The market for lab-created diamonds loses pieces

Lab-grown diamonds: when they first emerged on the market, gaining popularity after Frank Ocean launched his own jewelry brand, it almost seemed like they would turn the industry upside down. At the time, sustainability was a hot topic, and there was a strong belief that the market would embrace alternatives to certain products or materials. People said diamond mining was a very dirty business, that the value of diamonds was a marketing myth, and that lab-grown diamonds had nothing to envy in real ones – evidently, that wasn’t the case. Amid increasingly unstable demand for diamonds, a devaluation of natural ones, and sustainability concerns, since lab-grown diamonds are produced using a lot of electricity, the destabilization of the market has shaken one of the sector’s symbolic producers, De Beers, whose sales have dropped, prices slashed, and which was, last year, even unofficially “put up for sale” by its parent company, Anglo American. Today, De Beers Group has announced the closure of its synthetic diamond jewelry brand, Lightbox, because not only have lab-grown diamond prices collapsed along with profit margins, but also because synthetic diamond sales have surpassed those of natural ones. So what happened?

According to Al Cook, CEO of De Beers Group, market dynamics have changed drastically since Lightbox was launched, when lab-grown diamonds cost $800 per carat. Since then, however, wholesale prices of lab-grown diamonds have plummeted by 90%, largely due to mass production from countries like China and India and falling manufacturing costs thanks to technological progress. «The fact that you can now buy a $299 engagement ring from Walmart would be a win in the eyes of my predecessors,» Cook told the NY Times. «People didn’t view that kind of purchase as an heirloom or an investment. And because some retailers are still selling that ring for $3,000, we need to work on differentiating and making the natural diamond more desirable.» The situation is serious because, as revealed in the same article we cited, De Beers owns two billion dollars’ worth of unsold diamonds – the result of a crisis with possible macroeconomic and geopolitical roots, such as the ban on Russian diamonds or U.S. tariffs, but also clear social implications, like the global decline in marriages. Now De Beers is preparing a narrative shift: it has developed the DiamondProof device to authenticate gems and has also announced massive investments and global campaigns aimed at reasserting the uniqueness of real diamonds. One could say, since we’re talking about Walmart, that these affordable artificial diamonds are the Hermès Birkin dupes that the supermarket chain became known for some time ago: market tides simply decided that artificial diamonds were a kind of dupe, and their market value was diluted. Not bad for a market that, according to Precedence Research, was expected to reach $30 billion in 2024 and grow to around $98 billion by 2034.

The closure of Lightbox, almost comparable to the shutdown of a diffusion line in fashion, also reflects a broader strategic repositioning by De Beers which, let’s remember, is the third largest rough diamond producer in the world. It seems that by 2025 the diamond group will in fact be sold, and so the company has already worked on a plan called the “Origins Strategy,” presented back in 2024, aimed at optimizing operations and focusing investment on high-margin segments linked to natural diamonds. In short, nothing beats the core business – assuming the core business can recover from the damage inflicted by this dupe market. As the NY Times also explains, back in 2018, the price gap between lab-grown and natural diamonds was just 10%, while today, synthetic stones can cost anywhere from one-twentieth to one-quarter the price of a comparable natural diamond. The retailers at the bottom end of the market are the ones making money: Walmart, for instance, began selling lab-grown diamond jewelry in 2022 and saw a 175% increase in sales in 2024 compared to the previous year. In the same article, a 2024 survey conducted by the American wedding platform The Knot found that 54% of respondents chose lab-grown diamonds for their engagement rings: up from 46% in 2023 and just 12% in 2019.

That doesn’t mean De Beers will abandon lab-grown diamonds entirely. Its subsidiary Element Six will continue focusing on their production, but returning to their original industrial and technological uses, including semiconductors, quantum technologies, and ultra-precise tools. And in terms of jewelry? The issue, since we’re talking about luxury, is the conflict between accessibility and rarity. Lab-grown diamonds are virtually indistinguishable from natural ones to the naked eye, and collective spending power, especially among young people, is declining along with the prices of these affordable jewels. Unfortunately, it’s a narrative we’ve already seen in fashion with leather alternatives, archive re-editions, and even NFTs: once the excitement of the new wears off, all these alternatives turn out to be pale imitations of the real thing. Just as no mushroom can replace real leather, and no digital sneaker will outsell a sneaker you can actually wear, the true perceived value for customers lies in real diamonds: a lab-grown diamond is, in the end, costume jewelry with extra steps; in terms of perception, they’re glorified cubic zirconia. The point now is to distinguish the real ones from the “fake” ones – an analyst interviewed by the NY Times said that if the industry fails to clearly separate the two types of stones, «it will be suicide for the industry».