It has come to pass that customers who may have eagerly bought a small naturally mined diamond for their diamond engagement ring a decade ago will currently go for larger and higher quality lab grown diamonds for engagement rings and jewellery without blinking. Generally, based on what industry players are seeing is that the younger generation of consumers especially are quite happy to have alternatives and well-placed substitutes for expensive mined stones.
Nevertheless, some industry players are finding it difficult to cope with the transformation due to various reasons. Among the reasons is the high inventory of natural stones that some of these diamond wholesalers, brokers and retailers are carrying and are left with no choice but to bring prices lower which is having a negative impact on margins.
Those dealing with natural diamonds and lagged behind to embrace lab-grown diamond have generally lost out on the overall market share of the new niche. In contrast, early adopters have stocked and are still stocking lab-grown stones and marketing lab grown jewellery aggressively. Some have altogether stopped selling natural stones.
The arrival of lab grown diamonds and its acceptance by the masses has also inadvertently reshaped the perception of natural diamonds being a store of value. Lab grown diamonds are in essence ‘very’ affordable and given the fact that lab grown diamonds are often better-quality stones that are readily available, the value of mined diamonds has diminished significantly which has left those who held diamonds as a store of value in a lurch.
To make matters worse, major industry players have resorted to diminishing the production of natural diamonds and leaned towards marketing their very own line of lab grown diamond jewellery. To put things into perspective, diamond industry giant Anglo-American has had to contend with a $2.9 billion write-down in 2024.
The value of mined diamonds is being pressured downwards to the point where some are deeming them ‘collapsed’ as the edged lower by 34% since 2022. Even the diamond engagement ring segments according to retailers are leaning towards lab grown stones due to their affordability and the diamond engagement ring segment holds a significant market share.
It is becoming quite evident that the future of the mined diamond industry is bleak and some believe that the value of mined stones could drop even further down the slope and lose another 50% of its value within the next few years.
Even discount retailers such as Walmart are getting on the bandwagon based on their offers of 14k white gold band topped off with a 5-carat lab grown diamond for just below $3,000 and the best part about that appeals to consumers is the fact that, nobody would be able to tell the difference.
The presence of discount retailers in the game in essence undermines the exclusivity of diamonds which traditionally symbolized wealth. It is true that diamonds are forever, regardless of the fact if they are natural diamonds or lab grown diamonds, they are in essence the same.