Suddenly, the legendary advertising line — a diamond is forever — is losing its shine.

Kindly note the images has only been published for representational purposes. Photograph: Kind courtesy Bat Sheva Sida/Pixabay

Most of the diamonds we have in the world today were forged 1 billion to 3 billion years ago. We are speaking about the natural variety here.

There is another kind, which is also created under extreme heat and pressure, but in a matter of half a dozen days or so, and in a laboratory.

This is creating a problem for the natural kind because lab-grown diamonds are also widely considered to be — well — diamonds, chemically and physically. And they look just like natural diamonds, to the extent that you need sophisticated machinery to tell the two apart.

Unsurprisingly, a lot of buyers, especially millennials and Gen Zers, are going in for lab-grown diamonds. They say it is socially and environmentally more sustainable.

What need not be stated is that lab-grown diamonds are cheaper, much cheaper than natural ones — according to different accounts, 80 to 95 per cent cheaper.

‘First and foremost, the massive success of lab-grown diamonds has reduced prices for natural stones well beyond what the mining industry had expected, driven largely by consumers who want more affordable options,’ says a study dated November 26 on the McKinsey & Company Web site.

‘Second, in the context of rising environmental, social, and governance concerns, consumers are looking for improved sourcing traceability for their gems. And third, industry players are navigating sanctions against products from Russia, a major rough-diamond producer,’ the McKinsey study adds.

Suddenly, the legendary advertising line — a diamond is forever — is losing its shine. Worse, the prices of natural diamonds are declining.

Photograph: Kind courtesy Kunal Maya/Pexels

In August, the De Beers Group announced a three-year strategic collaboration with India’s largest jeweller, Tanishq, from the Tata Group to push the sales of natural diamonds in the world’s second-largest market after the United States for these stones.

Though Indians’ affinity for lab-grown diamonds is still at a nascent stage, the lab variety is alluring to first-time diamond buyers as it gives them an option to come into the game at a lower price.

“We are trying to tell a better compelling reality of the fact of natural diamond, from the community where it is mined to where it goes for cutting and polishing and how it has been crafted,” Amit Pratihari, managing director, De Beers India, told Business Standard.

The intent behind Tanishq and De Beers coming together is to educate the customer with the right information about natural diamonds including the sustainability of natural diamonds.

The collaboration focuses on building consumer outreach, deepening capabilities of Tanishq’s retail staff to communicate about natural diamonds, educating consumers about authenticity, and shaping customer experiences.

This collaboration will be supported by a marketing campaign to build awareness and expand the customer base, including first time buyers.

The two companies are also in talks to explore opportunities to collaborate on traceability, how Tanishq’s diamond supply needs can best be met, and further opportunities to use De Beers’ proprietary technologies to support pipeline integrity.

Tanshiq sees 30 per cent of its sales come from the sale of studded jewellery, according to Ajoy Chawla, CEO, jewellery division, Titan Company.

The natural diamond market in India is worth $8.5 billion and expected to reach $22 billion in the next eight to 10 years.

Diamond penetration is only eight to 10 per cent in the Indian market, which indicates a huge room to grow.

According to Future Markets Insights data, the lab-grown diamond market in India was valued at $264.5 million in 2022.

Over the next 10 years, its sales are projected to rise at a compound annual growth rate of 14.8 per cent.

Photograph: Kind courtesy Praveen/Pixabay

To drown out the noise between the natural and lab-grown diamonds, the Central Consumer Protection Authority (CCPA) has invited stakeholders to submit suggestions on a proposed diamond certification.

Vipul Shah, chairman of Gems and Jewellery Export Promotion Council, says natural diamonds will become rare over a period of time, as no new mines are coming in. “It (natural diamonds) will gradually have its own niche market over the years,” he says.

Lab-grown diamonds, since they are technology driven products, are more affordable and cater to an audience where there are first time buyers or buyers looking to buy something affordable.

Shah explains that lab-grown diamonds have a higher acceptance rate in the US. However, even if a buyer wants to buy it, they need to be aware that it is a piece of fashion jewellery and has no investment value.

“As the market grows, natural diamonds will have their own place and lab-grown will have their own. But lab-grown diamonds need to be marketed well to be accepted in the Indian market,” he says.

What is needed, Shah says, is a policy definition for lab-grown diamonds, like they have in the US.

“Currently, in India, lab grown diamonds are not accepted as readily, and people still prefer to buy natural diamonds. But lab-grown is trying to break into a new segment in the country by attracting first-time buyers,” he says.

This is corroborated also by Rajiv Popley, director at Popley Group, which runs a jewellery store in Mumbai.

“We have not seen a shift to lab grown diamonds and there is no situation where the consumer has asked for lab-grown diamonds. In fact, consumers are re-verifying if natural diamonds are being sold to them,” he says.

Meanwhile, Tanishq has placed an order for machines to tell the difference between lab-grown and natural diamonds.

Feature Presentation: Rajesh Alva/Rediff.com