The diamond industry is going through “hard times”. The big diamond producers — especially the famous De Beers — are facing an unprecedented crisis in their sales and business due to important economic changes in the scenario in which they operate.
The reality of the moment appears to be a catastrophe for the 5 largest companies that alone dominate up to 85% of world revenues (among them the aforementioned giant and also other well-known ones, such as Alrosa, the Anglo-Australian Rio Tinto and Dominion Diamonds in the Canada) according to the report that you can check by clicking here.
Understand below a little more about this scenario and what you, as a consumer, need to know about the impact on prices and keep an eye on the current conditions that this trade is presenting to take advantage:
Why did the diamond industry go into crisis?
At this point, you might be wondering: how did it all start? After all, the diamond, unanimously known as jewel of high value, for many people, it did not even remotely appear to be the target of a market crisis. But with the Chinese economy slowing down (and it should be remembered: China is among the largest consumers of the jewel, along with the USA), there was a drastic decrease in the volume of diamond imports in this country and this directly affected the sales margins and profits of the big companies.
To complicate matters further, amidst this difficult scenario, India — which, unlike China, is undergoing constant economic ascension — announced the creation of a trading exchange in which it intends to provide direct purchase of diamonds directly from international sources, reducing the known monopoly.
With that, what is the impact on the entire chain around the world?
The result: a decrease in demand for the diamond industries and a drop in prices, which puts the market of huge producers on alert and in a state of emergency and, for more general purposes, could even completely extinguish the intermediary agents of this trade — cutters responsible for finishing diamonds. more than 80% of the diamond produced worldwide, in other words, a huge blow to an entire category and to the global economy.
And while the strength of the largest holders of market shares weakens, there is a latent need for these industry giants to cut back on profits a little to continue with sales — which despite efforts continue to fall.
In a radical attempt to react and survive the crisis, they end up causing a rebalancing of market prices and attracting the attention of consumers who previously could not buy the jewel because it was of high value or because it was the target of a controversy that also involved consumer confidence. buyers in relation to the practices of large producers.
What are the other consequences?
- Drop in demand and lower prices: with Indians trying to reach the top position in the diamond industry, the demand of previously stronger companies tends to fall more and more, forcing them to reformulate all price levels to be able to sell and remain competitive .
- Alteration of prices and market behavior: this, in the course of the journey of changes caused by the crisis, can also affect the price for the final consumer, since the commercial dispute — which gradually leaves the circle of greater power and begins to be valid for other emerging countries in the sector — and the popularity of the Indian market tend to open a little more the land of profits and trade previously so closed by holders of greater power and restriction of access to the precious stone in question.
And you, were you already aware of what is happening to the diamond industry? Is a gem of interest to you? How will you seize the moment to acquire it with confidence? E-commerce can help you!
If you have any questions, write to us in the comments section!
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