It’s marriage proposal season and commitments are at an all-time high. As well as sales of factory-made diamonds. Man-made diamonds look the same as natural ones. The only noticeable difference is the price.
“The result is really impressive,” said Edahn Golan, an independent diamond industry analyst. He said March data showed that the number of engagement rings sold with manufactured diamonds increased by 63% from last year, while the number of engagement rings sold with natural diamonds decreased by 25% over the same period.
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Going back another month to February, the data showed that the number of rings sold with lab diamonds that month increased even further, to 80% compared to the year before, while the number dropped 13% for diamond engagement rings. Natural.
“The big fear in the natural diamond industry is that consumers will start accepting lab-grown diamonds in engagement rings,” he said. Too late. “It’s really happening.”
the tide is changing
Why are consumers switching to artificial diamonds? Cost is the most obvious reason. The average retail price of the most popular one-carat round artificial diamond for an engagement ring in March was $2,318, Golan said.
“This is substantially less – up to 73% cheaper – than a natural diamond of the same size, cut and clarity as the artificial diamond, which would cost $8,740,” he said. Also, the lower cost allows couples to buy a larger stone.
“A lab diamond is a real diamond, but it may have taken a few weeks to make,” Golan said. “Natural diamonds were formed over 800 million to three billion years and there is not an infinite supply of them.”
This makes natural diamonds a little more expensive, and prices are likely to rise as Russia’s invasion of Ukraine has tightened the supply chain for rough natural diamonds.
The sanctions directly target Alrosa, partially owned by the Russian government, which the US government has identified as the world’s largest diamond mining company, accounting for 28% of global diamond production.
Artificial diamonds are also becoming popular as consumers become more aware and educated about them, said Dan Moran, a third-generation diamond expert and owner of Los Angeles-based jewelry store Concierge Diamonds. Moran said the typical artificial diamond buyer is typically under 40 and very budget conscious.
Mined diamonds have a controversial history that is linked to the use of child labor in some African diamond mines, as well as the sale of illegally traded “conflict diamonds” that finance conflicts in war-torn areas.
Among millennials and Gen Z, their ecologically conscious mindset and ethical concerns about sourcing natural diamonds is another factor influencing their preference for non-traditional engagement rings, according to a report by wedding planning website The Knot.
Small but growing diamond market share
Although its share is growing, its share of the artificial diamond market remains relatively small.
About 7% of the specialty diamond jewelry market is currently represented by artificial diamonds, up from 3% in 2020, Golan said.
Some big jewelry retailers are pushing the push to bring artificial diamonds into the mainstream. In 2021, the world’s largest jewelry company, Pandora, made a major change by announcing that it would stop using mined diamonds and switch to lab-created diamonds in its jewelry.
Pandora said she is instituting the change as part of an effort to sell sustainable jewelry, and also because consumers are increasingly asking for it.
Signet, the largest US jeweler (owner of the Zales, Kay Jewelers and Jared chains) highlighted the popularity of lab diamond jewelry in its March earnings call with analysts.
Calling it a “fast-growing category” in her jewelry portfolio, Signet CEO Virginia Drosos told analysts that lab-created diamonds are among the big jewelry trends she expects this year.
The company said it has expanded its selection of man-made bridal jewelry at its Zales and Kay Jewelers stores in response to increased demand.
Fine jewelry brand Charles and Colvard, which makes lab-created diamonds, said consumers not only want to look good in the jewelry they are wearing, but feel good about it.
“As the push for conscious consumerism grows, the rise in lab-grown diamonds is not surprising,” said Don O’Connell, president and CEO of Charles & Colvard. “[Os consumidores] they want to know the origin of their stones and make sure they are free from conflict. They are embracing the option of buying fine jewelry that aligns with their values.”
Lab-grown diamond brand VRAI said the pandemic has also sparked attention and action on social and environmental issues. He said consumers are being more considerate and re-evaluating their shopping habits, as well as the companies and industries they are supporting.
There is, however, an important consideration for anyone purchasing lab-created diamonds: artificial diamonds have little resale value.
So while you can’t tell a natural diamond from a factory-made variety, someone with a trained eye can, Golan said. Once a stone is identified as a factory diamond, even if you pay a lot less for it, you won’t get much for it either.
“As an industry professional, people ask me all the time what I think about a ring they have,” said Moran of Concierge Jewelers. “I always say, if you love it, be happy about it. An engagement ring is a symbol of commitment and lasting love.”
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