April’s BaselWorld feeling that the

2007 show one-upped last year’s

European trade show.Sellers of big diamonds

were particularly upbeat as the prices for

10-carat-and-up diamondswere reportedly

“record-breaking.” In addition to generally

good feelings about the show, vendors

heard about developments and trendswithin

the Israeli industry fromEliAvidar,managing

director, Israel Diamond Institute (IDI).

Avidar explained that having established

and developed a solid infrastructure, the

Israeli diamond industry is now maturing

into the third phase of its development, in

which the focus will be on marketing and

branding. “This is a phase of branding,

marketing and initiating new products and

projects,” he told attendees.

Describing the traditional way of doing

business through the trading of stones,Avidar

observed that, as the marketing strategies

of Israeli companies have become more

sophisticated, the industry has witnessed

“high-profile,strategic partnerships between

our diamond companies and jewelers,aswell

as numerous joint ventures inmanufacturing

between Israeli and foreign entities.”

In line withAvidar’s analysis,more than a

few Israeli Diamond Trading Company

(DTC) sightholders have already begun to

brand their diamonds in jewelry and create

partnerships overseas.MosheNamdar&Co,

one of the first companies to brand a diamond

with the Leo Cut, said it was going to be

launching a jewelry line around the cut in

the next fewmonths.The jewelry collection

will be targeted at Italy and Spain,where the

cut is currently sold.

DTC Pressure

The recent push toward jewelry branding

was in no small part due to initiatives by

the DTC.“The beginning came from the

fact that the DTC advised sightholders to

do branding and jewelry in order to remain

sightholders,”said SharonTammam,marketing

director,Namdar.

Michal Marx, marketing and communications

manager with the Dalumi

Group, agreed.“It started with Supplier of

Choice (SOC). Since profitability was

decreasing, the DTC realized that everyone

should go downstreamtoward the consumer,”

she said.

Unlike Namdar,Dalumi has chosen not

to brand its diamonds and instead focus its

efforts on developing strategic partnerships

overseas. In this vein, the sightholder has

created exclusive marketing packages for

a few of its largest clients.One such deal

involves Japanese retailerTokyo Pearl and

both sides are pouring tens of thousands

of dollars into marketing.Under the terms

of agreement,Tokyo Pearl has agreed to

mount Dalumi diamonds into its own

designs, creating a specialty jewelry brand.

For smaller companies likeHadadDiamond,

branding is becoming increasingly important

as a means of assuring consumers that they

are buying a quality diamond.With the

evolution of internet marketing, Doron

Itzhakov, Hadad’s managing director of

marketing, fears that any small company

can put up a sophisticated site without

having a reputable product behind it.

“Ten years ago, you were dependent on

the salesmen who were selling goods,”

Itzhakov said.“Today you can click on the

web and find 1,000 diamonds.Iwant to know

who is really manufacturing the stone.That

is why you need branding,”he explained.

Looking to China

Companies like Hadad are receiving an

extra boost from the IDI,which has vowed

to focus its marketing efforts on small and

medium-sized businesses this year as part of

the second stage of the “All you could ask

for in one” campaign.The first stage of the

campaign billed the Israel diamond center as

a “one-stop shop” that could meet all the

needs of diamantaires,including production,

cutting,polishing andmarketing.Citing the

tremendous feedback the IDI received in

response to the campaign,Avidar said the

second phasewould“cash in the check on last

year’s success”andwould deploymore focused

messages on individual market segments.

In particular, the IDI will be providing

services to smaller Israeli companies inChina

by opening up aHongKong office that places

local resources at the disposal of vendors.

Such services are particularly critical to

companies that often cannot afford to open

up individual offices overseas.And it takes on

added importance in light of statistics cited

byAvidar,which showed that up until 2005,

90 percent of all investment inChina—across

all industries—failed if the investor did not

have aChinese partnerwho understood the

business culture and language.

Avidar also said the IDI planned to support

Israeli companies at five different shows

in China this year and would open up

pavilions at the shows if there was enough

interest from vendors.