What kind of market structure is the diamond industry?

With supply of diamonds being dominated by only a small number of firms, and this unlikely to ever change because of limited resource availability, exclusive resource ownership and high barriers to entry, there’s no denying that the diamond industry has the characteristics of an oligopolistic market.

What is the market structure of the diamond industry?

The oligopoly market structure is inevitable in the diamond industry.

Is the diamond market a monopoly?

From its inception in 1888 until the start of the 21st century, De Beers controlled 80% to 85% of rough diamond distribution and was considered a monopoly.

De Beers.

Key people Mark Cutifani (Chairman) Bruce Cleaver (CEO)
Products Diamonds
Services Diamond mining and marketing
Revenue US$6.08 billion (2018)

Is the diamond industry competitive?

Customer preferences are changing rapidly, and the diamond jewelry industry is facing increased competition from the Experiences and Electronics categories and from lab-grown stones. The lab-grown diamond market grew 15% to 20% again in 2019.

How does diamond industry work?

Currently, a workforce of approximately 1 million people works in the Indian diamond cutting and polishing industry. This sector is well-organised with a four-tier structure. The position at the top of the structure is claimed by The Gem and Jewellery Export Promotion Council (GJEPC).

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Is the diamond industry an oligopoly?

Today, the diamond industry shows every sign of a typically oligopolistic market. The two largest players in the industry enjoy a strong market share of 62.5% as well as the power to set selling prices for their diamonds. The third, fourth and fifth largest players together enjoy 20.2% of market share.

How is the diamond market controlled?

De Beers created their distribution channel, called the Diamond Trading Co., or the DTC. This allowed only approved buyers or ‘sightholders’ to purchase in the non-negotiable DTC sales. They controlled pricing by holding onto rough during a weak market or flooding the market during an increased demand.

What is a diamond business?

Diamond trading is a work of a middleman, you collect the stones from mining companies and sell them to the retailers.

What is diamond merchant?

Diamond merchants – also known as “diamantaires” – openly do business on the sidewalk, negotiating terms for bundles of gemstones as if they were fruit in an open-air market.

When did the diamond industry start?

The earliest diamond-cutting industry is believed to have been in Venice, a trade capital, starting sometime after 1330. Diamond cutting may have arrived in Paris by the late 14th century. By the late 14th century, the diamond trade route went to Bruges and Paris, and later to Antwerp.