Biggest threat to the Diamond industry is the industry itself

The Diamond Industry today is at crossroads. It is facing that rare disruption which is challenging the way business has been done in the industry for nearly a century now. Lab-grown diamonds are a reality today – it is one of the significant achievements for mankind to be able to grow diamonds above earth. Yet, the industry is overlooking this inevitability and the fact that this could possibly be another category that expands market. Instead of an opportunity, lab-grown diamonds are treated as a conundrum or the biggest threat to the industry in present times.

 

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Though, lab-grown diamonds have been around for few decades, their applications were limited to range of industrial requirements. The technology to grow Gem quality Lab-grown Diamond have been pioneered only recently (3-5 years ago). These “Diamond Growing Greenhouses” enable diamond seeds to grow into a larger rough diamond by natural crystal growth process, which is responsible for formation of diamonds beneath earth. However, Gem quality Lab-grown diamond production is a miniscule 350,000 carats as opposed to over 125 million carats of mined diamonds (less than 0.3%). Technology to grow diamonds takes phenomenal time to progress and it’ll take several decades before Lab-grown diamonds reaches a considerable fraction of the total market.

Most of the mature industry players have voiced that they do not see Lab-grown diamonds per se as a threat. However, one unsubstantiated apprehension that remains is passing of Lab-grown diamonds as mined ones. Only a few such instances have been reported so far. India’s Natural Diamond Monitoring Committee (NDMC), in a study, has clearly opined that diamond mixing is grossly exaggerated. Besides, as far as the detection of Lab-grown stones goes, they are completely traceable. Lab-grown producers like Pure Grown Diamonds Inc laser-inscribes all their diamonds above a certain weight. Harry Levy (President – LDC, IDC, Gem-A) had admitted that majority of Lab-grown diamond producers are ‘straightforward’.

Unfortunately, the entities in the industry that have the ability to disseminate knowledge to consumers and trade, view lab-grown diamonds in a narrow perspective as a threat. Instead of raising awareness about Lab-growns as a separate category of diamonds, they focus primarily on propagating the fear and panic about issue of mixing of grown diamonds with mined.

Though diamonds remain the most desirable item for luxury segments in most parts of the world, they are getting tough competition from latest electronics & gadgets, watches, luxury cars, designer leather goods and many other luxury products or brands. Industry’s bias towards considering lab-grown diamonds a threat is self-detrimental when, lab-grown diamonds can add new category of consumers to diamond market. Industry should instead focus on countering challenges from competing products in the luxury segment.

The real threat the Diamond industry face is not from Lab-grown diamonds but from itself, owing to lack of awareness and comprehensive knowledge about Lab-grown diamonds. Incorrect nomenclature of Lab-grown diamonds as ‘Synthetics’ is another issue. Misrepresentations and inadequate awareness is holding back the industry, which leads to unnecessary panicking over some clichéd ideas.

Differentiation of Lab-grown diamonds is essential and carries no second opinion. However, this can be only effectively tackled by a consistent industry-wide practice of disclosure. Practices like “Chain of Custody” can bring the much-needed transparency in the industry allowing it to counter all kinds of unethical practices, but some how they don’t get accepted and implement. This shows that Industry is not forthcoming and is reluctant to implement appropriate counter-measures on industry-wide scale.

It is thus imperative to educate the industry about Lab-grown diamonds as an opportunity and another category of choice for consumers. Welcoming people to conduct business in Lab-grown diamonds with appropriate disclosure and establishing best practices will enable in creating an encouraging ecosystem for Mined and Lab-grown diamonds to co-exist.

1 COMMENT

  1. Mined Diamond industry is already going through glut of issues, which it has not been able to solve completely, yet. Many players in the industry are willing to look at Lab-grown diamonds as a new category but a small faction within the industry is hindering this opportunity. Coming out of the shadows of the cartel and accepting the future is the only sustainable way to thrive.

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