17 Sep 2019
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2018: The Year That Was…
Top Headlines of 2018
By: Diamond World News Service
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Jan 2 2019 12:06PM
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Reference: 16896  

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2018 has been a somber year for the diamond industry. While the industry was already grappling with the decreasing demand in diamonds amidst consumers, mining conglomerate De Beers announced its foray into lab-grown business with its brand Lightbox. This earth-shattering move by De Beers was viewed as sanctifying lab-grown diamonds in many ways. But before all that the Indian diamond industry was and is still coping with the aftershocks led by one of world’s biggest bank frauds; Nirav Modi certainly didn’t do any favours for an industry that has already been subject to scrutiny by regulatory bodies, banks and what not! In all this, for the first time this year, results for the eighth sale published end of October by De Beers indicated that sales fell below $500 million recording $475 million. So, all is not well in the diamond industry, the only thing that keeps this industry on high spirits is its enduring optimism.

The Unresolved 14000 Cr Bank Fraud
Exactly nine months ago, PNB reported the Rs 14,000-crore fraud on it committed by diamantaire Nirav Modi and his uncle Mehul Choksi, the whereabouts of both of whom are still being deliberated. Meanwhile, the impact this has had on the jewellery industry is colossal to say the least. Jewellers across India are struggling to get credit from banks. RBI has intervened and has forbidden short term financing in foreign currency to avoid more financial havoc. If things continue to remain the way they are, in all plausibility, businesses may shift to China and Thailand and we are looking at many job losses. While the willful defaulters have still not been presented in court, Deloitte released a survey recently stating that banking frauds will continue to be on the rise because banks are underestimating their ability to prevent frauds and this may impact the nature of anti-fraud compliance programmes being developed.

De Beers’ Lightbox Exclusively Sells Lab- Grown Diamond Jewellery
De Beers, the world’s largest diamond company, which controls around 30 per cent of mined stones in the world, announced the launch of Lightbox in May, a brand of fashion jewellery with labgrown diamonds. Lightbox lab-grown diamonds are retailed US$200 for a quarter-carat stone to US$800 for a one-carat stone. The line was launched to bring something new and innovative to the jewellery sector, featuring pink, blue and white lab-grown diamonds in a selection of accessibly-priced earring and necklace designs. One of the products, a 1-carat pendant with white centre stone for $900 was apparently sold out in the initial months of its offering. The fact that Lightbox is only being retailed online and the brand is embracing novel marketing tools like podcasts to reach its audience is testament to the fact that the brand is targeting millenials. This move has been strategic in the sense that it has been implemented at a time when diamond prices are volatile, not to mention the redundancy of diamond mines across the world. While natural diamond enthusiasts are still hot headed about the issue, a handful of wholesalers and retailers in the U.S. are not entirely opposed to the idea of selling lab-grown diamonds. It is still fairly early to say what kind of an impact Lightbox might have on the sales of natural diamonds, but we can say that the impact will be felt sooner or later.

FTC Diamond Ruling Viewed Pro-Lab Grown by Natural Diamond Industry
The US Federal Trade Commission (FTC), after being in talks with the industry for six years, made a number of changes to its jewellery guidelines, including making the definition of a diamond more ‘inclusive’. As part of its renewed jewellery guidelines, the Federal Trade Commission (FTC) implemented a few changes regarding man-made diamonds. First and foremost, its new definition of a diamond eliminates the word ‘natural’ as opposed to its previous definition that suggests that a diamond is a natural mineral. Also, the terminology ‘synthetic’ is no longer relevant considering the FTC suggests that the term is often interpreted as being ‘artificial’ when in fact man-made diamonds are not artificial. For years, the FTC has omitted words like gem, stone, real, genuine and gemstone from their dictionary when referring to man-made diamonds. However, it said that its previous guidelines as, ‘circular, inadequate guidance that relied on highly subjective judgments.’ So, as a matter of fact, man-made diamonds are gemstones and it is appropriate to call it ‘cultured’ like cultured pearls. Consumer’s understanding of what a diamond is and the perception built around for decades could be changed forever with these new guidelines and that is certainly not good news for the natural diamond industry.

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