Diamonds & Gold of Russia
ALROSA Company Limited
Grace Group of Companies

Аlexey Chertkov

The Information Space of the Global Diamond and Jewelry Business

Moscow 2008, №31

Introduction

The development of information technologies has brought revolutionary innovations into the global diamond and jewelry industry. Presently, both manufacturers of precious roughs and jewelry, and consumers of such production are required to conduct an active research. However, this research should not be limited to obtaining and classification of information on sources of rough, end-use products, business entities, and the state regulating bodies. This is only a primary stage of information storage requiring the creative analysis and interpretation. The present-day Internet technologies make it possible for any enterprise or businessman to create and place the information on the industrial, commercial activity in the wide-area network. These technologies enabled businessmen to introduce the information resources they accumulated about the industry into the information turnover.
But this is not enough. This search is being more actively transformed into creation of new technologies which help the enterprises to conduct effective marketing researches and direct sales and purchases of rough and polished diamonds and jewelry worldwide. In this rather conservative business, modern information technologies are rather profitable for some companies, increase sales volumes; all this finally influence the growth of capitalization of the market participants, accelerate the capital turnover, and speed up goods flow. Such innovations are typical for the technological civilization. Accordingly, enterprises of the precious sectors of economy should correspond to new economic and technological realities.
 
The uniqueness of the global diamond market is directly connected with an invariable interest of mankind in special properties of diamonds and products made from them. An exceptional natural rarity of diamonds caused their high unit cost and various application fields for these crystals. While the jewelry industry covers almost all countries on the planet, diamonds are mined only in 24 countries of the world, and seven countries account for over 80 percent of the global production volume. In 2007, the diamond industry of the Russian Federation for the first ever time was the first in the world by total weight of produced diamonds (38.2 million carats). In the global "table of ranks,” Russia steadily ranks 2nd   after Botswana by cost of produced rough diamonds (.63 billion).
Online jewelry sales are growing rapidly. Recent trade results of the largest retail Internet dealers of diamond jewelry prove that the fear of online purchasing is a thing of the past. The world sees a considerable growth of consumers’ confidence in such purchases. The volume of jewelry sold through the Internet is about billion or 3.5 percent of the total volume of jewelry sales.
A prompt interchange of data on a condition of various sectors of the global diamond business promotes faster and more adequate acceptance of any decision. So, diamond manufacturers aspire not to let prices drop because of the global financial crisis which burst out in the second half of 2008. As soon as the largest diamond-mining companies declare about possible reductions of rough diamonds supplies to the market, its participants can instantly correct their marketing strategy to effectively counteract the crisis.  

The global diamond business not only promotes the preservation of the hoarding role (treasure) of rough and polished diamonds, but also makes the essential contribution to expansion of industrial use of diamonds which began in the 1940s. About 60 percent of produced diamonds is used in equipment (from eye microsurgery to space exploration).
Studies of this subject are aimed at the further development of the information culture of diamond and jewelry business, involvement of enterprises of the industry into working out of a policy of transition to information society that will finally promote the creation of a favorable business environment for participants of the market of precious metals and stones.