The value of naturally mined diamonds as a store of wealth has declined considerably as laboratory gems gradually capture more of the market that was once commanded by mined stones. The popularity of lab grown diamonds has also triggered a shift within the industry as retailers and diamond wholesalers turn their attention towards lab grown diamonds to the extent that even family heirloom jewellery is being devalued.

The equation has changed according to investment banks such as Morgan Stanley based on their respective financial analysis which indicates that there is a shift from the old equation of high value-low volume sales to high volume low value sales.

Industry statistics reveal that lab-grown diamonds captured an approximate 14 % of the total diamond supply last year which accounts for 16 million carats compared to about 100 million carats of newly mined diamonds. These numbers are among the factors that have triggered a shift in focus of retailers and diamond wholesalers alike towards lab-grown diamond supply which is presenting strong growth to say the least as demand for mined diamonds gradually flatten.

The same statistics also indicate that demand for lab grown diamond engagement rings, bracelets and necklaces is most likely to increase by 4 % to 18% by next year and increase another 3 % in the subsequent year to 21%. Most lab grown diamonds are manufactured in China and India with the total supply from these two countries amounting to slightly above 12 % of the total global supply.

Compared to 2020 when lab grown diamonds only held about 7 % of the market share (when the value of lab grown diamonds were much higher than they currently are), the rapid increase in market share cannot be ignored by the industry as the trend in growth of lab-grown diamonds is unchallenged and among the main reason behind the reason as to why naturally mined diamonds are losing their store value rapidly.

Retailers are able to offer a wider variety of bigger, clearer and more colourful diamonds to consumers at a fraction of the cost of naturally mined diamonds with the same specs under the 4 Cs. Most millennials have grasped the fact that lab grown diamonds are no different than natural diamonds and most are even aware of the fact that lab grown gems possess better quality in terms of the 4Cs.

However, it is not all smooth sailing for lab grown diamond retailers and wholesalers as intensifying competition among lab-grown players has led to price wars that has resulted in escalating downwards price pressure. Companies such as De Beers Lightbox for instance have even made the decision to announce that the company will stop producing lab-grown diamonds which may or may not be the best way forward.

The entire structure of the diamond market that has been impacted by the lab-grown market is still evolving and developing and it will take another year or two before a clearer perspective on the natural diamond market can be gained.