Lab-created diamonds have accounted for one-tenth of all engagement ring diamond sales within the US market this year according to recently unveiled industry research.
Industry analyst Edahn Golan presented data compiled from more than 1200 US jewellery stores at the Facets 2022 conference at the Antwerp World Diamond Centre.
The data comes from Tenoris, a consultancy formed by Golan and National Jeweler publisher Chris Casey. According to Tenoris, lab-created diamonds accounted for six per cent of sales in 2021.
Overall demand for diamond engagement rings of all types has dropped substantially in 2022.
However, natural diamond engagement rings seem to have fallen more than their rivals, with sales of lab-created diamond engagement rings falling just 12 per cent year-over-year compared with a 51 per cent drop for natural diamond engagement rings.
The average gross margin for a natural diamond engagement ring is 48.6 per cent compared with 54.4 per cent for lab-created products. That’s a rise of 5.1 per cent for natural diamonds and 0.2 per cent for lab-created.
The average carat weight for engagement rings was 0.84-carats for naturals, compared with 1.38-carats for lab-created. That represents a 1.4 per cent decline for natural diamonds but a 4.9 per cent jump for lab-grown.
During the presentation, Golan attributed the trend to a level of 'pent up demand' in 2021 brought about due to the COVID pandemic.
Bifurcation
Lab-created diamonds reaching one-tenth of all diamond sales has been a prediction made by many industry analysts in 2022.
“I am forecasting that global lab-diamond jewelry sales will exceed 10 per cent of all diamond jewellery sales for the first time this year, with the share even larger in the US,” diamond industry analyst Paul Zimnisky told Jeweller in September.
“I think that share will continue to creep up over the next five years, however, at a slower pace than in the past, as consumers perceive the products as being less substitutable.”
Zimnisky also outlined his belief that natural diamonds and lab-created diamonds would continue to separate as different, non-competing products in the minds of consumers.
De Beers Group CEO Bruce Cleaver echoed this sentiment at the Facets 2022 conference.
“There is lots of the research – it’s not different today than it was five years ago – and that is, if consumers know what they are buying, and if they know the true facts about what a lab-grown is, and what a natural is, they, for the most part, do not regard them as the same category,” Cleaver said.
“They regard lab-grown, and so do I, as a perfectly legitimate category, but not the same thing. Regard it as a fashion jewellery item. You often hear me use the words fun, lighthearted in relation to them, and it’s not the same thing as a natural.”
He continued: “And that’s actually behind our view on, on lab grown. So, we think there is a place for them. We think that, ultimately, and we think there’s some evidence that this is happening already, they will separate into two completely distinct markets.”
De Beers is the world’s largest diamond mining company by value. In 2018, De Beers launched Lightbox Jewelry in the US, a lab-created diamond jewellery business.
Source: Jewellerymagazine