Kristall, Russia's dominant diamond manufacturer, is looking to expand its consumer branding, the company said.



Maxim Shkadov, chief executive of the state-owned, Smolensk-based firm, acknowledged that for the time being diamond manufacturer Kristall is a brand name in the B to B wholesale market.



Now diamond manufacturer Kristall is moving into the B to C retail market.



“It was not too long ago that we entered the B to C diamond market, but exclusively in Russia. Our next step is to work on the international level," Shkadov said.



Earlier, Kristall had attempted to build consumer diamond branding in the US market, he said. "But heavy competition and the crisis made us abandon that idea simply not to spoil the name. The biggest rival was India, and together with the market circumstances, it became impossible for us to work there. As a result, about 1,500 companies in all have now left the US market."



Shkadov said the introduction this past September of the revived Faberge brand for diamond jewelry and bespoke stones, sold through the internet, is a marketing model with which Kristall has also been experimenting with.



"I doubt that there is much demand for rough diamonds in the consumer market, but certainly companies try to meet consumer interests. Kristall also lets consumers choose the stone and the model they like, and to purchase ready-made jewelry via the internet. So what Faberge does today, I believe, is absolutely right.



“The brand name is good, and the quality should be equally good. Some European companies sell Russian diamonds, but prefer not to mention it, fearing it might damage their individuality. We have been working with luxury jewelers Harry Winston, Tiffany, Cartier, Van Cleef, and others. But before our diamonds reach the client, they pass through a series of buyers and sellers, intermediaries."



On marketing Kristall diamonds polished in China, there are both opportunities and obstacles, Shkadov said.



"We have had our own sales company in Hong Kong for 15 years already, Smolensk Asia – this our subsidiary and it covers all of the southeast Asian markets. It has an affiliate at the Shanghai exchange, and trading there has been very active lately.



"China is a market with a constantly growing potential; everyone looks at it with hope, but the local law does not allow for a faster growth. There are a lot of blocking measures which do not let the diamond market develop at full force.



"The future evidently belongs to China, and we keep our finger on the pulse. China is interested in high quality diamond production, and we supply it. We can see good potential for us there."



About Africa, Shkadov said: "We are interested in almost all types of diamond tenders, and we win many of them. In the beginning you have to run a risk, then your experience shows you what to do. It is obvious that the first time is always risky. You have to be cautious, you have to be observant. Then you develop a concept or plan for this or that source. That’s the way we started to buy from Lesotho. Their rough is constantly appearing at the market, and for today its characteristics are especially valuable."



The problem for Kristall, Shkadov concedes, lies in favoritism. "Although our major sources of rough diamonds are in Russia, we can use any material.



Everything we buy we use for polishing; we don’t speculate. As soon as countries in Africa develop stable selling structures working on normal market conditions, then we will be ready to cooperate. Namibia and Botswana are countries working exclusively with De Beers, and South Africa mostly sells diamonds to De Beers, too. Angola still cannot choose which is better, De Beers or Russia, I mean Alrosa."



But in the Russian diamond manufacturing sector, he sees the reciprocal sentiment, especially toward Indian cutters proposing to invest in Russian plants. "Investments by Indian companies will only favor our competitors.



"All these so-called investors want is just to get to the Russian source of rough diamonds; they need nothing else. Having one million diamond cutters in India, they would destroy everything here. That’s why we will never have Indian manufacturing investment here. If investors want to use us as a conduit for rough diamonds, this is not what we do," Shkadov said.