Global Demand for LGDs “Cannibalizing” Natural Diamond Business
New research by MVI Marketing LLC, called “The MVEye released Global Voices 2022 International Lab-Grown Diamond Consumer and Trade Market Research Report,” and quoted by Diamond World shows that there is “clear evidence that the mined diamond business is now being cannibalized” by the lab-grown diamond business.
It is important to note that the study, which was conducted with over 1,200 North American jewelry consumers and 178 retailers in Australia, Canada, EU, New Zealand, United Kingdom, and the US, was spearheaded by the International Grown Diamond Association (IGDA) and sponsored by GIA (Gemological Institute of America) and LUSIX, Sun Grown Diamond producer.
The study revealed some interesting key findings:
Preferences for lab-grown diamonds increase when consumers are shown the price differential to mined diamonds.
36% of consumer respondents would go over their original mined diamond shopping budget to purchase a much larger lab-grown diamond.
Among those consumer respondents who have recently shopped for and purchased an engagement ring or wedding set, 46% were shown a lab-grown diamond while shopping. Of those who were not shown a lab-grown diamond, 87% said they “may or definitely would have bought” a lab-grown diamond if it had been presented to them.
46% of jewelry retailer respondents in this study (who currently sell lab-grown diamonds) said lab-grown diamonds are “absolutely” taking business away from their mined diamond business.
87% said they are “satisfied” or “very satisfied” with their decision to sell lab-grown diamonds.
For those retailers who do not sell lab-grown diamonds, their two main reasons were “The retail value could drop drastically, leaving me with angry customers” (38%) and “We believe in mined only” (30%).
Liz Chatelain, President, and co-founder of The MVEye, commented: “This research study confirms that the lab-grown diamond disruption has gone far beyond the borders of the USA and is now seeing increasing consumer demand in markets across the globe And there is certainly clear evidence that the mined diamond business is now being cannibalized.”
According to a recent reportby Reportlinker.com, titled “Global Synthetic Diamonds Industry”, the global lab-grown diamond market will reach $17.9 billion by 2027. The market, which was estimated at $12.8 billion in 2020, is growing at the compound annual growth rate (CAGR) of 4.9% over the period 2020-2027. The rough segment is projected to record 4.8% CAGR and reach $12.1 billion by the end of 2027. “Taking into account the ongoing post pandemic recovery,” the report says, growth in the polished segment is projected to record 5.1% CAGR for the next 7-year period.
In a recent interview with Mathew Nyaungwa from Rough & Polished, diamond analyst Paul Zimnisky said he expects sales of lab-grown diamond jewelry “to go beyond the 10% mark of total global diamond jewelry sales for the first time this year.”
It’s not all good news for the LGD industry, however, as Zimnisky further remarks that, albeit a firm growth in demand for lab-grown diamonds, “the supply growth is exceeding demand, which is putting pressure on prices.”
He also noted that lab diamonds are creating incremental demand for diamond jewelry “that would otherwise not exist,” and that “this incremental demand will continue to grow while the share of lab-grown directly cannibalizing natural diamonds will stabilize and level off.”