A game about diamonds


  Today’s noble status of natural diamonds is not innate, at least half of the credit should be attributed to a far-sighted enterprise – De Beers United Mining Co., Ltd.
  De Beers has shaped the market position of diamonds for hundreds of years and, of course, its own position in the diamond market. There are two main methods of shaping De Beers: one is to control supply by monopolizing minerals, and the other is to restrict demand and circulation by marketing and publicity.
  As early as 1902, De Beers controlled 80% of the world’s diamond output (mainly in South Africa) through mergers and acquisitions and inventory acquisitions, thus easily controlling the annual supply of diamonds. As long as the diamond market is in short supply, the diamond mine in De Beers’ hands is a cash cow.
  Later, through huge and continuous advertising investment, De Beers almost shaped the diamond ring into a must-have casting material for marriage proposals, and launched an advertising slogan that shines throughout the business history – “Diamonds are forever, one is forever. ”
  Diamond = love, which means that few people will sell a diamond ring – is your love tradable? Even if someone sells it, who will buy it – is your love second-hand?
  Second-hand diamonds are greatly suppressed, and the supply of diamonds in the market can be maintained for a long time.

  Synthetic diamonds are not a new technology that has appeared in recent years. As early as 1953, the Swedish Electric Company took the lead in synthesizing 40 small diamonds, but it was not announced to the public.
  At that time, many countries in the world were researching synthetic diamond technology. Because diamonds, in addition to being eye-catching jewelry, are the hardest substances that naturally occur in nature. Diamond before grinding, alias diamond, is an important industrial material, widely used in mining, aerospace, atomic energy, computer and other fields.
  At the beginning of the founding of New China, all diamonds in China had to be imported from the Soviet Union. In 1959, China and the Soviet Union were at odds. The import is gone, the teacher is gone, the neck is stuck, and I can only rely on myself. After 4 years of hard work, Zhengzhou Institute of Abrasives and Grinding (referred to as the Three Grinding Institute) overcame technical difficulties and produced the first synthetic diamond in China. Two years later, the Third Grinding Institute developed the first diamond-making equipment in my country – a six-sided top press.
  Sanmo Institute has made great contributions to the industrial construction of the motherland, and also laid the foundation for the superhard material industry in Henan.
  After the reform and opening up, some workers and technicians resigned from Sanmao Institute and brought relevant technical experience to various places in Henan, and achieved breakthroughs in gem-quality synthetic diamond technology in the follow-up development.
  At present, China is the largest country in synthetic diamonds, accounting for more than 80% of the world’s total output at the highest level, and the absolute main force of production capacity is Henan Province, and Zhecheng County has even been named “the capital of synthetic diamonds”. What is more noteworthy is that China currently has about 10,000 six-sided top presses, and about 3,000 of which are producing synthetic diamonds – there is still room for further improvement in production capacity.

  1959 was a particularly important year in the history of diamonds, not just because of China. In that year, De Beers also successfully synthesized synthetic diamonds, but they obviously would not dismantle their own table, so they chose to temporarily use this technology. Shelf.
  In the same year, the Soviet Union discovered the gigantic Mirny diamond mine, whose output was so large that it was impossible for De Beers to buy all the diamonds it produced.
  Unable to control the supply, De Beers turned to cooperation with the Soviets. The Soviets verbally promised to keep the water flowing and make money together, but the promise of the proletarian regime to the capitalists depends on the mood.
  In order to deal with the emerging new diamond mines, De Beers came up with a new trick – being a referee. They led the development of a very complex “4C standard”, which stipulates that only diamonds that meet the standards in four aspects of carat, color, clarity, and cut are high-quality goods. The translation is: what I produce is called a diamond, what you produce is just a stone.
  Facts have proved that this trick limited the Soviets to a certain extent. But decades later, this move has become the key to the Chinese victory.
  Since man-made diamonds are exactly the same as natural diamonds in terms of composition, hardness, color, etc., the 4Cs have suddenly become the best advertisement for man-made diamonds. Moreover, the cultivation speed of artificial diamonds is amazing: a 1-carat diamond only takes a week to cultivate. Combined with much lower production costs, the market for natural diamonds is in decline.
  As a giant that has been in the market for a century, De Beers has not thought about tricks. For example, they once changed the advertising slogan to: “The real is rare, the real is the diamond”, to promote the concept of “man-made diamonds are not real diamonds”, and even spent huge sums of money to build a machine that can identify synthetic diamonds machine.
  But for the vast majority of consumers, it doesn’t work very well: everyone spends huge sums of money on shiny diamonds, not certificates, and who wears certificates?

  Looking back on the rise of China’s synthetic diamond industry, I feel a bit unintentional, but after careful analysis of the differences in industrial thinking, we know that there is an inevitable coincidence.
  In the 1960s, the price of one carat diamond in China was 32 yuan, and the daily production capacity of a six-sided top press was more than 300 carats, equivalent to more than 10,000 yuan, which was an out-and-out cash cow.
  According to De Beers’ logic, Sanmo should keep this cash cow well. But Sanmo Institute’s approach is: enthusiastically help technicians from all over the country, and even set up small teams to take the initiative to bring this technology to all parts of the country. Although this will reduce the price of diamonds in China and affect the efficiency of the third grinding institute, it will make diamonds available to factories all over China.
  De Beers started from the jewelry industry, adhering to the logic of luxury goods, and naturally pays attention to scarcity and monopoly; while the Henan synthetic diamond industry embarks on the journey with the national responsibility, adhering to the logic of industrial products, the purpose is to let more people Affordable.
  It can be said that the source of the difference between the two logics is determined from the starting point. In the case where both parties have the same strong execution, the final result is of course predictable.

  At present, synthetic diamond is mainly used in the industrial field, and only a small part is used as jewelry. However, the product competitiveness of man-made diamonds has been obvious to all, coupled with the depletion of the world’s diamond mines, the general trend has emerged.
  According to data from Bain & Company, from 2019 to 2020, the market penetration rate of artificial diamonds has increased from 4.3% to 6%, and it is expected to maintain an average annual growth rate of 15%-20% in the future.
  It has become the consensus of many industry insiders that synthetic diamonds will gradually replace natural diamonds, and China’s major synthetic diamond companies have also begun to make efforts in the jewelry field.
  However, did De Beers lose? not necessarily.
  Remember earlier that De Beers synthesized diamonds in 1959? Although they have not used it for many years, they have maintained their attention and preparation for this technology. 60 years later, they pulled out this “spare tire”.
  In 2018, De Beers launched its own brand of synthetic diamonds.
  Of course, as the leading brother of natural diamonds, De Beers did not really “fall in the enemy” completely. They still maintain the superiority of natural diamonds over man-made diamonds, announcing that man-made diamonds are “only for jewelry, not wedding rings”, and tell customers: man-made diamonds are not suitable for important occasions. The meaning is clear: than technology, I also have; than marketing, I have a thicker foundation.
  More intense competition has just begun.