De Beers Diamond Marketing

A story about how De Beers created the modern diamond industry through monopolistic practices and marketing, transforming diamonds from a relatively unknown commodity into a symbol of love and marriage.

"Before 1870, diamonds weren't even considered rare. They were so scarce you'd only see them in places like a Maharaja's crown or Egyptian garments. But in 1870, they found this huge deposit in South Africa. Suddenly there were tons of diamonds, and miners rushed in like a gold rush.

After about 6 months, they realized they were flooding the market with too much supply. Nobody could afford to run their mines. That's when Cecil Rhodes came around and started buying up all the mines. He bought mines from brothers called De Beers, which is where the company name comes from.

Over the next 100 years, De Beers became a monopoly controlling 90% of supply. They intentionally restricted how many diamonds they produced - they could produce 10 times more but didn't. They created an exclusive group of 200 'sight holders' who were the only ones allowed to buy from them. If anyone sold too cheap, they'd get cut off. If new mines appeared, De Beers would either use violence, intimidation, or flood the market with similar diamonds to put them out of business.

By 1936, they realized they needed to create demand. They hired this ad guy George Lock who completely transformed how people viewed diamonds. Before this, diamonds weren't even used for engagement rings. They created two marketing angles: for women, 'diamond equals love,' and for men, 'the bigger the diamond, the more of a man you are.'

They used Hollywood producers to put diamond ring scenes in movies, got fashion designers to declare diamonds were trending, and created the 'two months salary' rule for engagement rings. Their slogan 'Diamonds are Forever' was named the marketing slogan of the century.

This monopoly lasted until about 2000. When lab-grown diamonds emerged, De Beers first fought against them, then created their own lab-grown brand called Lightbox, pricing them at a 90% discount just to destroy the market value of lab-grown diamonds. They positioned them as for 'emotionally shallow events' to protect their myth that mined diamonds are precious and rare."