Consumers are taking a shine to lab-grown diamonds but the initial euphoria has faded resulting in the prices dropping sharply in the past year, industry executives said at the world’s first Lab Grown Diamond Symposium in Dubai.
Co-founder and partner at Gemdax, Anish Aggarwal, said the diamonds are no longer untested products, therefore consumers have embraced them.
“We are seeing prices and margins erode at the wholesale level. We see some retailers offering heavy discounts and some even talking about leaving the industry altogether. This is an early-stage industry, therefore, business models can evolve and the entire industry chain may reshape,” said Mr Aggarwal at the event hosted by the Dubai MultiCommodities Centre (DMCC).
Dozens of lab-grown diamond growers, wholesalers and retailers from the Middle East, India, China, the US and Europe took part in the conference.
Accounting for only two per cent of the overall diamond industry, the lab-grown diamond popularity has been growing with India emerging as a major player in this field.
Executive chairman and CEO of DMCC, Ahmed bin Sulayem, said LGD’s global demand has risen rapidly, driving consumer interest and disrupting traditional models.
“The rise of LGD in recent years has been truly remarkable. In 2022, UAE had imports and exports of over $1.5 billion, up by 126 per cent over the previous year. We expect this growth will continue as LGD trade becomes more established,” added Mr Sulayem, noting that one of the main reasons for the high demand is their price points making them accessible to a larger consumer base.
Price drop
General manager of Rough Diamonds, Diamond Foundry, Toby Cruse, said that LGD prices have plummeted to one-fifth in four years.
Several industry executives claim that its prices have dropped by nearly half.
CEO of Bhanderi Lab Grown Diamonds, Snehal Patel, said the price reduction of diamonds has become a major obstacle for manufacturers in the last year:
“Market is not getting stabilised, so ultimately jewellers and retailers are in a dilemma that should we keep the stock, should we buy a lab-grown diamond and make jewellery and sell it to retailers. The entire supply chain is disturbed. This is the major issue we are facing in the past year.”
Senior strategy advisor at Crysdiam Technology Co., Liang Weizhang, blamed improper market and huge production for the price decline in the past year.
“Technology has brought disruption to the diamond jewellery industry so we are also seeing the challenge of price decline… We didn’t do marketing well and the industry can’t handle huge production.”
Founder of Craft Lab Grown Diamonds, Hasu Dholakiya, called on industry players to unite to control price decline:
“Margin is there so players will not leave the industry. Retailers are happy with the product, but it is not time for growers to sell themselves but come up with joint ventures with manufacturers, retailers or wholesalers. That way we can maintain price and demand.”
