SINGAPORE – De Beers, the world’s leading diamond company, is testing a new service of selling third-party polished diamonds to other businesses through its online auction platform.
The service is being launched from Singapore, where De Beers’ Auctions Sales business has been based since 2013 to allow the group to be closer to its customers in India and the Asia-Pacific, said executive vice-president of auction sales Neil Ventura in an interview with The Business Times.
De Beers, the single largest producer of rough diamonds by value in the world with a 30 per cent market share, traditionally sells only rough diamonds that it mines and produces.
Some 90 per cent of these are sold through selling events to authorised bulk buyers known as sightholders, while the rest are sold to small and medium-sized companies via online auction.
In June this year, in response to customer feedback, it started the service of selling rough diamonds produced by others on its online auction platform.
Due to customer demand, the group will from Thursday also extend the service to polished diamonds over five carats or of fancy colour, said Mr Ventura.
Diamonds sold on the platform will have to be accompanied with evidence documenting their manufacturing history and showing that they come from rough diamonds which have the Kimberley Process certification.
“This pilot is really a result of our dialogues with our customers,” he said. “What we’re offering here is a new route to market.”
De Beers customers currently sell their polished diamonds through traditional bilateral negotiations, their own networks of downstream customers, and existing online platforms, according to Mr Ventura.
What De Beers offers through the new service is exposure to a very large global customer base, he said. “We can do it in a way that differentiates the sellers – because they will be adhering to these higher standards – and provides assurances to the buyers across the world who will be bidding.”
De Beers’ Auction Sales unit is based in Singapore; of the unit’s total headcount of 34, 19 are based in the Republic. Since moving here in 2013, the group has sold US$1.3 billion worth, or 5.5 million carats, of rough diamonds through the country.
Under the auction sales channel, rough diamonds across a variety of different grades – from very high end industrial quality – are brought to Singapore where they are evaluated and sorted into batches carrying similar characteristics.
These are then taken on roadshows for viewing by potential customers in cities such as London and Antwerp, who will eventually bid for the stones in an online auction on a specific date.
With over half of De Beers sales being made in the Asia-Pacific, the move by the Auction Sales unit to Singapore is part of a long-term positioning of the group, Mr Ventura told BT.
The country is attractive for being safe and secure, and the “great availability” of talent, he added. “Singapore just really ticked all our boxes.”
sandrea@sph.com.sg
This article was first published on NOVEMBER 04, 2016.
Get The Business Times for more stories.
