Core Viewpoint - De Beers, once a dominant player in the diamond industry, is facing unprecedented challenges due to market changes, competition, and shifting consumer preferences [3][6][9]. Group 1: Historical Context and Market Control - De Beers was founded in 1888 by Cecil Rhodes and established a monopoly over the diamond industry through a Central Selling Organization (CSO) that controlled 90% of the world's rough diamond supply [3][4]. - The company implemented a "Sight" system, limiting the number of sales events and requiring buyers to pay substantial deposits, effectively turning rough diamonds into a pricing tool [4][5]. - De Beers' marketing campaign in 1951, "A Diamond is Forever," successfully linked diamonds to eternal love, creating a strong consumer demand and establishing the "4C" standard for diamond quality [5][6]. Group 2: Current Challenges - In 2024, De Beers' revenue plummeted by 23% to $3.29 billion, with rough diamond sales dropping by 28% and inventory reaching $2 billion [6][7]. - The company's market share has fallen below 30% due to the emergence of new diamond sources and competitors like Russia's Alrosa [7][9]. - The rise of lab-grown diamonds, particularly from China's Henan province, has significantly impacted the market, with lab-grown diamonds priced at about 1/5 of natural diamonds, leading to a 32.8% drop in diamond imports to China in 2024 [7][9]. Group 3: Shifting Consumer Preferences - The perception of diamonds as a necessity for marriage is weakening, especially among Generation Z, while gold is experiencing a surge in demand due to its status as a hard currency [9][10]. - Consumers are increasingly questioning the value of diamonds, with sentiments suggesting that gold is a more liquid asset compared to diamonds, which are seen as mere stories [10]. Group 4: Strategic Responses - In response to the crisis, De Beers is attempting to redefine its market narrative by emphasizing the unique value of natural diamonds and launching new product lines [11][12]. - The company is also focusing on a "diamond traceability" strategy to address younger consumers' demands for sustainability and transparency [12][13]. - However, the effectiveness of these strategies remains uncertain as the market dynamics continue to evolve [13].