Lab-grown diamonds emerged just a few decades ago but this innovative product happened to come through seven circles of the Hell before it became popular. Once winning the hearts of consumers, it turned out to be the most known and the most-sold jewelry option just for 5-7 years. According to a report by the Antwerp World Diamond Centre (AWDC), the global market share of lab-grown diamonds increased from 1% in 2016 to 20% in 2024 and is expected to make massive growth in the 2030s.
Yet, more often in media, one can read that the popularity of lab-grown diamonds is one step from starting to fade. Some experts predict that the industry has exhausted its resources and all the pillars, that hold the concept of man-made diamond segments to top positions can be ruined in a minute. They call the price decline the first sign of an impending crisis. Analysts predict for lab-grown diamonds a sharp price drop of 25% in 2024 due to excess supply and reduced demand.
So, what are the core arguments behind these predictions, and do they have a rationale?
Rarity and uniqueness
The initial value of the diamonds was in their nature, timeless, and unique allure. Being born in the depths of the Earth’s crusts as a result of natural processes lasting for a billion years, natural stones used to be a kind of miraculous product. In the majority of the cases, people bought not the diamond itself but the dream or status. In contrast to these natural stones, man-made diamonds are a mass-produced option, the production of which takes only a few hours. While two identical natural diamonds could not exist, laboratories can easily produce a thousand identical man-made diamonds. However, for those who cherish the individuality of each gem, loose diamonds from White flash offer a selection that captures the essence of both worlds—timeless allure and modern perfection.
Madestones jewelers are sure that there are no reasons for worry since uniqueness is a feature that could be easily endowed. In the case of lab-grown diamonds, it could be endowed through customization. What can be the most unique for the person than the jewelry designed especially for her/him? It is a rhetorical question – nothing. People indeed purchasing a dream or idea, but it is always better to be a co-creator of this idea than just buying an abstract story that is common for all. Because of this, man-made diamonds are so loved by Millennials, who value true identity and daring diversity. With lab-grown diamonds, they have wide opportunities for experiments. They can offer customization whenever they want – initially design a new product together with jewelers or reshape, reset recolor jewelry options they have worn for a few years and want to change their form, setting, or even color.
Transparency and regulations
The experts, who predict the fading of lab-grown diamonds’ popularity, say that mass production is causing the overflooding of the jewelry market with the products the origin of which is hard to track. They tell about many misleading labels and uncertified products, the quality of which casts a shadow on the overall segment. All these factors are considered to be grounds for eroding the trust and confidence of the purchasers.
Yet, this problem is not a problem at all. Those who are purchasing lab-grown diamonds know exactly that they need to ask about quality certificates to avoid misleading. Man-made diamonds produced and sold by trusted companies comply with all the standards and are GIA-certified. Jewelers can tell even more – the emergence of lab-grown was the reason for revolutionary changes in the diamond inspection area. The need to explore the nature of man-made diamonds, and separate them from natural stones fostered many innovations.
One of the latest is a new method for separating fancy-colored natural and lab-grown diamonds. Traditional screening devices generally use photoluminescence to capture a diamond’s fluorescence and phosphorescence under ultraviolet light. However, a traditional method often doesn’t work with fancy-colored diamonds since the stones may be treated with irradiation, heat, and pressure, which alters their fluorescence and phosphorescence. IGI came up with a new method for screening each color category using advanced techniques such as Fourier transform infrared spectroscopy (FTIR) and photoluminescence spectroscopy, together with magnification.
Environment-friendliness
Experts, who give a pessimistic for lab-grown diamond industry prognoses, also argue that producers of man-made diamonds are not as environmentally friendly as they declare. They share that some man-made diamond producers may also emit more greenhouse gases and use more energy than they claim, depending on the source and type of their electricity. On their stand, it can affect the popularity of man-made diamonds since purchasers become more aware of the drawbacks and limitations of the lab-grown diamond industry.
Although laboratory production is comparatively safe for the environment, the volumes of energy consumption differ depending on the methods used to grow diamonds. Yet, in any case, growing diamonds in laboratory settings is much more environmentally friendly than mining. Thus, according to Frost and Sullivan’s study mining diamonds produces 4,383 times more waste than lab-grown diamonds, uses 6.8 times as much water, and consumes 2.14 times the energy per carat produced. While The mining of natural diamonds has environmental consequences that cannot be overlooked, laboratory growth of the diamonds is constantly improving. Manufacturers are inspired by environmental concerns and market competition and focused on launching green approaches like CO2-neutral enterprises, air diamonds (grown from carbon extracted from the atmosphere), memorial diamonds (grown from carbon extracted from cremation ashes), etc.
Financial value
Natural diamonds used to be an investment item, the value of which can increase with time. Once purchasing an expensive thing one can have no worries about possible future money return through reselling it. Since lab-grown diamonds are initially 50-70 % cheaper than natural diamonds, their resale value is not as attractive as the value of their mined counterparts. Experts are sure that this fact soon will be the cornerstone of purchasers’ choices.
If speaking about long-term perspectives, lab-grown diamonds indeed are not the best investment option. But it does not affect the target audience, who buy them. It was mentioned not once that the primary buyers of lab-grown diamonds are Millennials and GenZ generations – they strive to live today and look for the best possible way to make money now but not wait for decades to get their investments back. In terms of quick profit, lab-grown diamonds overcome mined gems. For manufacturers and retailers, the margins of lab-grown diamonds are between 10% and 26% higher than mined diamonds. Over 70% of retailers, manufacturers, and loose lab-grown diamond dealers reported that they are happy with the profitability of lab-grown diamonds.
Evidently, the lab-grown diamond industry continues developing and it seems that the predictions overviewed above have little chance to become a reality. If we happen to see the price drop for man-made diamonds in 2024, unlikely one can estimate this as fading popularity.
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