It’s the season of proposals, and engagements are increasing, bringing a surge in sales of lab-grown diamonds. These synthetic diamonds have become indistinguishable from natural ones, with the only noticeable difference being the price tag.
According to diamond industry analyst Edahn Golan, recent data indicates a 63% increase in the sale of engagement rings featuring lab-grown diamonds compared to the previous year. In contrast, rings with natural diamonds saw a decline of 25% during the same period. The trend continued in February, with a remarkable 80% increase in lab-grown diamond ring sales compared to the previous year, while natural diamond engagement rings dropped by 13%.
Golan notes that the significant fear within the natural diamond industry is the growing acceptance of lab-grown diamonds in engagement rings, a fear that is now becoming a reality.
The primary reason behind the growing popularity of man-made diamonds is their cost-effectiveness. In March, the average retail price of a popular one-carat round lab-grown diamond engagement ring was $2,318, significantly cheaper, up to 73%, than a natural diamond of the same size, cut, and clarity, which could cost $8,740. This affordability allows couples to opt for larger stones without breaking the bank.
Natural diamonds, formed over millions to billions of years, are considerably more expensive, and their prices may rise due to the impact of Russia’s invasion of Ukraine, tightening the supply chain for raw diamonds.
The shift towards lab-grown diamonds is also attributed to increased consumer awareness and education. Younger, budget-conscious buyers, typically under 40, are drawn to the affordability and ethical considerations of lab-grown diamonds. Mined diamonds have a history linked to child labor and the trade of conflict diamonds, influencing eco-conscious Millennials and Gen Z to prefer non-traditional engagement rings.
Although the market share for lab-grown diamonds is growing, it currently represents about 7% of the specialty diamond jewelry market, up from 3% in 2020. Major jewelry retailers like Pandora and Signet are driving the acceptance of lab-grown diamonds, with Pandora announcing a shift to lab-created diamonds in 2021.
The pandemic has further amplified the trend towards conscious consumerism, with consumers reassessing their purchasing habits based on social and environmental considerations. Brands like Charles and Colvard and VRAI emphasize the importance of consumers knowing the origins of their stones, ensuring they are conflict-free and align with ethical values.
While lab-grown diamonds lack significant resale value, consumers are increasingly valuing the ethical and sustainable aspects of their jewelry. As the industry adapts to these changes, the sentiment remains that an engagement ring symbolizes commitment and enduring love, regardless of its monetary value.