De Beers undercuts the man made diamond price

[glitterata]

If you wanted a 1-carat engagement ring, you could buy this:
https://lightboxjewelry.com/products/halo-pendant_white_sterling-silver
You could remove the stone from its setting and put it in the setting of your choice. Nobody would be able to tell you'd done it, unless you told them--and you'd save $3-20K. I would be astonished if lots of people didn't do this.

Will this mean that engagement diamonds of 1ct and smaller will become tainted in people's minds? Will people stop giving diamonds as engagement rings altogether? Will other MMD manufacturers try to compete by selling bigger diamonds?

The photo shows a nicely cut diamond with an arrow pattern. Will the actual diamonds have that pattern?

I would seriously consider buying a pink or blue diamond and setting it in a nice antique setting. I hope they sell yellow ones too--though maybe they aren't doing it because they don't want to compete with natural yellows?

 

[blueMA]

My next purchase of a diamond piece was going to be a pendant piece... but that MMD pendant looks mighty tempting especially at the huge cost savings, and why not buy more of the "fashion" pieces that look indistinguishable? I think the demand just shifted a tiny bit.

 

[TreeScientist]

Love the post.

For the record, I know many wealthy people and would agree with your assessment that they many tend to dress down and "live small". That said, I've also seen correlation that those that EARNED their own wealth tend to live this way. In latter generations where wealth is passed down, you tend to see more show boating for status purposes.

Of course, how each of us sees and values things plays a vital role as well. For instance, regardless how wealthy I am, I will never be a buyer of designer sunglasses as I don't see the value. Nearly lost a $15 pair of cheapo's this weekend in my lake adventures because I chose to jump off a boat at high speed. Thankfully my cat like reflexes saved the day as I quickly snatched the glasses as they were on their descent to the bottom. My face would disagree as I look like a raccoon. The point being no matter how great a quality, the reality is I will lose them or utterly destroy them way before I get my money's worth so I will keep buying the knockoff's.

Where this really differs from the diamond market, at least IMO, is the brilliant advertising that has been forced down our throats saying that you simply don't love your girl unless you give her the real thing and the biggest real thing you can afford. Perhaps DeBeer's offering their clown jewelry in limited selection reinforces that primitive marketing campaign more than we realize.

Bingo. The other ladies in this thread mentioned it as well, but I think that DeBeers not offering any rings is deep-seeded in behavioral psychology: They're indicating to consumers that MMDs are not good enough for something as important and sentimental as an Engagement Ring. Sure, you can pull the diamond out of the pendant and have it re-set into a ring, but the message they're sending is loud and clear.

I really don't think the natural Engagement ring is going anywhere anytime soon, as indicated by this move and the underlying message by DeBeers. The cheap MMDs will suffer the same fate as all of the other low-cost replicas that have come on the market to challenge mined diamonds (CZ, moissanite, white sapphire, etc.): Cleaver marketing by DeBeers will tell women that they're not valued and/or their future husband doesn't love them/care about them enough if they don't get them a mined diamond.

"But, but, but it's the EXACT same as a mined diamond. IT IS A DIAMOND." I hear you all saying. Doesn't matter. Hell, 90% of women couldn't tell a CZ from a diamond anyway, but it still doesn't change the desire, instilled by marketing, for the exclusive mined diamond.

Yes, in this case, you could just tell your future wife that you bought her a mined diamond... But this would be lying.... And she would find out if she ever asked a jeweler... And lying is bad, so you shouldn't do it.

Sure, there will be women who want the alternative MMD. Same with women who want the low-cost alternatives available today. But many (OK, most) will still want a mined diamond, because DeBeers is a marketing genius, and they're jammed the "every woman deserves a mined diamond engagement ring" message into the heads of every girl and boy by the time they've reached their own engagements.

But as I said, I do see this blowing the market wide open for jewelry outside of Engagement rings. Most women don't have the same fantasy about a pair of earrings as they have for their engagement ring, so I think many will be open to pieces that contain MMDs. This is good for us guys, because we can surprise our wives with pretty MMD pieces that won't break the bank (seriously, I want that MMD Octavia pendant for my girlfriend ).

...So DeBeers may be sacrificing a bit of market share with this move, but I think they saw this as inevitable even if they didn't act now. This move to psychologically-devalue MMDs for those "important" pieces in a woman's life (aka the Engagement ring) is an effort to save the position of the mined diamond E-ring in society. And you'd better believe that they will let this go only with their last dying breath.

 

[Texas Leaguer]

I would not attribute the desire for natural mined diamonds entirely to marketing genius. There is a primitive desire amongst human beings (and even some other animals) to celebrate natural objects of beauty or special meaning. When you think about our ancestors and even present day indigenous peoples, there are plenty of examples of ritualistic self-decorating with feathers, shells, stones, and other natural objects that have psycho-social significance.

Mined diamonds are rare and beautiful natural objects. They will always be desired, particularly for marking symbolically important events in our lives.

And we need not look too far back in our past to see analogs of how the market responds to synthetic gemstones. Corundum was successfully synthesized over a century ago. You can buy a large and beautiful ruby or sapphire, with all the chemical and physical properties of the mined gems, for pennies per carat. Yet the market for natural is as strong as ever.

Debeers is helping the market recognize where this would eventually be going organically. MMD for fashion, minded diamonds for serious fine jewelry - bridal in particular. The two can and will ultimately coexist peacefully - two very different markets. In the interim they will force many entities to adapt to reality faster than they would prefer to.

 

[tkyasx78]

I wonder how the stones will be cut... i would love a 2 ctw pair of studs!!

 

[blueMA]

It is true that people will always prefer the genuine gems due to the rarity (great quality corundum are actually rarer than diamonds) and the implicit value, but whether the desire to spend so much, even for cultural pressure, by the majority public for additional/upgrade pieces to sustain the demand at the high price level would be another question.

 

[Jaa89]

I think that there are a few factors that are being overlooked here, millennials are the most well educated generation of Americans ever, they're extremely open minded, and most of all their cost conscious. I am a lawyer in my late twenties (millennial), and I, like a lot of other millennials, have started to make decent money as of late, but just like a lot of others, have an abhorrent debt-income ratio. I am currently looking to buy an engagement ring and like most others am looking for the most bang for my buck. I've been diligently researching both mined and man made diamonds and as of right now I am torn. I can tell you right now that I don't at all buy into the idea of a diamond being rare or unique. I also don't at all look at a diamond as a thing of value because in reality it's a sunk cost that I will never see a return of investment on. I'm open to the idea of a MMD, but like most others I don't want to overpay for something that I could have for a fraction of the price a few months from now. And I think that's the approach most millennials take with regard to MMD and mined diamonds, it's all about value and bang for your buck. You have to remember that this is the instagram generation, the generation that spends more money on experiences than tangible items.

 

[ChristineRose]

They are not selling diamonds over 1 carat, they are not selling them lose, and they are not selling them in lifetime quality settings. They are hoping to put competitors out of business and keep the engagement ring market focused on mined diamonds.

I'm not sure if it will work. If they can really sell at that price without a loss, then competitors should start marking their engagement material down.

 

[Texas Leaguer]

I think that there are a few factors that are being overlooked here, millennials are the most well educated generation of Americans ever, they're extremely open minded, and most of all their cost conscious. I am a lawyer in my late twenties (millennial), and I, like a lot of other millennials, have started to make decent money as of late, but just like a lot of others, have an abhorrent debt-income ratio. I am currently looking to buy an engagement ring and like most others am looking for the most bang for my buck. I've been diligently researching both mined and man made diamonds and as of right now I am torn. I can tell you right now that I don't at all buy into the idea of a diamond being rare or unique. I also don't at all look at a diamond as a thing of value because in reality it's a sunk cost that I will never see a return of investment on. I'm open to the idea of a MMD, but like most others I don't want to overpay for something that I could have for a fraction of the price a few months from now. And I think that's the approach most millennials take with regard to MMD and mined diamonds, it's all about value and bang for your buck. You have to remember that this is the instagram generation, the generation that spends more money on experiences than tangible items.

@Jaa89 Welcome to the forum.
You make good points about the sensibilities of this generation of shoppers. It certainly is changing buying patterns and will continue to do so. Merchants must adapt their offerings and marketing approach if they want to survive, much less thrive.

Not to be argumentative, but when you say you don't look at a diamond as a thing of value, what are you comparing that to? For example, an automobile is expensive and has value because it gets you from one place to another. But it depreciates to zero at some point as it ages and deteriorates. A diamond provides enjoyment, has durability to last generations, and a nice quality natural diamond will always have some stored value. Sometimes alot.

 

[tkyasx78]

They are not selling diamonds over 1 carat, they are not selling them lose, and they are not selling them in lifetime quality settings. They are hoping to put competitors out of business and keep the engagement ring market focused on mined diamonds.

I'm not sure if it will work. If they can really sell at that price without a loss, then competitors should start marking their engagement material down.

Yes you would need to buy 2 one carat stones set in what ever is cheapest, have them pulled and reset in a quality setting for a 2 ctw screwback studs.

The old settings could be used for semi precious stones or scrapped at the cost difference.

 

[ChristineRose]

I was interested to see on their website that they're planning to sell necklaces and earrings, but no rings, and that they're setting them only in silver or 10K gold. Nothing bigger than 1ct, and no rings. They're positioning them as costume jewelry, very distinct from precious engagement jewelry. Of course, there would be nothing stopping you from buying (say) a 1 ct pendant in the cheapest silver setting and having it reset in a ring, but I think they're hoping people won't think of that or won't know how to do it--and maybe jewelers will cooperate in making it difficult. I very much doubt they'll be selling the MMDs loose, and it's interesting that they're not going above 1ct, at least not now.

That's why they're not grading them.

If I were I jeweler I'd buy a pile of them, sell the settings for scrap, get the stones graded, and offer cheap engagement rings. I wonder if DeBoers has thought of that?

 

[blueMA]

MMD market is in turmoils for sure. I can't imagine any sane logical individuals paying so much for MMD right now with the De Beers announcement.

 

[tkyasx78]

How much is it to get a 1 ct stone recut to h&a ideal????

 

[blueMA]

How much is it to get a 1 ct stone recut to h&a ideal????

about 300-400 per carats by the best of the best

 

[Texas Leaguer]

I would expect cut quality of MMD to be very high eventually. Manufactureres will have progressively less concern for weight retention as the raw material continues to go down in price.

This may also incentivize the natural diamond industry to improve overall cut quality as more customers begin to compare them to well cut synthetics.

 

[blueMA]

I would expect cut quality of MMD to be very high eventually. Manufactureres will have progressively less concern for weight retention as the raw material continues to go down in price.

This may also incentivize the natural diamond industry to improve overall cut quality as more customers begin to compare them to well cut synthetics.

Absolutely true - with the advent of technologies in the cutting industry, I see more and more great cuts coming out of India and China as of recent. Just matter of time....

 

[tkyasx78]

So assuming a necklace setting that must be bought at time of purchase is 300 the stone is 800 and a recut is 400 and a quality setting for earrings is 400
I am looking at 600+ 1600+ 800+ 400 = 3400 ish for an ideal cut set of 2 ctw earrings??
3400 vs the cost of mined stones would be a steal!

 

[blueMA]

So assuming a necklace setting that must be bought at time of purchase is 300 the stone is 800 and a recut is 400 and a quality setting for earrings is 400
I am looking at 600+ 1600+ 800+ 400 = 3400 ish for an ideal cut set of 2 ctw earrings??
3400 vs the cost of mined stones would be a steal!

Well... except people may be able to send the stones to India or China for less than $10/carat for a recut and polishing...

 

[tkyasx78]

Even better!

 

[Garry H (Cut Nut)]

Just arrived in Vegas for the JCK show and there is a small LightBox adv at the carousel!!!

 

[Jaa89]

Thank you for the welcome! I don't at all interpret your question as argumentative, but I appreciate the thought.

I think I may have been a bit loose with my words. I understand that diamonds do have value, but as I'm considering which diamond to buy I try to think of it as a chattel, something that has personal value but not necessarily monetary value. I think that the closest thing I would compare it to is a nice watch. When I graduated law school I really wanted an IWC and I went out and bought one. When I bought it, I didn't consider what the future value of it might be, I just considered how much I wanted it, why I wanted it, and what effect spending that kind of money might have on my life, if at all. I just think that factoring in future value is risky approach.

@Jaa89 Welcome to the forum.
You make good points about the sensibilities of this generation of shoppers. It certainly is changing buying patterns and will continue to do so. Merchants must adapt their offerings and marketing approach if they want to survive, much less thrive.

Not to be argumentative, but when you say you don't look at a diamond as a thing of value, what are you comparing that to? For example, an automobile is expensive and has value because it gets you from one place to another. But it depreciates to zero at some point as it ages and deteriorates. A diamond provides enjoyment, has durability to last generations, and a nice quality natural diamond will always have some stored value. Sometimes alot.

 

[Johnbt]

"millennials are the most well educated generation of Americans ever"

That's debatable. The numbers certainly show a higher percentage of degrees than previous generations. The question is whether the education they received was equal or nearly equal to what the previous generations received and if they really got true value for their money and the stupendous amount of student debt they piled up.

Many surveys of major employers say it wasn't nearly good enough.

But if they are willing to borrow even more money they can certainly own some nice stones. Or maybe they learned the lesson my Depression-era parents taught me - don't borrow.

From the American Council of Trustees and Alumni
www.goacta.org/the_forum/the-most-educated-generation

Time for my nap now...

 

[blueMA]

When I graduated law school I really wanted an IWC and I went out and bought one. When I bought it, I didn't consider what the future value of it might be, I just considered how much I wanted it, why I wanted it, and what effect spending that kind of money might have on my life, if at all. I just think that factoring in future value is risky approach.

I bought an IWC for my husband and he NEVER wears it. It's in his gun safe and prefers to wear a beater watch...

I see the similar may happen with diamonds, and De Beers is actually encouraging it saying you wouldn't mind losing MMD in the sea.

Cleaver - "Consumers tell us things like, for example, these are the kinds of things you can take on holiday and you can lose in the sea. You’d never do that with your [natural] diamond. "

I may prefer to wear the fashion MMD jewelry more actively in fear of losing/damaging the real valuable thing. If you already own one (pendant, earrings, etc), would you really desire for a genuine one to be kept in the safe?

 

[Johnbt]

All I got for undergrad graduation in 1972 was a stainless Omega Seamaster from my parents. Nice watch and it still runs, but I haven't worn it since I bought my first cell phone. I think about selling it, but it has some sentimental value.

It's not always about the money, is it?

 

[Laila619]

@Jaa89 Welcome to the forum.
You make good points about the sensibilities of this generation of shoppers. It certainly is changing buying patterns and will continue to do so. Merchants must adapt their offerings and marketing approach if they want to survive, much less thrive.

Not to be argumentative, but when you say you don't look at a diamond as a thing of value, what are you comparing that to? For example, an automobile is expensive and has value because it gets you from one place to another. But it depreciates to zero at some point as it ages and deteriorates. A diamond provides enjoyment, has durability to last generations, and a nice quality natural diamond will always have some stored value. Sometimes alot.

To a lot of people, it's more about how practical/useful is this purchase? A car depreciates big time, but it's pretty much a necessity, especially if you live somewhere without good public transportation and you cannot bike or walk. An expensive diamond engagement ring, while certainly beautiful, is, to many, a frivolous, unnecessary purchase because you are just as married with or without one. For folks looking for something pretty and sparkly, but who think wearing $10,000 on one's finger is a poor use of funds, an inexpensive MMD looks like a good alternative.

 

[blueMA]

All I got for undergrad graduation in 1972 was a stainless Omega Seamaster from my parents. Nice watch and it still runs, but I haven't worn it since I bought my first cell phone. I think about selling it, but it has some sentimental value.

It's not always about the money, is it?

Same with my Cartier watch - I never wear my watches anymore since carrying around cell phone.
I have too many jewelries that I keep for sentimental reason but they never get worn anymore.

As the saying goes - been there done that...

 

[Miki Moto]

@Texas Leaguer Great new article... thank you for posting.
I love how DeBeers basically puts MMDs in their place as "fashion jewelry". And this is the best line of all to put MMDs in their place:
"Frankly, we don’t think they deserve grading, because they’re all the same. You can tell your reactor to make whatever you want again and again and again. They have no uniqueness and no rarity factor, so they don’t deserve grading."

All marketing and DeBeers is the master at it.

Now what DeBeers really needs to do is to come up and market a new piece of diamond jewelry women just have to have! The whole diamond trade will really benefit from this increased demand.

 

[OoohShiny]

I bought an IWC for my husband and he NEVER wears it. It's in his gun safe and prefers to wear a beater watch...

I see the similar may happen with diamonds, and De Beers is actually encouraging it saying you wouldn't mind losing MMD in the sea.

Cleaver - "Consumers tell us things like, for example, these are the kinds of things you can take on holiday and you can lose in the sea. You’d never do that with your [natural] diamond. "

I may prefer to wear the fashion MMD jewelry more actively in fear of losing/damaging the real valuable thing. If you already own one (pendant, earrings, etc), would you really desire for a genuine one to be kept in the safe?

I would also ask this question - if you own one, can see the performance, and then are later considering buying a mined stone, would the marked difference in price for no visible difference in performance (assuming buyers in general remain as uneducated about cut as they currently are) actually make any sense or be a barrier you would want to step over?

Or would you think "that's $x000 for no tangible benefits other than satisfying my/my partner's emotional/psychological 'needs' that have been manipulated by marketing by the very people looking to sell to me"?

I'm sure DeBeers et al would happily sell all their inventory and have it kept in safes across the world - it removes it from circulation (therefore supply), driving up demand for remaining (ultimately dwindling) natural stock!


I do actually wonder if buyers of 'fake' MMDs will go the way of some (educated) replica watch buyers - use the internet to buy from a seller of the best quality goods, become educated in what makes a 'good' item and become more discerning and aware of the large profits built in to 'aspirational' brands, realise the 'fakes' do 95+ percent of the 'real' version for under 10 percent of the cost, buy a whole load more over time because they do the job day-to-day and give the benefit of a wide choice of options each day one opens the watch box, but still have or aspire to one or two 'real', more expensive items 'for best'.

This would appear to give the same outcomes that DeBeers is working to, but if the process above does take place, DeBeers will quickly realise that educated buyers want greater transparency of pricing and are more cynical about marketing, so will hold off buying 'the real thing' unless there is a strong emotional or aesthetic draw, or until quality increases to the point that desirability increases and triggers discretionary purchases that would otherwise not have happened.

Are mined diamonds really valued that highly? Will MMDs reduce that perceived value? There is all to play for in this game!

 

[tkyasx78]

omg ! new thread and include pics!!

Just arrived in Vegas for the JCK show and there is a small LightBox adv at the carousel!!!

 

[Miki Moto]

I need to get popcorn! I love these threads. @Garry H (Cut Nut) you create the best posts!