Diamonds are the world’s most fascinating things mankind ever came across. Diamonds are not only limited to rings. From a car to a man’s accessories, from a women’s ring to their sandals, today diamonds are imprinted everywhere.
If you want to raise the cost of your product, or if you want to give it a luxurious feel, all you have to do is, lodge some shimmering diamonds and people will definitely stop and stare for a while (if not purchase it).
Earliest diamonds were found in 4th century BC although the youngest of these deposits were formed 900 million years ago. This is one such industry that has been lingering around mankind for ages.
One such manufacturer of diamonds are present around us since 1888. With more than 132 years of presence, the brand story of this diamond company comes with a lot of thrills, excitement, ups, and downs.
Let’s go through the brand story of De Beers and find out why the company has been constantly shimmering for 132 years. In fact, 132 years is definitely a long time for any company’s life.
Brand Story of De Beers – How It All Started?
Name De Beers was derived from the 2 Dutch brothers – Diederik Arnoldus De Beers (1825 – 1878) and Johannes Nicolaas De Beers (1830 – 1883) who owned a South African farm named Vooruitzicht near Zandfontein of Orange Free State.
Co-incidentally, the duo was amazed to find diamonds in their farm which attracted the government towards their farm due to the increasing demand for diamonds at that time.
Up until the mid-1800s diamonds were a rarity and could be seen only around the posh people. The craze for diamonds began in South Africa in the second half of the 19th century.
Cecil Rhodes, the founder of British South Africa Company, broke into the diamond business in South Africa by renting water pumps to miners before buying diamond fields of his own. When an 83.5-carat diamond – Star of South Africa was found in Hopetown, Cecil invested profits of this operation into purchasing claims of small mining operators.
Soon, Cecil successfully got funded from Rothschild family who would later inject more finance during expansion years.
Diamond mines of De Beers were formed in 1888 by the merging Barney Barnato and Cecil Rhodes and by that time the company was the sole owner of diamond mining operations in the country.
Having felt that he (Rhodes) ventured into an untapped market bought up diamond fields including one owned by the 2 brothers – De Beers.
Having said that Cecil was the sole owner of diamond mining operations, to control demand, supply and prices he created distribution arms through The Diamond Syndicate which included The Diamond Trading Company in London and The Syndicate in Israel.
4C Test – Introduced by De Beers is Now an Industry Norm
After establishing the base, one needs to come up with something that can be a benchmark. Luckily, what De Beers came up with is now being used in the entire industry. The 4C norm. For more than 125 years industrialists have been using this norm to test how shimmering and valuable a diamond is.
Fire, Life, and Brilliance – The 3 most essential elements for all visual excitement in a diamond. Fire is the rainbow of light you see when a diamond is symmetrically cut into two halves. Life means the sparkle of a diamond and Brilliance is how transparent a diamond is which leads to brightness.
De Beers Iris is the technology created by the company so that its customers and everyone associated can see how beautiful the diamond is with their own eyes. Coming up with a certificate is another thing and making users feel the generosity of a diamond gives a whole new feeling.
De Beers Era in the 1900s:
A successful CEO is not someone who fills his own pockets and who is merely counted as one of the richest men on earth. A successful CEO is someone who goes the extra mile to make his company know globally, and stay in the business for eternal time.
By the time Cecil Rhodes dies in 1902, De Beers controlled around 90% of the world’s rough-diamond production and distribution. But it was that time when other deep-pocketed giants realized the potential of a diamond business and tried to compete with De Beers.
Oppenheimer, a rival diamond producer with his own production company – Anglo American Company essentially found his way to be on the board of directors. By 1927 he became chairman of the board.
In 2011, Anglo American took control of the company after buying Oppenheimer’s family stake of 40% for $5.1 billion.
Under Oppenheimer’s tenure, De Beers sign contracts with buyer sand suppliers, making it impossible to deal with diamonds outside De Beers. Nobody thought that De Beers would soon turn out to be a monopoly in the world of the diamond business.
The structure of De Beer’s business remained more or less the same during the 20th century. De Beers would determine the number of diamonds they wanted to sell, and at what price for the whole year.
Diamond producers would then get their cuts based on their total output and buyers would take their diamonds to be resold in various markets.
What About the Time When Diamond Prices Went Dirt Cheap?
If history fascinates you, I’m sure you are aware of the 1930s era. This was the time when the prices of diamonds went dirt cheap. According to the internet cost of a diamond engagement ring during the 1930s was around $1824 (today the cost is not less than $5600).
While crisis management courses and lectures were rolled out in the late 2000s but companies have been doing that for ages. For De Beers, the era of 1930 was nothing more than a situation of crisis when the price of diamonds went dirt cheap no matter how pure and shimmering a piece was.
To tackle this situation, Henry Oppenheimer (son of Ernest Oppenheimer) traveled to New York in 1938 to meet with N.W Ayer – a renowned advertising agency.
The US was seen as the next big market for diamonds. To tap into the market and make a difference, a careful plan and strategy were drafted. The problem statement was very simple – To convince Americans that diamonds equated to love.
The careful drafting, brainstorming resulted in rolling out a marketing campaign “A diamond is forever.”
Through a round of advertisings, American men were convinced that the size of the diamond in an engagement ring showed how much they loved their fiancée. In new motion pictures, movie stars were shown wearing diamond rings.
However, the most effective piece of advertising popped up in 1947, with a powerful tagline “A diamond is forever.” It was so powerful and catchy that later it went to be the official motto of De Beer.
After dominating most of the US market by the 1960s, De Beers went on to expand in other markets and countries. Japan was a tough market to crack because marriages over there never had a tradition to exchange rings.
To know the power of advertising during the 90s era here is one amazing fact. After a series of ads and catchy punchlines, almost 60% of the Japanese brides wore diamonds up from 5% in 1967.
The monopoly of De Beers was threatened after diamonds were discovered in Siberia in 1950. But it had some other plans to tackle this issue.
Instead of competing directly with Russian diamonds, the company offered to buy almost everything that came out of Siberia – Funnelling all the world’s diamonds through a single channel.
De Beers in the 21st Century
De Beers had enough of a monopoly in the diamond industry. 21st century witnessed a number of players entering the market which deliberately forced a change in structure for the company.
A number of revolts against the diamond company occurred in places like Zaire and Israel over the years, which were later on suppressed by the company by releasing stockpiles of diamonds similar to that country’s product, driving down demand.
Countries like Russia, Canada, and Australia refused to cooperate with the single-channel system. Number of revolts, flash prices issues forced De Beers to switch up the company’s strategy.
Slowly it moved away from rough-diamond supplying and controlling the entire industry and focused on promoting its own brand and establish a brand identity.
In the 2000s business model of De Beers went through a change. Its market share of rough diamonds fell from 90% (in the 1980s) to 33% by 2013.
The company then started advertising diamonds to manipulate consumer demand. One of the most effective strategies has been the marketing of diamonds which portrays love, affection, and commitment.
Another successful campaign is its eternity ring, trilogy ring, and the right-hand ring. Eternity ring represents love and affection, the trilogy ring represents past, present, and future of a relationship and the right-hand ring is worn by women as symbol independence.
Diamond rings are almost the same, differentiated by design and the type of diamond used. But De Beers formulated a story for every ring which captures one or the other feelings of its customers.
This was the most innovative and catchy approach adopted by the diamond company. Then De Beers also ran television advertisements featuring people wearing diamond rings along with background music of Palladio. The title of the campaign was Shadows and Lights which was first telecasted during the spring of 1993.
De Beers & The Modern World:
In 2002, De Beers launched its first store at 50 Old Bond Street, London. Even today the store is running in excellent condition. And since then, the diamond company expanded to over 30 countries worldwide.
2003 was the year of expansion. De Beers went to Tokyo – Japan. In 2008, De Beers added to Hong Kong in its international expansion portfolio.
The company launched a feminine Enchanted Lotus collection – inspired by the lotus flower. Then followed by The Adonis Rose collection. Adonis Rose takes its name from the love story of Aphrodite and her Adonis.
In 2014, De Beers Caress – a new diamond engagement ring – is launched in March which is inspired by the true harmony of love. De Beers’ advertising campaign for its new ring De Beers Aria was extremely powerful and catchy.
Some facts about De Beers:
- The vault of De Beers at 2 Charterhouse street was 4 stories deep.
- This vault was said to have 90% of the world’s diamonds.
- According to an article from Fortune in 2001 – It is said that there are hidden cameras among the bricks that cover every inch of space, powerful enough to capture the color of a person’s eyes.
- iPhone5 or the new iPad, its glass has been cut with one of De Beers synthetic diamonds.
- De Beers operates in more than 20 countries across 6 continents with more than 13000 employees. Its mines are said to be across Botswana, Namibia, South Africa, and Canada.
132 years of existence, once a monopoly turned into a conglomerate with global exposure and along with its advertising campaigns is what sums up De Beers.
There is much more than what is said, De Beers carry a legacy of more than 130 years and its nearly impossible for any diamond company to come anywhere near it.
I am astounded by its growth, business, and its mindset. A once dominating company is now said to be the industry leader. We hope that the company goes on forever and our future generations also get to experience the magic of this diamond company