The history of the diamond market is rich, to say the least. The story can’t be told without mention of De Beers, which has been owned by the Oppenheimer family since the 1920s.
In the beginning, the extremely lucrative diamond trade took place primarily in India, which possessed the entire world’s known supply of diamonds until early in the eighteenth century. Diamonds would be traded to Jewish merchants, who, in turn, resold the diamonds in cities such as Frankfurt and Venice. As the amount of diamonds in circulation increased, these precious gems came to be used as collateral for loans and payment for high-value items. India’s diamond supply was largely exhausted by the early eighteenth century, and for a time Brazil was the world capital for the diamond trade, but the diamond rush in South Africa during the second half of the 19th century really flooded the market, and for a time, devalued diamonds significantly. It was only then that diamonds became available for anybody other than the monarchy.
The De Beer family were almost solely responsible for maintaining the diamond’s reputation as an object to be desired. It only took them a few years to become the owners of virtually all of the diamond mines in South Africa, thanks to the investment of English-born businessman Cecil Rhodes. In 1888, the De Beer family had a monopoly on all of the production and distribution of diamonds coming out of South Africa.
By the time Rhodes died in 1902, De Beer’s controlled 90 percent of the world’s rough diamond production and distribution, but it was Ernest Oppenheimer who made the company an empire. Oppenheimer was a rival diamond producer with his own Anglo American Corporation. After buying his way onto the De Beer’s board, he became chairman in 1927. He developed exclusive contracts with diamond dealers all over the world making it virtually impossible to deal in diamonds outside of De Beer’s.
In the 1930s there was a decline in diamond prices like never before. The Oppenheimer family began a marketing campaign that still resonates today. The diamond began to be associated with love with the famous tagline “A Diamond is Forever.” The United States was the next big market for diamonds, and before too long, it was the engagement gift of choice for all the big movie stars. The bigger the diamond, the bigger the love. Due to this, diamond prices and diamond sales soared in the US after the 1930s. By the 1960s, Japan, Germany and Brazil had all followed suit thanks to similar marketing campaigns.
By the beginning of the 21st century, diamond-producing companies had really had enough of De Beers’ monopoly, forcing a change in structure for the company. In the last decade De Beers has moved away from rough-diamond supplying and put its focus toward promoting its own brand of diamonds and retail stores. Their profits and retail stores are growing exponentially each year.
Although your local retail store still provides easy access to a variety of diamonds, the online shopping market has exploded in the last ten years. If you’re wondering how to buy a diamond online, then simply type the phrase into Google and you’ll be inundated with options. We’ve come a long way from those diamond mines in India.