As Beijing experiences its first major snowfall of 2023, a new advertisement proclaiming "A Diamond is Forever" is playing on outdoor billboards along Wangfujing Street. This iconic slogan, familiar to consumers who grew up in the 1980s and 1990s, was introduced to Chinese audiences decades ago, establishing natural diamonds as a symbol of eternal love.
De Beers, the American natural diamond mining and retail giant, created this classic slogan in 1948 (though some reports suggest 1938 or 1951). Over seventy years later, De Beers is investing heavily to promote this message again to Chinese consumers.
On December 14, De Beers hosted an event in Beijing, announcing a campaign to promote natural diamonds across Greater China starting from late 2023. David Prager, De Beers Group's Chief Brand Officer, revealed that the campaign would include offline events, advertising, and industry collaborations.
One notable collaboration is between De Beers Group's diamond research institute and the National Jewelry and Jade Testing Group ("Jewelry National Inspection") to launch a series of educational programs on natural diamonds in Greater China. Additionally, De Beers is currently hosting an art exhibition in Hong Kong inspired by natural diamonds.
Unlike historical reliance on TV advertising, De Beers' new campaign will be deployed on social media and short video platforms familiar to younger consumers, including collaborations with influencers and artists to generate trending topics about natural diamonds.
In September 2023, De Beers announced a $20 million investment (approximately 145.7 million yuan) for marketing in the U.S. and China to re-promote "A Diamond is Forever." The plan aims to resonate with the ideologies and consumption views of the new generation of consumers, focusing on educating the public about natural diamonds, their value, and the industry's sustainability.
This push comes amid expanding lab-grown diamond production and a year-long decline in global natural diamond prices, leading to a sluggish retail market for diamond-set jewelry in mainland China. The U.S. diamond retail market has also experienced a tough year, affecting upstream purchases. As of November 2023, De Beers' rough diamond sales have declined for six consecutive months.
This significant investment in promoting natural diamonds can be seen as an industry "self-rescue" effort. The industry needs to reaffirm the value of natural diamonds to boost consumer confidence, as consumers are becoming more rational and questioning the value of natural diamonds compared to lab-grown diamonds, which offer better value and quality at the same price.
Similar to the 1940s when "A Diamond is Forever" was created during an industry crisis, De Beers is again seeking to improve the image of natural diamonds. Engagement rings weren't typically diamond-studded then, but after the slogan's creation, diamond engagement ring sales in the U.S. soared from 10% in the 1940s to 80% by 1990.
De Beers' allies are also united in this industry effort. Executives from eight major gold and diamond jewelry retailers, including Chow Tai Fook, Chow Sang Sang, Luk Fook Jewellery, Chow Tai Seng, Diamond Family, Kimberley Diamonds, Darring Ring, and Ganlu Group, showed support at the recent Beijing event.
As downstream retailers and upstream miners "band together," natural diamond prices can stabilize. In fact, Chow Tai Fook Jewellery, a leading domestic jewelry retailer, has been intensively promoting natural diamonds since the second half of 2023, including hosting its first natural diamond exhibition in Beijing a week ago.
In mid-August 2023, De Beers further relaxed its purchasing policy for sight holders, allowing them to postpone up to half of their rough purchases to 2024. According to industry media Rapaport, citing an anonymous natural diamond miner's letter to clients, sight holders can "opt out of purchasing rough diamonds larger than 2 carats" during the remaining sales cycles of September, October, and December 2023.
As of early November 2023, De Beers announced it would continue to reduce rough diamond supply. CEO Al Cook stated, "De Beers is providing full flexibility in purchasing policy support to sight holders as we work to re-establish a balance of wholesale supply and demand for natural diamonds."
Industry analysts generally believe that De Beers' move to assume inventory risk and inject more confidence into the natural diamond market is a response to declining retail demand and increasing pressure on midstream natural diamond inventory.
