A Healthy Transition For Diamonds Await Globally: ALROSA

Trade changes when the target customer changes. There is still time for the Indian jewellery industry to rethink the promotional strategy. ALROSA has found its footing in the industry and has witnessed significant advances in organizing the hitherto scattered operations of diamantaires. Jim Vimadalal, office director (Mumbai), ALROSA, opens up about the Russian mining giant’s India experience.

There is no room for discouragement as the millennials do want to buy diamonds, but not necessarily the way or on occasions their parents did, says Vimadalal. “We must accept and adapt to the idea that the demand patterns are shifting and we need to keep up with them. Younger generations will stimulate further growth of the diamond market differently. It seems that millennials are more likely to buy themselves diamonds to celebrate their own achievements rather than for life events such as an engagement, than other generations.”

According to Jim, markets for loose diamond and diamond jewellery behave differently, as a proper presentation of diamond jewellery sets the pace for a compelling origin story of the diamonds studded. “Diamond jewellery industry is more flexible in its marketing strategy and emotional appeal. With diamond producer stocks being down by 28.9% in 2018, global sales of diamond jewellery have been growing at a steady pace over the decade.” Pondering over the international market and consumer behaviour, Vimadalal says financial emancipation of middle-class consumers in the US, China and India are increasing sale. Women are increasingly buying diamonds for themselves and the youth in the United States are still buying diamonds despite being indebted enough for affording luxury items.

To complement this change, marketing campaigns and transparency initiatives must be beefed up. Customers are willing to pay a premium for a natural diamond, so that amount of investment has to be felt in the marketing output also. “While the premium jewellery segment is moving towards individualization and selling a certain experience to the client, Diamond Producers Association is educating the modern consumer about emotional quotient as a value add-on to purchase of naturals,” says Vimadalal. Modern consumers want to know how peaceful, ethical, environment-friendly has been the origin of the diamond resting on them. This is where ALROSA’s tracing technology educates customers about the origin of their precious diamonds, Jim maintains.

On the transparency front, the Bharat Diamond Bourse is considering the possibility of creating an organized auction of synthetic stones which will regulate this business. “While differentiating lab-grown from naturals, the industry has to realize that if a manufacturer consciously reveals the origin of its lab-grown products, he can create a niche of low end, expensive fashion jewellery market,” said he.

Discovering a 118.91-carat gem-quality diamond in Mine International in April, ALROSA is going places. The rough diamond will be passed to United Selling Organization at ALROSA for detailed examination and evaluation. “After a detailed study, I believe, it will be transferred to Diamonds ALROSA cutting and polishing division,” said Jim. Holding the largest reserve surpassing a billion carats, the mining giant continues exploration in Russia at an annual investment of $100 million per year and a little in Africa within the framework of existing joint companies there.

Being the world leader in diamond mining, ALROSA is leveraging the long-standing tradition of jewellery and growing middle-class customer base of India. They are already doing tens of millions of dollars, ‘without dollars’, thanks to their ruble to rupee transactions with 5 Indian companies. “Earlier we only accepted US dollars. Such direct ruble payments save the time of our customers. Eventually, we worked in tandem with various banks to make it happen,” says Jim.

Since setting up the Mumbai office, ALROSA has deepened ties with the Indian industry, particularly with GJEPC and has renewed a three-year contract period for 2018-2020. They signed long-term agreements with 18 Indian companies, Kapu Gems, Mohit Diamonds, VD Global India and M. Suresh to name a few of them. They now have 173 companies from India and with Indian capital who buy ALROSA diamonds at auctions and through one-time contracts. “ALROSA is here to stay,” concludes Jim.