De Beers pushes for festive season rebound

Mbongeni Mguni | Tuesday October 29, 2024 10:49

From January 2025, the country of origin will be expanded to rough diamonds above one carat in size.

The announcement this week comes as De Beers and the natural diamond industry mount a festive season marketing campaign that is crucial to a long-awaited recovery in the sector, following a slump extending back to the third quarter of last year.

For De Beers and producers such as Botswana, the period between Thanksgiving in the United States (November) and the Chinese New Year (January) is traditionally the prime retail period for natural diamond jewellery, accounting for more sales in the year.

This year, the stakes for the key period are much higher, as De Beers and others need the festive season sales to clear the oversupply in natural diamond jewellery that has been plaguing the market. This would help recovery further up the pipeline, to the midstream of cutting and polishing firms, as well as the upstream of producers such as Debswana.

Debswana is restraining its production this year, the major factor behind the IMF’s forecast that the local economy will grow by just one percent this year. From an initial target of as much as 32 million carats at the beginning of the year, De Beers revised its maximum output this year to 29 million carats, then lowered it in July to 26 million carats. Debswana produces about two-thirds of De Beers’ annual output.

“For the first time in history, we have the technology to provide our customers with the provenance of their diamonds at scale,” De Beers CEO, Al Cook said this week. “We know that our clients care deeply about sustainability and want to understand the good their diamonds have done. “Our ambition is to offer them the story of every De Beers-sourced diamond, tracing its journey and positive impact from its origin to its crafting.”

Cook has a busy fourth quarter, with high-level presentations at the Dubai Diamond Conference and the Facets Conference in Belgium next month, where he will seek to underline natural diamonds’ value over synthetics. Cook is also expected to hammer home De Beers’ strategy for growth beyond the industry’s current challenges.

The diamond giant’s latest initiative comes a week after it launched a global natural diamond marketing campaign with Signet Jewellers, called 'Worth the Wait'. Signet is the world's largest retailer of diamond jewellery, and for Botswana, is responsible for the sale of half of the country’s diamonds in the retail market each year.

The campaign is aimed at re-introducing the unique attributes of natural diamonds to a new generation of US couples and came after months of intensive training for Signet’s 20,000 sales associates “to equip them with the deep knowledge to communicate the unique features of natural diamonds to their customers”.

At the end of August, De Beers also sealed a long-term deal with Tanishq, India's largest jewellery retail brand, for the targeting of more consumers in that market with campaigns around “the rarity and preciousness of natural diamonds”.

De Beers officials said India, a vibrant economy with a growing middle class, now represents 11% of global demand for natural diamond jewellery, overtaking China. The United States remains the prime market for natural diamonds, accounting for more than 50% of demand.