The natural diamond industry is intensifying its marketing efforts to reclaim market share amidst the rapid rise of lab-grown alternatives. These efforts aim to reshape consumer perception and restore the appeal of natural diamonds, according to diamond analyst Avi Krawitz. The industry is rallying retailers and launching new campaigns, signaling a concerted push to distinguish natural diamonds in the market.
This push comes as lab-grown diamonds (LGDs) have seen significant growth. In the US retail market, LGDs captured 17% of the volume, a substantial increase from just 3% in 2020. Their market share is even higher in engagement rings, where over half of respondents in a survey by The Knot purchased lab-grown diamonds.
The rise of LGDs has significantly impacted the natural diamond industry, with prices for smaller natural diamonds falling to their lowest levels in a decade. For instance, a three-carat lab-grown stone sells for a mere 7% of the price of its mined equivalent. De Beers, a historically dominant player, saw its revenues halved from 2022 to the last year, and its owner, Anglo American, has put it up for sale, valuing the unit at $4.9 billion, though it may fetch less due to declining sales. This situation is described as "permanent cannibalisation" by Ben Davis, mining analyst at RBC, and a "disaster" for the traditional natural diamond market by UK-based jeweller Fei Liu. China is a major producer of lab-grown diamonds, with over 70% of those destined for jewelry originating from factories there, particularly in Henan province. The technological advancements and cost efficiencies in China, driven by inexpensive industrial electricity and government subsidies, have enabled mass production, with one factory alone producing about 100,000 carats a month.
