ANGLO American’s 85%-owned De Beers may have pulled off a strategic coup by unveiling plans to launch a new brand of synthetic diamonds. These are the stones that are ‘grown’ artificially in a laboratory and against which the diamond giant has previously fought a marketing campaign.
In fact, the group spent some $140m in 2017 alone promoting naturally occurring diamonds which it says truly represent the profound emotions that inspire wedding bands and other anniversary gifts. Now, however, De Beers has performed an about-turn by unveiling its Lightbox range of synthetics. What could it portend?
According to analysts, this is not really the acknowledgement of diamond synthetics that it appears (although De Beers has its own line of synthetic diamonds which are used primarily for industrial purposes). Instead, it’s a clever commercial ploy aimed at better controlling the pricing and proliferation of lab-grown diamonds by other producers.
By establishing a much lower price point for synthetic diamonds – the Lightbox range will retail at an 82% discount to existing synthetic diamonds – the company is aiming to force down prices in the existing synthetic market and drive open an even greater discount to naturally occurring diamonds.
“By strengthening the appeal of natural stones to the consumer, while simultaneously flooding the synthetics market, De Beers will effectively address two of its most crucial strategic challenges with one stone,” said a bank in a recent report. (The bank is not identified because it is not permitted to speak to the media.)
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