“It’s no wonder that truth is stranger than fiction. Fiction has to make sense”—Mark Twain
The diamond ring - every woman’s dream of a fairy tale marriage proposal is incomplete without the diamond ring around her finger & every man’s prime concern is to find his lady love, the ring worthy enough for the special day, usually after an expensive meal in a fancy restaurant and a declaration of romance; after all isn’t a diamond a sign or everlasting love, with a bigger size demonstrating a proportionate amount of love? But when did & how did this concept of gifting diamonds start? Was it from the beginning of time or is this a recent market directed strategy ?
The early diamonds were found exclusively in India (No doubt, the famous novel, The Jewel in the Crown – is based on India), somewhere around 8th century BC. From here they spread out of the country via the silk route. They were used as jewelleries, as part of cutting instruments and as a lucky charm, which were supposed to bring good luck. With passage of time and increase in merchant movement by sea, diamonds slowly found their way into Europe, and slowly began to catch the eye and fancy of it’s elite.
But by 18th century India’s supply started to gradually decline and other sources were sought out. Brazil in South America, started to emerge as the main source of supply. Economic status also improved in most European & American countries thanks to diverse reasons like Industrial revolution, imperialism, and increased business profits. In 1866 diamonds were discovered in South Africa and the diamond industry changed for ever. Quite a high density of areas yielding diamonds were found and an astounding amount of diamonds started to come out from these mines of south Africa. Value of lands in those area increased tremendously and a struggle started out between different countries in Europe, to take control over these lands. The result was the two Boer wars – Between British colonialist and descendants of Dutch settlers took place, causing heavy casualties on both sides. Finally the British won the war, but at great human cost. But the increased amount of diamonds coming from those mines ensured that the supply exceeded the demand, causing fall of the diamond prices all over the world. The elite population of Europe and Americas, began to consider diamonds a common stone and began to replace this with other gems like emeralds, rubies and sapphires.
With most mines closing down and the diamond industry facing severe crisis, the remaining mine owners decided that the only way, they could survive, in the changed environment was, that they should stop competing against each other and should join hands and form one mining group to handle things more effectively. The target was to get strict control over mining, production and sale of diamonds, by one corporation. The year was 1888, and this new corporation was De Beers Consolidated Mines ltd, headed by an Englishman Cecil John Rhodes. This company controlled almost every single south African mine and finally it’s market dominion spread over the whole world, so by 1902 it controlled almost 90% diamond business all over the world. This finally enabled the company to control the supply to the market, but the demands continued to fall, so much so that by 1919, price of diamonds fell almost by 50%.
Diamonds were discovered in Australia, Siberia and West Africa and so the availability increased further and sales kept on decreasing. This along with economic depression in United states along with instability following world war made things worse. This alarmed the people managing the diamond industry and they desperately tried finding means to increase their sales. A survey indicated that the United States was a potential area, where with the right approach and perfect execution, good dividends were possible. So the brilliant approach, to increase the sale of diamonds, in form increased sale of engagement rings emerged.
The concept of engagement ring was not new, in fact the idea of engagement ring goes back to ancient Roman period, when the bride to be, used to wear rings made of copper or hair in third ringer of left hand, as it was believed that a vein from third finger ran directly to the heart. But in ancient period these rings were also gifted to friends and did not always signify marriage proposal; but all that changed during the time of Pope Innocent III, around 1215, when rings were introduced as an integral part of all marriage ceremonies. Even then, costly jewelled rings were used only among the rich elite and were out of reach among normal people. Fast forward to the first half of 20th century. In western world and specially in country like United States, a study showed women were not very interested in buying diamond engagement rings. They believed in spending money in things, which were more practically beneficial – like a bigger house, or a car, or a washing machine, that can be used in a daily basis. But, the people controlling diamond business decided to change all that, by ensuring that the best way to improve sales, was to make it an integral part of all marriages by involving the ordinary class. This required careful study of people’s attitude and formulating a carefully planned advertising and selling strategy.
Services of a leading advertising agency was taken, and extensive and aggressive marketing campaign with catchy lines like “ A Diamond is Forever”, “Diamonds are a girls best friend” & “How else could 2 months salary last forever” were used in Newspaper, Magazines & even in movies, were launched. The aggressive propaganda were done simultaneously with other fine manoeuvres like lending diamond jewelleries, to actresses to wear during academy awards functions. The target of advertisement shifted on males from females – as men were responsible for 90% of engagement ring sales. The higher the price of diamonds, the higher was the love being demonstrated. It was an elaborate plan, planned meticulously and executed perfectly. Soon sales in the United states shot up tremendously. Similar plans were executed throughout the developed world and with the same results. Soon the best way (if not, the only way) for a man to show love to his beloved was by gifting a diamond ring. In today’s jewellery market, more than 78% engagement rings sold, contains diamonds
The moment a diamond ring is purchased and the customer walks out of the jeweller’s door, the value of that ring can drop by 50%(It is a Depreciating Asset). So the marketing strategist, by their extensive advertisement and other propaganda ensured that, the concept of buying used or second hand diamonds remains taboo. As far as the answer to the question (is concerned), as how can these diamond rings be effectively sold at such a high price, if they are not really so valuable- is to make it scarce. So an artificial restriction on supply has been created, to keep the prices high. So as far as buying diamonds, as an investment proposal is concerned, it is not a bright idea. As most jewellers would not buy a second hand diamond jewellery , and if they buy also, they would do so in most condition only if, the jewelleries was purchased from their store; not to mention that money a person would get would be considerably lower than it’s buying price.
Another problem, involving sale of diamonds, stems from the fact that the diamond industry is a victim of it’s own success. The incredible success story of diamond engagement ring (as well as other jewelleries ) have brought a lots of fraudulent characters into this business, who sell artificial diamonds. Sometimes it becomes difficult for even an expert to tell the difference between a natural one and an synthetic one, so when it comes to ordinary people, they become easy victims.
A lots of blood diamonds were also smuggled into market from war torn African countries; where forced labourers, including children were used, in horrible working conditions to mine them. Innumerable innocent people, still die due to greed of unscrupulous dealers wanting to make profit made from the diamonds mined from mines in area having civil war & the money changing hands, often serve the needs of ruthless warlords and militant groups. For this the diamond industry came under severe criticism; to counter which, the industry came up with Kimberley process certification scheme and World Diamond Council (WDC) system of warranties, under which it is ensured that the diamonds for sale only comes from countries and areas; where there are no evidence of forced child labour, or human abuses, or any move to overthrow democratically elected government. But this system is not fool proof. as the diamonds can be smuggled from a disputed area to an area, which is marked safe, and relabelled.
So if you are going to get married, and the question of buying a diamond engagement ring pop ups, what to do ? Well you can try convincing your better half, that use of diamond rings are not an ancient tradition, but a marketing gimmick, which goes back only a 100 years. If that does not work, you can try telling and convincing, your better half, that diamonds are not certainly the best investment; buying gold and silver are much better viable options, if it is the security measures/saving for a rainy day for your upcoming family, is what you are concerned about. Money can be invested in many other better ways. Finally love is not a commodity that can be purchased in the market with money, as diamond engagement rings may imply. If in spite of all the above arguments, if your better half still insists on getting a diamond ring; you should go for it and get the best ring available, as the diamond engagement ring may be of questionable value, but the smile on the face of your loved one is priceless.