During the five-day India International Jewellery Show (IIJS), Alex Popov of the World Federation of Diamond Bourses announced a new round of funding for the proposed World Diamond Mark (WDM).
The WDM’s objective is to be the new marketing arm of the entire diamond and diamond jewellery sector, and aims to ensure the health and future growth of the industry.
The WDM will attempt to re-establish an on-going generic diamond marketing campaign, which was once funded by De Beers.
When De Beers’ market share declined it ceased supporting the international diamond market with its generic advertising, which reportedly cost the company about US$1 billion between 1980 and 2000.
There have been previous attempts to re-establish an industry promotion but the formation of the WDM seems to be one that might come to fruition as it has already gained the support of all members of the World Federation of Diamond Bourses (WFDB).
While the initiative will be a jewellery retailer-based program, where stores become authorised diamond dealers under the WDM, the funding to research and launch the international strategy has been provided by diamond manufacturers and dealers.
“The most important person in the diamond trade is the customer and the first person the customer meets is the jewellery retailer,” Popov said.
In Mumbai, Popov explained that after three days of negotiation, the Bharat Diamond Bourse and Indian Sightholders had “both agreed to contribute a substantial amount of money” towards the first pilot program of the WDM.
In addition, he said that the Gems and Jewellery Export Promotion Council (GJEPC), organiser of the IIJS, had committed to matching the Bharat Diamond Bourse and the Indian Sightholders contribution, dollar-for-dollar.
A non-profit organisation operating from Hong Kong, the WDM was first announced in October 2012 by the WFDB, the largest diamond organisation representing 28 affiliated diamond bourses worldwide.
He told Jeweller, “All diamond bourses have contributed two rounds of seed funding [to the project]. Now that we have secured the first round of funding for the pilot program from India, we go to Tel Aviv in two weeks and we will most likely secure the Israeli round of funding and then we go to Antwerp."
He said that each diamond centre had pledged to match each other.
Popov stipulated that while the Indian funding had been secured – said to be between US$120,000 and US$200,000 (A$130,500 and A$217,000) - and although the GJEPC had agreed to match the whole of the funding of the Bharat Diamond Bourse and the Indian Sightholders, the GJEPC contribution still had to be approved.
“The GJEPC is a government body so it [GJEPC funding] is pending approval by the Indian government, however, this is a watershed moment and from here on the WDM will develop faster and faster,” Popov explained.
Time is now of the essence because Hong Kong has been chosen as the first pilot program to begin 1 January next year. Popov hopes that Turkey can become the second pilot market two months after Hong Kong.
Once approved to become an authorised diamond dealer and use the WDM, jewellery retailers will be charged an annual fee of US$475 plus US$25 (A$515 and A$27) per diamond showcase.
The WDM has gained the support of two international credit card companies that will not only support the program with international marketing, and will offer all authorised diamond dealers a .05 per cent reduction in card fees which, according to Popov, will easily compensate for the annual WDM fee.
At the time of publication, Popov said he was not in a position to name the two card companies but he was confident in the financial structure of the business model so much so he predicts that by the end of the first year it will be self-funding.
“We believe we will end the first year pilot program with more that 4,000 retail members and, given that there are large chains in Hong Kong and China with 1,000-2,000 stores, we believe that’s quite attainable.
“And, if we are correct, we estimate that by the end of the fifth year we will have 60,000 members generating more than US$120 million (A$130m) for generic marketing of which half will come from retailers and half from manufacturers and dealers,” he explained.
Popov stipulated that only after the program proved to be successful would he approach diamond miners for funding.
“Miners have not been approached because we feel we have no right to do so and if we did they wouldn’t contribute anyway. And if they did [help fund] they would call the shots and we would be the slaves to the miners once again, so what would have we accomplished? Nothing!”
More reading: