EDWARD ASSCHER, President, World Diamond Council (WDC), shares his personal views and insights about the challenges ahead for the industry, and his cherished milestones.
As somebody who has observed the diamond industry for many decades, how do you see luxury evolving? And what will be the role of diamonds within the evolving luxury realm?
It is no secret that the luxury products markets have grown spectacularly over the past two decades and will in all likelihood continue to do so. The reasons for this are numerous, but on the one hand it is a result of the accumulation of wealth among those in the upper income levels in the established markets, like the United States, Western Europe, Japan and the Arabian Gulf. On the other hand, we have the rapidly growing middle, upper-middle and wealthy classes in countries like China and India.
Diamond jewellery has benefitted from these trends but has not shown nearly the same rate of growth as have other luxury products. What this means is that within the luxury product sector we have lost market share. To put it more bluntly, over a long period of time we have been attracting a shrinking proportion of the affluent consumer’s growing disposable income.
A key reason for this underperformance is that we have not managed to brand our companies and the products we sell as successfully as our counterparts have in other luxury product sectors, for instance, like handbags. In many respects, we continue to market diamond jewellery as one would sell a commodity or financial instrument, without its own unique identity and compelling story. We need to do this better if we wish to regain and increase our market share. For this, advertising by the brands and generic advertising and marketing by the Natural Diamond Council are essential. I am very positive about the new direction the Natural Diamond Council has taken.
But the current Covid crisis provides diamond jewellery with unexpected opportunity. During periods of distress and uncertainty people rely on those who are closest to them – meaning family and other loved ones. What better way to express your love and appreciation to confirm what you feel than with diamond jewellery?
This unique ability of our products to express emotion is why diamond sales have recovered over the past year at a faster rate than sales of many other luxury products. But to maintain that momentum in the post-Covid period, we will need to ensure that our product’s identity and reputation meet the expectations of our consumers.
What are the biggest challenges ahead for the World Diamond Council?
I shall point out two challenges.
The first is what I would term as “leave no one behind.” Here I refer to ensuring that the programs we develop are appreciated, supported, adopted and implemented by all diamantaires. Whether our colleagues are retailers, rough traders, manufacturers or dealers in polished, we need to convince everybody in our industry that, as businesspeople, we have to satisfy two objectives. The one is moral, and that involves meeting expectations as ethical human beings. The other is achieving our business goals. Over the long term, the second objective cannot be achieved without the first. If we lose consumer confidence, we lose our customers.
By describing this as a “challenge,” one should not assume that there is opposition to the work that WDC does. On the contrary, the diamond industry has historically shown itself to be ready to accept regulations if they are shown to protect the integrity of our supply chain. The challenge is rather educating the grassroots of our industry about systems and conventions that have been formulated by international organisations – and not only the Kimberley Process, but also the United Nations, the Organisation for Economic Co-operation and Development (OECD), the International Labour Organization and others.
Much of the deliberations that take place within the WDC involve representatives of larger companies or industry associations, most of whom are familiar with the terminology and the way we work as an international community. The same is often not true of the tens of thousands of smaller companies of which our industry is comprised.
I do not for one moment discount the role played by our association members in communicating our work and mission to their members, but it is critical that WDC broadens its base and establishes more direct lines of contact with the rank and file of our industry. What we do is on their behalf, and they need to value its importance. Our System of Warranties (SoW), for example, is a remarkably effective mechanism for ensuring the integrity of all diamonds in the distribution chain, on condition that it will be implemented by all companies, irrespective of size, location or role in the business. To make sure that it works, we must ensure that we “leave no one behind.”
The second challenge relates to the intermediary role that WDC plays within the KP, and this is brought about by our representing an industry that essentially is the bridge between the upstream rough diamond producing countries and the downstream markets where diamonds are consumed. We straddle the two worlds, and thus are acutely aware of the considerations and concerns that exist in both.
The governments in the rough diamond producing countries are committed to ensuring that their countries receive fair benefit from their own natural resources, and often are instinctively averse to being told what to do by outsiders.
At the same time consumers in the developed markets, and particularly younger consumers, want to be sure that the products they buy are not ethically compromised. They demand that measures should be implemented to demonstrate that our products have been responsibly and transparently sourced. If we do not meet their requirements, they will go elsewhere. After all, they have choices other than diamonds to spend their disposable income on.
Our challenge as the intermediary in the pipeline is to engender an environment and practices that both the upstream and downstream are comfortable with and feel that they serve their interests.
For us, meeting this challenge is not only of paramount importance. If we cannot do it, we will not be successful in the long run.
What are the biggest threats to the diamond industry’s future?
I see two threats. The most important one is a potential loss of relevance of the Kimberley Process. To many it is obvious that consumers demand more not only in assurances about the sourcing of their diamond jewellery, but also guarantees. To tell them or write that everything is okay is not enough. The modern consumer wants to know exactly what measures have been taken to ensure that their diamonds are sourced, cut and polished responsibly. This requires more than simply indicating that the merchandise is not associated with civil war, which is where the KP stands today. It also means demonstrating that we have taken measures to ensure respect for human rights, labour rights, the environment and the communities where the diamonds are found and produced.
I am a strong defender of the Kimberley Process Certification Scheme, but there is an absolute need to renew and modernise what was successfully formulated 20 years ago, when civil war was the single most burning issue.
WDC’s new System of Warranties, which has a scope that is broader than the original SoW that was introduced 19 years ago, references a range of socially and environmentally responsible international conventions, in addition to the KPCS. In this respect, it is an independent industry effort to meet today’s consumer requirements, and it complements the contribution of others, and most notably the Responsible Jewellery Council (RJC), whose Code of Practice defines the responsible ethical, human rights, social and environmental practices that RJC members are expected to adhere and be certified against. One of those practices, of course, is compliance with the SoW.
The second threat involves the growing prevalence in the market of synthetic diamonds. As a separate market category synthetic diamonds are not a threat. What is a threat is consumers not being provided information about what they buy, either by not being informed properly or, worse, through negligence or deliberate attempts to equate natural and synthetic diamonds.
The mixing of natural and synthetic diamonds must be avoided at all costs. It is illegal to do so. Mixing, on purpose or accidentally, can destroy consumer confidence in diamonds.
One realises that synthetic diamonds are now part of the market’s future. We need to be sure that the difference between the categories is understood by the consumer, and we need to protect the integrity of our natural product.
As someone from a privileged background, do you sometimes wish you could have done more for a certain industry cause?
I was born in 1946, a year after the Nazis had been defeated in Europe. My father and his brother, who survived the German concentration camps, had returned to Holland and had to re-establish their company from scratch. They had nothing at the time, save for their expertise in diamonds and their reputation.
But they managed to rebuild, and when I joined the firm in 1970 it was already successful, with all the ups and downs that we are familiar with in our industry.
I remember attending my first World Diamond Congress in 1972, and at the time had no idea what they were talking about. I became involved in the International Diamond Manufacturers Association in 1975 when the event was organised by us in Amsterdam, and since then have always devoted considerable time to the interests of the worldwide industry.
In 1999, when I first became aware of the problem posed by conflict diamonds, it was obvious to me that the diamond industry needed to take action. We did in 2000, with the creation of the World Diamond Council, and in 2003 with the launch of the Kimberley Process Certification Scheme.
I appreciate that, living in the Netherlands, certain of the most immediate moral and ethical issues I face daily are different to what one may have if living in India. Over the years, I have come to regard with great respect and admiration how my Indian colleagues have grown their industry, and the way some families and their companies have elevated the standard of living and wellbeing of their workers.
The question you ask is one that we should ask ourselves on a regular basis. With hindsight, one can always say, we should have done more.
But we all live in a competitive world, where we balance the interest and wellbeing of our companies with the interest of others and the outside world. Everyone has to take his or her decisions according to his or her own conviction
One thing clear, if we only think of ourselves or of money, our lives would be unsatisfactory. So, we teach our children to try to balance their lives as well – to look out for their own interests, and at the same time to keep an eye for what is happening around them, whether close by or far away. This is essential for a human being.
In retrospect, I have nothing to complain about. I have been lucky, and I have tried to help others as well.
I would like to add one more thing. Over the past two decades the bulk of the diamond industry has moved to India. I believe it to be essential that the Indian diamond community should be better represented in the international diamond organisations. Diamond companies in India should contribute to these bodies by making their family members and staff available for the important work they do. We certainly will welcome them.
What do you consider to be the biggest milestones of your long and illustrious career?
Let me mention several milestones
The most important one was being able to leave our company, Royal Asscher, in the able hands of my children Lita and Mike with full confidence. I did not only retire last year from the company after 50 years, but I also transferred ownership to my three children and did not become a board member.
I think they need to go their own ways and if they need advice, they are always welcome, but only on request.
The second milestone was being elected to the Dutch Senate. I very much enjoyed my term as a Senator.
The third is my first election as President of the World Diamond Council, when I was unexpectedly asked to put my name on the ballot. It was a fierce struggle, but I won. That was a period when the World Diamond Council needed to be modernised, and after my election we did just that.
One book that every diamantaire should read?
I would recommend any good book on management and/or marketing. Some may have expected me to recommend a book on gemmology, and it is a good start, but not more than that. Ultimately, success in this business will come from your ability to manage your business well and market the products you sell. More knowledge in those areas is always a plus.
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A member of one of the diamond industry and Amsterdam’s most well-known families, Edward Asscher was elected President of the World Diamond Council in June 2020 for a two-year term.
Asscher is serving a second time as WDC President, having led the organisation from 2014 to 2016. He is also Vice President of the European Council of Diamond Manufacturers, and is a past President of the International Diamond Manufacturers Association (IDMA) and the International Diamond Council (IDC), a diamond standards-setting organization affiliated to IDMA and the World Federation of Diamond Bourses (WFDB).
In public life, Asscher has also served in functions outside of the diamond industry. A past President of the Liberal Party in Amsterdam, he was elected Senator for this party in the Dutch parliament, serving in the upper house from 2007 to 2011.