Just as rising rough diamond prices since around May have indicated a degree of recovery in the diamond trade, so the growth in demand for certificates has offered an insight into the state of the market, www.antwerpfacetsonline.be says. Major labs are reporting a rise in demand for grading reports, indicating that sales are, indeed, rising. However, although the rise in demand for certificates is an indicator of the current state of the diamond trade, in the longer term, there has also been an increasing request for such reports.
It is largely in the past decade that there has been a strong rise in demand for them, particularly for smaller diamonds. As consumer awareness of diamonds, including their characteristics and provenance, has grown, so has demand for certificates. Buyers want to know exactly what they are purchasing, and also to receive a certificate as a type of guarantee. However, it is not just rising demand for certificates that has been identified by some of the world's leading labs, but also a request for the "extras" that are now available.
Georges Brys, general manager of HRD Antwerp NV, said there has been a rise in demand since the end of the summer vacation. Although there was weakness in August, there was a rise in demand in September and the first part of October. "We were anxious to see what would happen after the big Diamond Trading Company sight of July, and these stones eventually came through for certification," Brys said.
"We are seeing three main trends. More stones are being submitted for certification; larger numbers of bigger gems are coming in; and more requests for extras, such as sealing and inscription. Customers also feel more comfortable because they can check their grading reports on the Internet in the comfort of their office or home. "
The rise in demand for certificates after a lengthy period of decline was confirmed by Roland Lorie, CEO of IGI Worldwide, who said that it started in the middle of this year. "We are seeing an increase all over the world, particularly in the Far East and India where the figures are better now than before the crisis struck in September 2008. To a lesser extent, the situation is also improving in the United States and Europe.
"I was not expecting the situation to turn around so quickly. Like everyone else, I thought the recovery would only start next year because diamonds are not the first thing that consumers think about at times like these."
For Brys, the reason behind the rise in diamond certificates is clear. Buyers want to be sure about the quality of the diamonds they are purchasing. And that is achieved by having a neutral third party confirm the characteristics. "There is also a demand for reports for smaller diamonds which is something we did not used to see," Brys said. "That may be because there are more sales in the Far East where smaller gems are bought."
Lorie says there is a simple explanation for the growth in the number of certificates requested for smaller diamonds. "For people buying a $1 million item of diamond jewellery, they are buying the brand and that provides them with the reassurance they need. However, for someone buying a $2,000 diamond ring which is a large amount of money, then they are happy to pay another $25-$40 for a certificate which is like a guarantee for them. For many first-time buyers, diamonds are an unknown. Where should you buy? Who can you trust? How do you know if the salesperson is telling the truth? Most times when a prospective buyer of diamond jewellery walks away with buying, it is because the vendor did not give them enough confidence. The consumer is looking for peace of mind, and certificates can provide that."
Brys says there are many opportunities for marketing diamond certificates. Firstly, the firm has launched a modern, interactive website which provides a wealth of information in several languages, and also gives customers the ability to check certificates online, thus saving the time.
"In addition, we are trying to help diamantaires and jewellers with personalized certificates since more companies are branding their diamonds and jewellery," Brys said. "There are also more cut designs being developed as companies bring in new products. And in order to be able to provide consumers with complete confidence in what they are buying, these firms have come to us to provide third-party testing and certification."
Brys said that examples include Eurostar's Blue Flame with its 89 facets, the Gassan 121-cut, and the Flanders Cut diamonds. There is also the Antwerp Diamond Twins diamond cut, for which HRDand WTOCD, an Antwerp-based diamond research center, created new standards. Before these standards were established, the cut could only be mentioned as a comment on the certificate, but now a dedicated certificate will be provided for the exclusive cut.
"Some diamond companies have seen the financial crisis and its effect on the diamond industry as an opportunity to bring in new products," Brys explained. "Our added value is to provide a certificate. But, more than that, our research department can help them optimise their cut. We can give advice about the cut based on our tremendous experience and wealth of expertise. This gives firms the scientific backing to their creative designs."
Meanwhile, Lorie said IGI is involved with many seminars around the world, both for the trade, jewellers and consumers. In addition, it has been involved in co-branding for many years and has opened offices and labs across the globe. "We have to be present at the consumer level, and that means having a presence in all the diamond centres. We provide a single certificate for the jewellery item, not just the diamond or precious stone but the whole piece including all the stones and the precious metal used. "
From a human and personal perspective, both Lorie and Brys are relieved about the upturn in demand. "We have 600 employees, and you cannot keep them if there is no work. Bear in mind that nobody was buying or selling diamonds in January and February. But it is very difficult to fire people who have been with you for many years. That was the first time I have had to deal with the problem and it was the worst thing I have ever had to deal with. We had to let around 20 percent of staff go but now we are taking them back on again."
Meanwhile, Brys said HRD Antwerp saw a large fall in requests for certificates, but noted that demand has risen in recent months.
