Anyone in the diamond industry who’s been on social media in the last two weeks will have seen multiple advertisements from Kiran Gems for its new sales event, “Buy Your Diamonds (BYDs).” The world’s largest polished manufacturer held the four-day, auction-style sale from June 26 to 29. It allowed registered users to search for certified diamonds and bid over a base price.
Kiran was almost exultant after the event. Group director Dinesh Lakhani described it as a “massive success” in an Instagram video on June 30. It attracted more than 1,800 bidders from 36 countries spanning Asia, the Middle East, Europe, and America, with Kiran accepting more than 540 of the bids, he reported. A company spokesperson declined to provide revenue data.
“This has encouraged us to explore not just repeat editions, but also other innovative initiatives that build on the same philosophy — simplicity, transparency, and customer-first thinking,” the spokesperson told Rapaport News last week.
BYDs “wasn’t a traditional auction,” Kiran pointed out. “It was a structured bidding event designed to give buyers the flexibility to bid their price within a clear, time-bound framework.”
The company has already started marketing its “Buy Your Parcels (BYPs)” auction, a similar sales event for batches of uncertified diamonds, which will begin on July 21, according to digital flyers and videos it has been distributing.
Beyond the hype
The fanfare — including dramatic footage and customer reviews — might disguise the fact that the Mumbai-based diamond giant is actually following the industry’s lead.
India’s market for online polished auctions and other bidding events has swelled in the past five years as a side effect of challenging trading conditions. Slow sales and inventory gluts in many categories have pushed companies to find ways of moving old goods and beating competitors’ prices without devaluing their remaining inventories. Auctions are also a way of discovering price and demand levels and drumming up publicity.
Some five years ago, only a handful of Indian firms held bidding events, dealers told Rapaport News. Now there are tons of them advertising their events on the screens at the Bharat Diamond Bourse (BDB) in Mumbai.
“Every other day there are two, three companies having auctions,” said a manufacturer on condition of anonymity. “It’s just that Kiran did it in a different way, [with] hype on LinkedIn [and other] social media.”
Price discovery
Pioneers of the model saw it as a way of understanding the market better.
One of them was Shree Ramkrishna Exports (SRK), which launched auctions in 2009, its brand custodian, Shreyans Dholakia, explained on a recent episode of the Rapaport Diamond Podcast. The company had just switched its regular sales to a fixed-price policy that involved no negotiation, the corollary of which was a shortage of pricing intelligence.
“Even today, to all our team members, to everybody, what we say [is that the auctions’] purpose [remains,] and we shouldn’t focus on sales,” Dholakia continued. “Our first priority is to get feedback.”
Competitors started mimicking the strategy as a way to move old goods as the markets weakened.
Face-to-face trading works well when demand is steady. But when sales are slow, as they have been in most categories since 2022, inventories start to build up and suppliers need another outlet. Auctions are a good way to offer discounted goods without reducing the list prices at which they sell their regular wares.
“When the market is booming and prices are going up, you will not find people using auctions aggressively,” said Pranay Narvekar, partner and founder of Mumbai-based Pharos Beam Consulting, which provides consultancy services to the diamond and jewelry industry. “But if they have a lot of stock and want to get rid of it, that’s when you start promoting auctions to sell these stones.”
Increased customer acceptance of the model also supported its spread, said Priyal Shankar, director for information technology (IT) and marketing at Shivam Jewels. The company launched auctions in 2021, mostly for its fresh production.
“Earlier, when I told people we had an auction, they were not willing to invest so much time and then win only a few goods,” Shankar recalled. “Now, because many companies are doing it, it’s sort of, ‘Okay, this is how it works.’”
Premium vs. discount auctions
There are two core types of auction. Sometimes the seller will offer fresh, premium production, with bidders required to offer above a base price. In other auctions, the goods are old stocks that the seller has struggled to move.
In the latter case — often called “discount” or “negative” auctions — bidders usually put in offers below the base price. Kiran’s BYD and BYP auctions were somewhat of a hybrid, since bidders were required to exceed the base price, but the goods were a mix of old and new inventory.
Early adopters of the premium-style, or “positive,” auction included large-stone specialist Venus Jewel, which launched its Preferred Diamond Selection (PDS) around 2001. “For any new diamonds that we polish, we want to offer all customers equal opportunity and time to consider buying it, so we put them into the auction first,” said Venus partner Devansh Shah. “We invite bids higher than our base price.”
Mumbai-based Jodhani Brothers’ progression in the sector underlines how the market has developed.
In 2015, the company launched weekly “positive” auctions, the Jodhani Bidding System (JBS), for its new goods, said owner Vinod Jodhani. In 2021, it set up a second type of bidding process, JBS 2.0, for old inventory, taking place monthly.
These two sales methods now contribute about 50% of Jodhani’s revenue — above the norm for the Indian market. They have also helped raise publicity for the company. “Everyone knows Jodhani has new goods every Tuesday, and [everyone] has a chance to buy every month,” the executive said.
Saving the market
Kiran said BYDs “saw healthy demand across the spectrum, reflecting a broad range of buyer needs and markets” — though several industry participants believed Kiran was mainly trying to promote old goods with low prices.
“The platform attracted interest from both high-volume commercial buyers and more selective, niche segments, which speaks to the versatility and depth of the inventory curated for BYDs,” the company added.
A potential challenge of discount auctions in general is that they undermine the seller’s regular pricing. Yet the model itself is designed to avoid that, enabling manufacturers to offload their dead goods at opaque, reduced prices without affecting the list prices they publicize to the market on their e-commerce sites and on industry trading platforms.
In addition, companies that operate negative auctions will often have a minimum price below which it will not sell the goods. For example, SRK won’t honor bids more than 7% below its list rates, according to Dholakia.
They also represent a small chunk of most manufacturers’ sales, noted Narvekar. “It’s not that it’s going to generate a huge amount of business, but [if] you want to get rid of ‘left shoes’ or you want get rid of stuff you don’t want, it might be a good alternative.”
Image: The Kiran Gems manufacturing facility in Surat, India. (Kiran Gems)
