana Dlamini Zuma requesting her to consider lifting all restrictions on the industry, with immediate effect. The council says the unrecoverable loss and possible collapse of the industry under an extended lockdown will not only affect those who are employed in it, but also prospective jewellers.

Power FM speaks to Chairman, Chris van Rensburg. Click for Interview: https://omny.fm/shows/power-breakfast/jewellery-council-calls-on-government-to-lift-all

The Jewellery Council of South Africa (JCSA) is appealing to the government to consider lifting all restrictions on the industry, or at least allow e-commerce sales.

In the letter to co-operative governance & traditional affairs minister Dr Nkosazana Dlamini Zuma, the council said the unrecoverable loss and possible collapse of the industry under an extended lockdown will not only affect those who are employed in it, but also prospective jewellers.

Employees are dependent on the business recovering soonest. With us finding ourselves in the watch and jewellery business, we are potentially more exposed to anticipated declines in economic activity and we will require a longer runway than other, higher demand fast-moving consumer goods to give our business an opportunity for survival and sustainability, reads the letter.

Signed by Lorna Lloyd, CEO of JCSA, the letter requested that the ban be lifted with immediate effect”.

Failure to do so will cause irreparable harm to this industry, from which it will not recover. Reasonable sanitation requirements shall be adhered to at all times.

Under level 4 lockdown, jewellery manufacturers are permitted to operate at 30% capacity.

In terms of social distancing in the workplace, it should be noted that the layout within a manufacturing environment and the size of a jeweller workbench naturally cater for the required social distancing,  Lloyd said.

She argued that many employees are industry specialists with few other employment opportunities”.

“The financial effect of these employees not being able to work from home is affecting approximately 8,000 people employed in the greater jewellery industry, Lloyd said.

The JCSA represents 243 manufacturer members, 200 retailers, 145 wholesalers and 22 service members, it said.

In line with our strategy of empowering our youth and creating opportunities for unskilled and less skilled persons to grow and develop, 85% of our workforce consists of individuals under the age of 50, of whom 32% are under 30.

These individuals and their families will be hardest hit by prolonged layoffs and restructuring, with many at the stage of life that poses significant financial commitments and demands, the letter said.

The JCSA said as e-commerce is permitted for manufacturing under level 4, it is imperative that wholesalers and retailers are able to partake on this platform. This will create much-needed revenue without compromising the risk-adjustment strategy.

The organisation is appealing for the government to “move the retail and wholesale value chain into line with manufacturing”.

The Jewellery Council of South Africa (JCSA) is appealing to the government to consider lifting all restrictions on the industry, or at least allow e-commerce sales.

In the letter to co-operative governance & traditional affairs minister Dr Nkosazana Dlamini Zuma, the council said the unrecoverable loss and possible collapse of the industry under an extended lockdown will not only affect those who are employed in it, but also prospective jewellers.

“Employees are dependent on the business recovering soonest. With us finding ourselves in the watch and jewellery business, we are potentially more exposed to anticipated declines in economic activity and we will require a longer runway than other, higher demand fast-moving consumer goods to give our business an opportunity for survival and sustainability, reads the letter.

Signed by Lorna Lloyd, CEO of JCSA, the letter requested that the ban be lifted with immediate effect.

Failure to do so will cause irreparable harm to this industry, from which it will not recover. Reasonable sanitation requirements shall be adhered to at all times.

Under level 4 lockdown, jewellery manufacturers are permitted to operate at 30% capacity.

In terms of social distancing in the workplace, it should be noted that the layout within a manufacturing environment and the size of a jewellery workbench naturally cater for the required social distancing, Lloyd said.

She argued that many employees are industry specialists “with few other employment opportunities.

The financial effect of these employees not being able to work from home is affecting approximately 8,000 people employed in the greater jewellery industry, Lloyd said.

The JCSA represents 243 manufacturer members, 200 retailers, 145 wholesalers and 22 service members, it said.

In line with our strategy of empowering our youth and creating opportunities for unskilled and less skilled persons to grow and develop, 85% of our workforce consists of individuals under the age of 50, of whom 32% are under 30.

These individuals and their families will be hardest hit by prolonged layoffs and restructuring, with many at the stage of life that poses significant financial commitments and demands, the letter said.

The JCSA said as e-commerce is permitted for manufacturing under level 4, it is imperative that wholesalers and retailers are able to partake on this platform. This will create much-needed revenue without compromising the risk-adjustment strategy.

The organisation is appealing for the government to “move the retail and wholesale value chain into line with manufacturing.

The Jewellery Council of South Africa (JCSA) is appealing to the government to consider lifting all restrictions on the industry, or at least allow e-commerce sales.

In the letter to co-operative governance & traditional affairs minister Dr Nkosazana Dlamini Zuma, the council said the unrecoverable loss and possible collapse of the industry under an extended lockdown will not only affect those who are employed in it, but also prospective jewellers.

“Employees are dependent on the business recovering soonest. With us finding ourselves in the watch and jewellery business, we are potentially more exposed to anticipated declines in economic activity and we will require a longer runway than other, higher demand fast-moving consumer goods to give our business an opportunity for survival and sustainability,” reads the letter.

Signed by Lorna Lloyd, CEO of JCSA, the letter requested that the ban be lifted with immediate effect”.

Failure to do so will cause irreparable harm to this industry, from which it will not recover. Reasonable sanitation requirements shall be adhered to at all times.

Under level 4 lockdown, jewellery manufacturers are permitted to operate at 30% capacity.

“In terms of social distancing in the workplace, it should be noted that the layout within a manufacturing environment and the size of a jeweller’s workbench naturally cater for the required social distancing,” Lloyd said.

She argued that many employees are industry specialists “with few other employment opportunities”.

“The financial effect of these employees not being able to work from home is affecting approximately 8,000 people employed in the greater jewellery industry,” Lloyd said.

The JCSA represents 243 manufacturer members, 200 retailers, 145 wholesalers and 22 service members, it said.

“In line with our strategy of empowering our youth and creating opportunities for unskilled and less skilled persons to grow and develop, 85% of our workforce consists of individuals under the age of 50, of whom 32% are under 30.

“These individuals and their families will be hardest hit by prolonged layoffs and restructuring, with many at the stage of life that poses significant financial commitments and demands,” the letter said.

The JCSA said as e-commerce is permitted for manufacturing under level 4, “it is imperative that wholesalers and retailers are able to partake on this platform. This will create much-needed revenue without compromising the risk-adjustment strategy”.

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The Jewellery Council of South Africa (JCSA) is appealing to the government to consider lifting all restrictions on the industry, or at least allow e-commerce sales.

In the letter to co-operative governance & traditional affairs minister Dr Nkosazana Dlamini Zuma, the council said the unrecoverable loss and possible collapse of the industry under an extended lockdown will not only affect those who are employed in it, but also prospective jewellers.

“Employees are dependent on the business recovering soonest. With us finding ourselves in the watch and jewellery business, we are potentially more exposed to anticipated declines in economic activity and we will require a longer runway than other, higher demand fast-moving consumer goods to give our business an opportunity for survival and sustainability,” reads the letter.

Signed by Lorna Lloyd, CEO of JCSA, the letter requested that the ban be lifted “with immediate effect”.

Failure to do so will cause irreparable harm to this industry, from which it will not recover. Reasonable sanitation requirements shall be adhered to at all times.

Version:1.0 StartHTML:000000301 EndHTML:000026687 StartFragment:000026346 EndFragment:000026613 StartSelection:000026421 EndSelection:000026602 SourceURL:https://www.sowetanlive.co.za/news/south-africa/2020-05-18-jewellery-council-calls-on-government-to-lift-all-restrictions-on-the-industry/ Jewellery Council calls on government to lift all restrictions on the industry

Jewellery Council calls on government to lift all restrictions on the industry

Version:1.0 StartHTML:000000301 EndHTML:000027772 StartFragment:000026523 EndFragment:000027674 StartSelection:000026523 EndSelection:000027670 SourceURL:https://www.sowetanlive.co.za/news/south-africa/2020-05-18-jewellery-council-calls-on-government-to-lift-all-restrictions-on-the-industry/ Jewellery Council calls on government to lift all restrictions on the industry

The Jewellery Council of South Africa (JCSA) is appealing to the government to consider lifting all restrictions on the industry, or at least allow e-commerce sales.

In the letter to co-operative governance & traditional affairs minister Dr Nkosazana Dlamini Zuma, the council said the unrecoverable loss and possible collapse of the industry under an extended lockdown will not only affect those who are employed in it, but also prospective jewellers.

“Employees are dependent on the business recovering soonest. With us finding ourselves in the watch and jewellery business, we are potentially more exposed to anticipated declines in economic activity and we will require a longer runway than other, higher demand fast-moving consumer goods to give our business an opportunity for survival and sustainability,” reads the letter.

Signed by Lorna Lloyd, CEO of JCSA, the letter requested that the ban be lifted “with immediate effect”.

Failure to do so will cause irreparable harm to this industry, from which it will not recover. Reasonable sanitation requirements shall be adhered to at all times.

HKTDC Hong Kong International Diamond, Gem & Pearl Show
2-6 March 2020
AsiaWorld-Expo
hkdgp.hktdc.com
Pre-register for your FREE e-badge and save HK$100 admission fee

HKTDC Hong Kong International Jewellery Show
4-8 March 2020
Hong Kong Convention and Exhibition Centre
hkjewelleryshow.hktdc.com
Pre-register for your FREE e-badge and save HK$100 admission fee

The 7th edition of the HKTDC Hong Kong International Diamond, Gem & Pearl Show dedicated to raw jewellery materials will be held from 2-6 March 2020 at AsiaWorld-Expo, while the 37th edition of the HKTDC Hong Kong International Jewellery Show featuring finished fine jewellery will run from 4-8 March 2020 at the Hong Kong Convention and Exhibition Centre. The twin shows are set to welcome a total of over 4,600 exhibitors, forming the world’s largest jewellery marketplace. With a wide range of jewellery products from the globe, the shows attracted over 90,000 buyers from 141 countries and regions in 2019.
The Jewellery Show comprises several themed zones including top-tier jewellery collections at the Hall of Extraordinary, internationally renowned jewellery brands at the Hall of Fame, and innovative designer brands at Designer Galleria. Other enthralling theme zones include Antique & Vintage Jewellery Galleria discovering treasures from bygone eras; World of Glamour showcasing the haute craftsmanship of Hong Kong jewellers; the Hall of Time dedicated to luxury watches and timepieces; IT Solutions for Jewellery zone showing the latest technology and solutions for the jewellery industry.
The Diamond, Gem and Pearl Show specialises in jewellery raw materials including loose diamonds, gemstones and pearls. Three special zones include the Hall of Fine Diamonds, which gathers the world’s top diamond suppliers; Treasures of Nature, a zone that is dedicated to finest coloured gems; and Treasures of Ocean, which displays quality pearls.
The shows deliver an all-rounded programme of jewellery parades, seminars, buyer forums and networking events that bring trending market intelligence to industry players. In addition, the Hong Kong Jewellery Design Competition will be organised to honour local designs of superior craftsmanship and creativity from the Student Group and the Open Group. Designs of the winners and finalists will be on display during the show period.

KYC: Bridge Over Troubled Water
WFDB President’s Blog – by Ernie Blom

The diamond and jewellery industry is an industry spanning all continents. It covers a vast array of activities, from mining of minerals, their processing, conversion into jewellery, and finally retail activities, which lead to its sale to the end consumers. It also covers trading activities at all of these stages.
Precious materials change ownership multiple times before they reach their final form and are sold to the end consumer. They may even change hands multiple times at the same stage as they go through stages of aggregation and dis-aggregation.

The modern industry is characterized by a large number of participants at each stage of the pipeline. While there are large companies with billions of dollars in turnover, at the other end of the spectrum there are numerous small companies, many of whom could be one-person operations. At the World Federation of Diamond Bourses (WFDB), the interests of the SME’s are at the core of our business.
However, the combination of high values and the large spread of companies bring with it a host of challenges. Less than 20 years ago, a diamantaire could easily have bought diamonds from a supplier in one location, have them shipped to another location and perhaps a company that was distinct from his own firm, which was doing the ordering and paying.

There were many variations to this. For example, if the buyer was purchasing rough from unorganized suppliers or from countries with limited and untrustworthy banking systems, he might ask to pick up the diamonds through another company in a free zone area and settle the outstanding bill via a bank transfer — or even in kind — to a different company in another part of the world as instructed by the supplier.
Banks and shipping agents merely followed instructions, and no eyebrows were raised as this was considered to be a trade practice. Everybody understood that all the diamantaire was doing was optimizing his own process pipeline with financial and security safety built in.

Not today. A process trail like that will be viewed as a money-laundering process. Banks and financial institutions would not agree to facilitate it. Diamantaires and companies bought diamonds in Africa until about 15 years ago in a highly informal and often challenging manner. In countries where De Beers did not have a presence, diamonds mined in the artisanal and alluvial sector were difficult to regulate. Indeed, the internal trading chain in
artisanally-mined diamonds was largely conducted informally, without paperwork or record keeping, thus making it largely untraceable.
In most cases, the buyer would not demand identification from those from whom they bought goods and few – whether licensed or not – kept records.
The world of business has changed tremendously. Like it or not, compliance of a clear audit trail of one’s buying/selling processes is now an integral part of a diamantaire’s business. You could say compliance is the “Fifth C” of the business.
It is for these reasons that the WFDB has adopted the KYC principle.
Know your customer, alternatively known as know your client or simply KYC, is the process of a business verifying the identity of its clients and assessing their suitability, along with the potential risks of illegal intentions towards the business relationship. Know your customer processes are also employed by companies of all sizes for the purpose of ensuring their proposed customers, agents, consultants, or distributors are anti-bribery compliant or not involved in money-laundering. Banks, insurers, export creditors and other financial institutions are increasingly demanding that customers provide detailed due diligence information.

The fragmented nature of the industry means that there is a dearth of information available about the gems and jewellery companies. Recent frauds, perpetrated by a few rotten apples, have also made banks and financial institutions mistrust the industry, and they have been demanding more transparency within the industry.

As part of its compliance with AML, each stakeholder in the industry will be required to do and maintain a proper CDD (this is typically also known as Know Your Customer (KYC) or Know Your Supplier, or Know Your Counterparty) for each of its customers and suppliers with adequate supporting documents and regular updates to the information.
On average, 80% of information in any KYC is common. If 10 companies are selling to the same customer and they each maintain their own separate individual KYC for that customer, then their customer will have to fill 10 KYC Forms, most of which will repeat information, around 80-90, and unique information will be 10-20%.

The diamond trade is traditionally a B2B segment with the bulk of transactions between a given set of customers. It is estimated that a diamond changes hands 7-8 times before it is finally sold to the consumer. For the WFDB, this makes the need for a common platform even more pressing, so as to bring about more transparency in the industry. To be credible, the KYC platform should meet certain essential conditions.

The platform should in the first place improve the compliance level in the industry, by setting the best standard (e.g. including asking for ultimate beneficiaries), while also reducing the overall cost of compliance for the industry. It should enable industry self-regulation by increasing the cost of non-compliance and giving more authority to industry bodies.
From an industry participant perspective, an appropriate KYC platform would provide increased efficiency, while at the same time achieving the best KYC standards such as: single point information entry and time saving as information can be shared instantly. Furthermore, the availability of counter party information will increase transparency by allowing banks to access more information regarding their customers, enabling better access to finance.

Also, working with authorised bourses/industry bodies will ensure that bourses are able to self-govern the trade. The system should require that only entities that are members of the WFDB would be accepted and that their particular KYC information related documents be verified by their respective bourses. So the bourses can verify the information of their respective members, giving added confidence to other members regarding its authenticity. It will further reduce efforts required, as all information is verified at one point only, and does not need to be repeatedly verified. Last but not least, members have agreed to the code of ethics of the bourse, thereby allowing them to resolve disputes.

The establishment of a WFDB KYC platform is an essential tool in restoring credibility and trust in the diamond industry. It may seem an annoying burden coming at a difficult time with credit squeezed, profit non-existent and rough and polished prices in a downward spiral. It is however a bridge the industry needs to cross without any further delay.

The Future Place of Synthetic Diamonds in the Diamond Market
By: Ernie Blom, President, World Federation of Diamond Bourses
Reflecting back over the last 12 months, it must be clear to everyone active in the diamond trade that no subject has gained more attention than that of synthetic, or lab-grown, diamonds, in the future market and how consumers can differentiate this product from the real thing.
In June 2018, De Beers introduced its Lightbox jewelry range set with lab-grown stones, which was perceived by many in the industry as a game-changer.
Whilst synthetic diamonds are a small fraction of the market at the moment, industry experts such as Paul Zimnisky have forecast that the lab-grown jewelry market will grow by 22% annually. This growth, it is believed, will be driven by continued advancement in technology which should improve production economics and thus further push down prices. What is more impressive is that some experts claim that lab-grown diamond sales, as a percentage of all diamond sales, increased eight-fold over the past 18 months.
The World Federation of Diamond Bourses, at a strategic meeting of the Executive Committee in Ramat Gan, carried out an in-depth brain-storming session on how the midstream should address this issue. Is the presence of synthetic diamonds an existential threat as some people claim? Or will it just be a side-product where both products, naturals and lab-growns, will live peacefully together and will not interfere in each other’s market? The latter is the argument put forward by De Beers, which is now offering both products to consumers.
There are several observations to be made in this regard
There are many reasons why prices of rough goods below $250 have shown a substantial decline since June 2018. Goods costing around, or slightly above, $100 per carat have been seriously hit with price decreases of more than 15%.
The Lightbox brand was exclusively launched for fun fashion and not for engagement rings, which are the core of the diamond business, and that brings us back to our first question: how will consumers react to being offered diamonds on the one hand, and the lab-grown alternative on the other? At the end of the day, I believe that money matters.
“What distinguishes diamonds from lab-created diamonds, apart from the whole love element, is that diamonds are a non-renewable resource. The supply of diamonds is limited by nature. Importantly, more expensive diamonds have historically maintained their resale value after purchase which is tied to the inherent rarity of higher-quality diamonds.
Martin Rapaport, in an in-depth analysis of the matter, came to the conclusion that retailers are currently gaining a substantial added value in selling lab-grown diamonds compared to naturals — this obviously relates to the issue of size. People being offered a diamond twice the size for the same price could be tempted to go for the synthetic alternative. This is also confirmed by a survey done by the IGDA among nearly 2,000 jewelry purchases conducted by the research firm MVI. Do you want it real or do you want it big? Size indeed matters.
Being confronted with this existential question, the diamond trade should unite around a campaign to stress as much as possible the rarity of diamonds and the best way to express the rarity argument is related to the issue of the resale price. As production of lab-grown diamonds is abundant, the price can never be sustained. This means that buying a lab-grown diamond will never give you back the same amount when you later try to resell it or when your children try to do the same.
Synthetic diamonds will not hold value. Natural diamonds will
If the diamond industry can relay this message as massively as possible to consumers, there is no doubt in my mind that they will think twice before purchasing a lab-grown diamond as an adornment. For important moments in life, they will go for the natural product. It is incumbent upon us, as representatives of the midstream of the diamond trade, to take up this matter and communicate it to retailers and consumers at large.
The World Federation of Diamond Bourses has a mission to contribute as much as possible to this extremely important matter. And, at the Presidents Meeting of the WFDB and International Diamond Manufacturers Association in Dubai next month, we will be taking an in-depth look at the subject of synthetic diamonds with a panel discussion dedicated to the issue featuring industry experts.
In the coming months, diamond bourses around the world will bring about initiatives to share this message on a broad scale.
This is not a time for complacency, and all should work together to get a unified message spread as widely as possible

The Future Place of Synthetic Diamonds in the Diamond Market
By: Ernie Blom, President, World Federation of Diamond Bourses
Reflecting back over the last 12 months, it must be clear to everyone active in the diamond trade that no subject has gained more attention than that of synthetic, or lab-grown, diamonds, in the future market and how consumers can differentiate this product from the real thing.
In June 2018, De Beers introduced its Lightbox jewelry range set with lab-grown stones, which was perceived by many in the industry as a game-changer.
Whilst synthetic diamonds are a small fraction of the market at the moment, industry experts such as Paul Zimnisky have forecast that the lab-grown jewelry market will grow by 22% annually. This growth, it is believed, will be driven by continued advancement in technology which should improve production economics and thus further push down prices. What is more impressive is that some experts claim that lab-grown diamond sales, as a percentage of all diamond sales, increased eight-fold over the past 18 months.
The World Federation of Diamond Bourses, at a strategic meeting of the Executive Committee in Ramat Gan, carried out an in-depth brain-storming session on how the midstream should address this issue. Is the presence of synthetic diamonds an existential threat as some people claim? Or will it just be a side-product where both products, naturals and lab-growns, will live peacefully together and will not interfere in each other’s market? The latter is the argument put forward by De Beers, which is now offering both products to consumers.
There are several observations to be made in this regard
There are many reasons why prices of rough goods below $250 have shown a substantial decline since June 2018. Goods costing around, or slightly above, $100 per carat have been seriously hit with price decreases of more than 15%.
The Lightbox brand was exclusively launched for fun fashion and not for engagement rings, which are the core of the diamond business, and that brings us back to our first question: how will consumers react to being offered diamonds on the one hand, and the lab-grown alternative on the other? At the end of the day, I believe that money matters.
“What distinguishes diamonds from lab-created diamonds, apart from the whole love element, is that diamonds are a non-renewable resource. The supply of diamonds is limited by nature. Importantly, more expensive diamonds have historically maintained their resale value after purchase which is tied to the inherent rarity of higher-quality diamonds.
Martin Rapaport, in an in-depth analysis of the matter, came to the conclusion that retailers are currently gaining a substantial added value in selling lab-grown diamonds compared to naturals — this obviously relates to the issue of size. People being offered a diamond twice the size for the same price could be tempted to go for the synthetic alternative. This is also confirmed by a survey done by the IGDA among nearly 2,000 jewelry purchases conducted by the research firm MVI. Do you want it real or do you want it big? Size indeed matters.
Being confronted with this existential question, the diamond trade should unite around a campaign to stress as much as possible the rarity of diamonds and the best way to express the rarity argument is related to the issue of the resale price. As production of lab-grown diamonds is abundant, the price can never be sustained. This means that buying a lab-grown diamond will never give you back the same amount when you later try to resell it or when your children try to do the same.
Synthetic diamonds will not hold value. Natural diamonds will
If the diamond industry can relay this message as massively as possible to consumers, there is no doubt in my mind that they will think twice before purchasing a lab-grown diamond as an adornment. For important moments in life, they will go for the natural product. It is incumbent upon us, as representatives of the midstream of the diamond trade, to take up this matter and communicate it to retailers and consumers at large.
The World Federation of Diamond Bourses has a mission to contribute as much as possible to this extremely important matter. And, at the Presidents Meeting of the WFDB and International Diamond Manufacturers Association in Dubai next month, we will be taking an in-depth look at the subject of synthetic diamonds with a panel discussion dedicated to the issue featuring industry experts.
In the coming months, diamond bourses around the world will bring about initiatives to share this message on a broad scale.
This is not a time for complacency, and all should work together to get a unified message spread as widely as possible.