The global market of lab-grown diamonds is expected to reach $55.6 Billion by 2031, with an annual growth rate of around 10%. We are already witnessing such growth happening in everyday jewelry retail and wholesale businesses, as more customers are opting for jewelry with man-made stones, so this figure is not surprising. However, with the recent development of an overall diamond market situation, some industry analysts predict that lab diamond share may increase even more.
While the USA will remain the biggest consumer of lab-created diamonds, the rest of the world will play a more active role in the rising demand. The LGD market in Dubai alone grew 126% in 2022, with total sales reaching $1.5 billion and equaling 12% of last year’s global result of $12.24 billion. At the same time, India is experiencing the surge in lab-grown diamond sales, both domestically and in terms of export.
According to Economic Times, the emergence of buyback programs and the expansion of retail networks may result in 60% year-on-year growth in some foreign markets. While the 1 to 2 carat diamonds are remaining the most sought after category, and millennials and Gen Z are continuing to be the target audience, man-created gems are gaining popularity with high-net-worth individuals, which increases the interest in more unique stones. A lot of American jewelers are now stocking the fancy colored lab diamonds, as they are expected to be sold exceptionally well during the holiday season.
The rise of the LGD market is contrasting with what’s happening with the mined diamond industry. The disruption of the supply of the rough stones caused by the conflict in Ukraine has significantly hurt the mined diamond business, which was already weakened due to the COVID pandemic. The consumers’ demand is shifting towards man-made stones, and the industry giants had to respond with cutting on prices - something that was unimaginable just a few years ago. Over the past year the prices for the most popular category of mined diamonds in 1 to 2 carats have dropped up to 40%. At the same time, lab-grown stones are becoming a more popular choice for engagement rings.
As the demand peaks for the holiday season, some analysts expect the LGD market to reach $22 billion just by the end of this year, with a few local markets to increase to 50% share. “I would argue that it will not be far into the future that lab-grown diamonds will likely outsell natural diamonds at the engagement market three to one” said The New York post in their recent thinkpiece. While this prediction is wild, it may not be so far from the truth. As more and more celebrities, fashion icons and famous designers continue promoting the manufactured stones, and popular brands introducing them to their audiences, it seems like the future could very well be lab-grown.