Given the state of things within the diamond industry saying that the stakes are high would be an understatement as the diamond mining component, synthetic diamond manufacturers, diamond brokers, diamond wholesalers and retailers are running into each other head-on. The entire diamond jewellery segment including the diamond engagement ring niche has been disrupted due to the advent of lab grown diamonds which are clearly leading the race due to several advantageous factors held by lab grown diamonds.
The spat between natural and synthetic diamonds has thus far only benefited consumers due to the lower prices on both sides. Both prices of natural diamonds and synthetic diamonds have fallen significantly which have given consumers more choices than ever at much lower prices.
The prices of natural diamonds have been on a gradual rise since copywriter Frances Garety came up with the “A diamond is forever” phrase to the extent diamond were even used to expand investment portfolios and as store of value until a few years ago when investors were sent reeling when price of natural diamonds began to depreciate in response to the increasing demand for synthetics which are generally higher quality diamonds in terms of the 4Cs.
Even the diamond engagement ring segment and jewellery segment shifted towards synthetic diamonds when the generation of consumers wanted bigger stones for their rings and jewellery at a fraction of the cost.
Price Disparity between Lab Grown Diamonds and Natural Diamonds
The relatively new option for cheap lab grown diamonds provide the ability to purchase bigger stones with greater 4D elements mainly within the scope carat, colour and clarity which has resulted in a shift in consumer preference towards lab grown diamond engagement rings and other forms of jewellery across the planet.
Most Gen Z and millennial consumers are aware of the fact that the chemical and physical properties of both types of diamonds are the same and it is impossible to tell the difference between natural diamonds and synthetic diamonds without using specialised equipment.
To the naked eye, in most case scenarios, synthetic diamonds generally have more appeal and coupled with the low price of these high-quality stones it’s a no brainer when it comes to making purchase decisions.
Retailers are capitalising on the current trends in achieving sales targets by promoting larger lab grown diamonds within the range of 2 and 3 carats as centre pieces. Such large stones if they were natural diamonds would certainly be deemed ‘unaffordable’ almost instantly by the new generation of consumers.
Apart from the dominant price factor, other factors about lab grown diamonds that the Gen Z and millennial population find appealing is the fact that lab grown diamonds do not raise any questions about environmental destruction and ethical issues.
Currently, the price gap between synthetic diamonds and natural diamonds has been observed to be widening despite the fact that the prices of natural diamonds continue to fall which will result in lab grown diamonds gaining a bigger market share each year until both factions meet at equilibrium.