SourcingSep 20, 2023
Natural Diamond Outlook: Indian Diamantaires Navigating Multiple Storms Lab-GrownSep 20, 2023
Lab-Grown Diamond Outlook: Price Declines Aren’t a Deterrent
Some Indian manufacturers think the potential in this young, evolving market outweighs current price concerns.
Rows of chemical vapor deposition reactors used to grow diamonds. The lab-grown diamond industry is growing in India despite the steep decline in prices for the man-made stones.
Mumbai—It was a process that took India’s natural diamond industry more than three decades to accomplish—the transformation from smaller, dispersed manufacturing units to massive, centralized complexes with state-of-the-art equipment.
The country’s emerging lab-grown diamond industry has managed to accomplish the same in a just a few years.
At the apex of the new segment of the industry are factories at mega-scale, employing thousands of skilled artisans and with turnover totaling many millions of carats.
Consider companies like Greenlab Diamonds, Lumex or Kira; some of the networks they have created are mind-boggling.
Greenlab has more than 1,000 reactors, 2,500 skilled employees and an annual production capacity of 2 million carats.
Lumex, which describes itself as an agile marketing and distribution company that can scale its operations as per market conditions, has access to a network of suppliers that can offer up to 200,000 carats of polished to the market.
And Kira, which is just a few months old, is staking claim to the title of currently being the largest grower in the world, with a 700,000-square-foot facility in Surat employing 2,500 workers.
Large swaths of the industry are adopting so-called green energy, such as solar or wind power, and are focused on some of the now popular sustainable development goals—women’s empowerment, energy-efficient processes, and recycling of materials to the extent possible, to name a few.
And most, if not all, of those at the helm are young professionals who have roots in families with a long history in the natural diamond business.
It seems difficult to believe this transformation is taking place against the backdrop of a major dip in price.
In his September “State of the Diamond Market Report,” industry analyst Paul Zimnisky observed, “As of Q3 2023, a sampling of 1- to 3-carat lab-diamonds offered at retail are priced at an average 80 percent discount to that of equivalent-quality natural diamonds.”
He pointed out that the average amount spent on engagement rings in the United States (about $5,500 to $6,500) in 2023 could buy either a 1-carat round natural diamond or a 2.75-carat lab grown one.
Five years ago, the cost of a 1-carat natural diamond was equivalent to only a 1.4-carat lab-grown diamond.
Data provided by Edahn Golan, another analyst who tracks trends in retail sales of diamond jewelry in the U.S., shows lab-grown diamond prices are down 28 percent year-over-year in August.
He reports, “The price gap between natural diamonds and lab-grown diamonds is wide and growing. In January 2020, the retail price of a 1-carat round lab-grown diamond was 35 percent less than a comparable natural diamond … Currently, the price gap is 76 percent even as the price of natural diamonds is declining.”
The gap at wholesale is even wider, more than a 90 percent discount, which is 10 percent higher than it was a couple years ago, observers say.
According to figures from the Gem & Jewellery Export Promotion Council, lab-grown polished diamond exports are down 27 percent year-over-year for the April-August 2023 period dropping to $562.5 million from $765.9 million a year ago, though industry sources say that in carat terms, exports are at prior-year levels.
Large players in the lab-grown diamond manufacturing and distribution segments seem relatively unfazed by the drop in prices.
Vishal D. Mehta of Lumex, which has integrated operations from the trading to retail stages of the pipeline said, “Such trends are reflective of a market that is trying to find the balance between supply and demand and appropriate level of pricing. We have seen it happening in other industries, such as electronics, when technology creates new products and segments, and there is rapid expansion once the changes gain acceptance.”
Smit Patel of Greenlab Diamonds said currently there is “overcapacity in production” and the “surge in supply has outpaced consumer demand.”
The industry has moved past the initial level of prices set during the “high-demand, limited supply” phase. Competition has increased, pushing prices down, even though demand also has increased steadily over the past few years.
Rajesh Lakhani, partner at Kira, said, “Earlier, the prices were relatively high and there was a need for stability and normality, which has now been established. The sector is moving in a positive direction, even now we daily see several new traders and retailers indicating an interest in buying loose lab- grown diamonds or jewelry.”
Analysts believe that even at the lower price levels, manufacturers are able to cover production costs.
Though there has been some accounting loss in value of stock held, including for goods given out on memo, the total value loss is much lower than it would have been for businesses in the natural diamond segment.
Capex (capital expenses) in the sector also is low for now. Some part of the infrastructure at every stage of the lab-grown diamond pipeline, beyond the initial growing, has been taken over from what the natural diamond industry established earlier.
So, what’s next? There appears to be a near unanimity among major players that the market is young and evolving, with its potential clearly established.
Editors' Picks
Sponsored by
The focus therefore has moved to integrated operations that deliver quality.
Lakhani said Kira provides an “all-in-one solution… both growing and manufacturing are in-house… we can supply every need … loose diamonds as well as jewelry at a quality and scale that is unmatched.”
Patel of Greenlab said, “We have been investing heavily in quality and design and now have the capabilities to offer distinctive designs and exclusive cuts. Our focus in not on establishing records with high yields, but creating history with premium quality products, including customization at prices that consumers believe are accessible.”
Mehta of Lumex pointed out that overall, the industry’s technology capabilities have improved significantly, leading to better quality and output.
“We aim to be agile and adapt to emerging trends with a range of products, from a small-diamond service to high-quality diamonds with special cuts, colors and even customized faceting patterns that are patentable and unique.”
As the contours of the future take shape, it seems clear that scale has become necessary, while quality and product segmentation will be the stepping stones toward further success.
Editor's note: This story was corrected post-publication to reflect that Greenlab's annual production capacity is 2 million carats, not 200,000 carats, as previously reported.
More on Lab-Grown
The Latest
EditorsMay 07, 2024
Q&A: Author Vikki Tobak on the ‘Ice-Cold’ ExhibitionTobak, author of “Ice Cold: A Hip-Hop Jewelry History,” shares how the exhibition came to be, and the pieces people may be surprised to see.
EditorsMay 07, 2024
10 On-Theme Looks from the 2024 Met GalaStars adorned themselves in emeralds, platinum, and myriad bird motifs, writes Associate Editor Natalie Francisco.
IndependentsMay 07, 2024
112-Year-Old New Orleans Business Popping Up in Aspen M.S. Rau is set to open a seasonal gallery in the high-end resort town early next month.
Brought to you by
From Registration to Return: 10 Tips to Protect You Before, During and After a TradeshowTradeshow risks are real. Get tips to protect yourself before, during and after and gain safety and security awareness for your business.
MajorsMay 07, 2024
Richemont Acquires Italian Jeweler VhernierThe branded jewelry market is thriving, said Richemont Chairman Johann Rupert.
Weekly QuizMay 02, 2024
This Week’s QuizTest your jewelry news knowledge by answering these seven questions.
CollectionsMay 07, 2024
These ‘Luminaries’ Are Set to Light Up CoutureThe six designers, all participants in the show’s Diversity Action Council mentorship program, will exhibit in Salon 634.
AuctionsMay 07, 2024
Sotheby’s to Auction Sylvester Stallone’s WatchesThe highlight of his collection is the coveted Patek Philippe Grandmaster Chime, which could sell for up to $5 million.
Brought to you by
Rio’s Reimagined Podcast: For the Love of JewelersMeet Ben Claus—grand prize winner of For the Love of Jewelers 2023 Fall Design Challenge.
CollectionsMay 07, 2024
Phillip Gavriel Pays Tribute to Venice With New CollectionThe “Venetian Link” series modernizes the classic Veneziana box chain in its bracelets and necklaces.
Events & AwardsMay 07, 2024
JA Now Accepting Applications for New Bench Jeweler ScholarshipThe Seymour & Evelyn Holtzman Bench Scholarship will provide tuition assistance to two low-income students.
Policies & IssuesMay 06, 2024
Rolex Files Objection to Hallmark’s New Trademark ApplicationThe Swiss watchmaker said the company’s plans to use a new version of the Hallmark crown on jewelry would confuse consumers.
EditorsMay 06, 2024
Q&A: 8 Questions With Anglo American’s Benny Oeyen The executive talked about the importance of self-purchasers and how fuel cell electric vehicles are going to fuel demand for platinum.
MajorsMay 06, 2024
Malabar Gold & Diamonds Opens 4th U.S. ShowroomThe Indian jeweler’s new store in Naperville, Illinois marks its 350th location, part of its ongoing global expansion plans.
Events & AwardsMay 06, 2024
Ben Bridge Jeweler Accepting Applications for Lonia Tate ScholarshipIt will award a graduating high school student with about $10,000 toward a GIA diploma and an internship with the Seattle-based jeweler.
CrimeMay 03, 2024
Second Suspect Arrested in Murder of Colorado JewelerWheat Ridge, Colorado police took a 50-year-old man into custody Wednesday following a two-month search.
CollectionsMay 03, 2024
A Sneak Peek Into PGI’s Couture Platinum Spotlight ProgramPGI partnered with four new and seven returning designers for its annual platinum capsule collection.
MajorsMay 03, 2024
Kristie Nicolosi Joins WJA Board AgainNicolosi, president and CEO of The Kingswood Company, previously sat on WJA’s board from 2011 to 2018.
CollectionsMay 03, 2024
Piece of the Week: A “Bit of LUV” for the DerbyKarina Brez’s race-ready piece is a sophisticated nod to the horse-rider relationship.
CrimeMay 02, 2024
4 Indicted in Burglary Ring Targeting Indian, South Asian FamiliesThe men are allegedly responsible for stealing millions in jewelry and other valuables in 43 burglaries in 25 towns across Massachusetts.
CollectionsMay 02, 2024
Foundrae Launches ‘Horizon’ Collection“Horizon” invites individuals to explore the limitless possibilities that lie ahead, said the brand.
FinancialsMay 02, 2024
Pandora Raises Guidance After Strong Q1The jeweler credits its recent “Be Love” campaign and ongoing brand revamp for its 17 percent jump in sales.
IndependentsMay 02, 2024
Oklahoma Jeweler Glenn Lewis Dies at 68The co-founder of Lewis Jewelers was also the longtime mayor of the city of Moore.
AuctionsMay 02, 2024
Vintage Baume & Mercier With Ties to Elvis Sells for $7K Elvis Presley gifted this circa 1967 gold and diamond watch to Dodie Marshall, his co-star in “Easy Come, Easy Go.”
SurveysMay 01, 2024
Consumer Confidence Falls in AprilConcerns about rising prices, politics, and global conflicts continue to dampen consumer outlook.
TrendsMay 01, 2024
Amanda’s Style File: All Eyes on EmeraldsMay’s birthstone is beloved for its rich green hue and its versatility.
SourcingMay 01, 2024
Opsydia Names New Sales and Marketing Director Jacqui Larsson joins Opsydia with nearly two decades of experience in the industry.
