If you are the person who is tracking the changes in the jewelry market, you could not help but notice the tendency to the market expansion of synthetic diamonds.
The analysts’ predictions that could be evaluated as “hardly real” just a few years ago, had long become a passed stage and a matter of history.
Thus, experts and financial observers forecasted that synthetic diamonds would reach 10 percent of global diamond sales somewhere in 2030 but it had happened in 2022 – 8 years earlier than predicted.
Today, the predictions are more daring and promise that synthetic diamond sales will keep growing.
Due to Global Jewelry Synthetic Diamonds Market [2023-2030] Report, they will move at CAGR (Compound annual growth rate) at 17,9%.
Here is one interesting thing: these new promising predictions do not cause any suspicion or skepticism. Almost everyone knows that taking a new height with synthetic diamonds is a matter of time.
So, what are the preconditions for this knowledge? Are they sound and influential? Let’s unveil some push factors that are fostering synthetic diamond sales.
Progress in research
The unclear nature of the synthetic diamonds was a central stop factor for choosing this product at the time of its early emergence.
Consumers did not have much information about the origin and actual properties of artificial diamonds.
That tiny fraction of available information was not decently proven and, thus, caused a distrust of a newly emerged jewelry phenomenon.
Today, numerous scientific research works confirm the nature of synthetic diamonds and highlight that they are real diamonds having the same properties as natural stones with a single difference – origin.
Science double-checked every optical, chemical, and physical property of lab-grown diamonds and decided to certify them on the same grade system used for certifying natural diamonds.
Jewelers also found ways of distinguishing these two and identifying their origin to increase market transparency and honesty.
If saying shortly, consumers and traders now have better warranties than they had at the beginning of the synthetic diamonds’ market path.
Being made in the laboratory, synthetic diamonds possess incredible advantages starting from ethical sourcing and ending with cost-effectiveness.
Ethical consumption trend
Although the laboratory process of growing diamonds initially aimed to get the biggest volumes of stones in the shortest possible time, environmental friendliness became its core advantage that overcame the initial idea by value.
Sustainable awareness is a corner of nowadays living style and ethical sourcing is an advantage by default that creates additional value for any product.
The trend for ethical consusynmption turned synthetic diamonds from a “false item” into a “must-have” option for many global jewelry trends.
Just look at the list of top synthetic diamonds market players – De Beers, Madestones, New Diamond Technology, Pure Grown Diamonds, WD Lab Grown Diamonds, Zhongnan Diamonds, Zhengzhou Sino-Crystal, Pandora, Diamond Foundry, Swarovski, Huanghe Whirlwind. Some of these companies were among those who refuted the nature of synthetic diamonds, and nobody could imagine that they were about to embrace this product somewhen.
What does this acknowledgment mean for market development?
Apparently, embracing synthetic diamonds by famous brands is a step toward fostering production volumes and getting new advances related to mass production. Read below about volumes and pricing.
Cost-effectiveness and affordability
Sure, ethical sourcing is not the only reason for the commercial success of synthetic diamonds. Pricing is one more convincing factor that makes a bet for ethical diamonds profitable.
Laboratory growth enables producers to launch mass production, which, in its turn, allows for shortening the cost needed to produce a product unit.
Technological progress and growing demand for synthetic diamonds promote price decline in a flashy temp. The initial price gap of 30 % just in a few years has increased to an unprecedented level.
The price for synthetic diamonds is 50 – 70 % lower than the price for natural diamonds.
As a result, an average consumer can afford better and bigger synthetic diamonds than he or she could if preferring natural gems.
And the same profitable situation is for retailers who can have better profit from retail gross margin. When analyzing the retail and wholesale prices of unbranded synthetic and natural diamonds, it appears to be that the retail gross margin of synthetic diamonds in popular carat sizes is as much as twice that of natural diamonds.
If speaking in other words, retailers have to sell synthetic diamonds of $5000 worth to get the margin, which they could have from selling natural diamonds of $10,000 worth.
The term flexibility seems irrelevant when describing the material occupying the top position of the scale of hardness. It is indeed paradoxical but it is the truth and here is why.
Synthetic diamonds are easy to customize. Being grown identically, as a mass option, they could be cut or colored in a variety of ways.
It was not the case with natural diamonds because naturally huge diamonds occurred rarely. Synthetic diamonds can be grown of any possible size and this allows for designing even a whole-diamond items.
Recently, the jewelry market could observe a new milestone achievement in the synthetic diamonds industry – the first 50 ct lab-grown diamond was produced.
Just one year ago society celebrated the previous record – 30.18 ct synthetic diamonds graded in June 2022.
Just one year was needed to almost twice the result. We can only imagine what new can bring us the next year since the advancement of technology is becoming more and more surprising.
Three previous groups of factors explain the reasoning – why end users or retailers prefer synthetic diamonds to natural gems.
Yet, there is also a group of so-called socially-related factors determined by an average consumer profile or developmental tendencies inherent to the global community.
What do we mean here?
Personal level – purchasing power
This group of factors could include two important aspects. The first one is in comparatively increased personal disposable income that allows one to make a choice more freely and consider trends or social values.
The second one is in gaining purchasing power by Zoomers, who are highly devoted to brands, and ethical sourcing and more often prefer synthetic diamonds.
Social level – the era of technologies
We are living in times of technology. Technological progress requires an innovative solution that could help reach a new point in the quality of functioning – rapidness of the process, the effectiveness of operations, compactness, etc.
Diamonds are urgently needed to make these advancements happen.
And synthetic diamonds are indeed valuable innovations in the era of industrialization since they have a wide application not only in the hi-tech segment but also in construction, mining, medicine, aviation, and other areas.
Sure, the growing industrial consumption and growing individual purchasing power alongside solid warrantees, ethical sourcing, and affordable price are significant factors for the rapid expansion of synthetic diamonds in the global diamond market.