Jewelers, do you feel the industry shaking?
No? Not yet? They say, diamonds are forever, but will it still be the case for natural diamonds when lab-grown diamonds begin to dance its way to the hands of receptive consumers?
Whatever the answer is, one thing is for sure — lab-grown diamonds are here and it introduces itself as ‘the future.’
The diamond industry must act to counter the growth of lab-grown diamonds and prevent suffering from regulatory, financial, and technological disruption.
Martin Rapaport, Founder of Rapaport Diamond Report and RapNet Online Diamond Trading Network
How are Lab-Grown Diamonds Made?
The lab-grown diamonds industry is the elephant in the room. It was so enormous to deal with that it was ignored for awhile until it became so persistent that the time has come to put down that jeweler’s loupe and talk about it.
Unlike natural diamonds that are earth-mined and formed under intense heat and pressure in the earth’s crust for over millions of years, lab-grown diamonds are formed using the high-pressure, high-temperature (HPHT) process combined with the Chemical Vapor Deposition (CVD) methods.
It replicates the way natural diamonds are formed beneath the earth. It uses pressures of 5-6 GPa and temperatures of 1400-1600°C to synthesize a diamond.
Here, a diamond is formed inside a vacuum chamber with a flat diamond seed plate, and a mixture of gases — usually methane and hydrogen. A hot filament breaks up the hydrogen molecules and the carbon atoms are pulled downward to the seed plate. Within several weeks, crystallization will occur.
Despite many claims that lab-grown diamonds are indistinguishable from natural diamonds, the GIA can definitely identify which is earth-mined and which is synthesized. Some of these distinctions are listed below.
HPHT CVD Graining patterns No graining patterns Uneven color distribution Even color distribution Metallic flux inclusions Occasional dark pinpoint inclusions
The Benefits of Lab-Grown Diamonds
Lab-grown diamonds have many benefits that work as its selling point. These include the following:
- Fewer ethical problems
Since formation processes are different, the lab-grown diamonds industry gets to eliminate most of the ethical issues the natural diamond industry commonly faces. Among these are terrorist funding, money laundering, and environmental damage.
- Higher profit margins and lower prices
The differences in the process enable lab-grown diamond jewelers to trade at lower prices.
- Achievable diamond dream for everybody
Lab-grown diamonds are said to be easier to sell than natural diamonds not only because it costs less, but also because customers can now get bigger sizes, which leads to more customers and more sales.
The Harm of Lab-Grown Diamonds
There are two sides to every argument; hence, while the lab-grown diamonds industry basks in benefits, there are also some risks and challenges. For instance, its ethical practices claim doesn’t mean that unethical practices may not exist. Most of these unethical practices revolve around consumer fraud of different nature.
- Is it earth-mined or lab-grown?
Nondisclosure increases the possibility of mixing lab-grown diamonds and natural diamonds, which leaves the customers thinking they are getting a 100% earth-mined diamond.
- Fraudulent pricing
There may be jewelry retailers who price lab-grown diamonds in comparison to earth-mined diamond without educating customers that the former doesn’t retain its value due to unlimited supply.
- False claims
In their effort to convince customers to buy lab-grown diamonds, there will be jewelry retailers who will exaggerate their negative claims against earth-mined diamonds and overvalue the benefits of lab-grown diamonds.
What Can the Natural Diamonds Industry Do?
Martin Rapaport, the Founder of Rapaport Diamond Report and RapNet Online Jewelry Trading Network, recently gave a talk called ‘Synthetic Ethics‘ at the annual Rapaport Breakfast at JCK 2019.
He stressed that the challenge posed by the growing lab-grown diamonds has helped the natural diamonds industry to focus on unethical practices that commonly plagued the natural diamond trade.
To counter the growth of lab-grown diamonds, he encouraged natural diamonds jewelers to invest in new products that will bring profitability and strive for ethically sourced diamonds. Other proposals are as follows.
- Avoid transactional relationships
Sometimes, there are jewelers who forget that in the diamond industry, you’re not selling jewelry but rather appealing on the emotions of your customers. Here, your product is symbolism — a symbol of love and commitment; hence, incorporating high-level emotions would do great in transcending transactional and often meaningless relationships with customers.
- Demand honest lab-grown diamond disclosure
Addressing the common consumer fraud issues involved in lab-grown diamond transactions, Rapaport called on the natural diamond industry to petition the Federal Trade Commission for lab-grown diamond industry’s full nondisclosure statement concerning value retention, mixture, and more.
- Establish an ethical market for natural diamonds
This ethical market must address prevention of greenwashing and stoppage of unethical sourcing, include source certification, and more. For instance, Rapaport states that RapNet will start identifying socially responsible diamonds by putting a green star on the listings.
- Recycled diamond is an opportunity
Recycled diamond offers an opportunity for the jewelry industry. It is good for the environment and helps customers save money.
To Buy or Not to Buy, that is the Question
Last May, registered RapNet members voted on whether RapNet should provide lab-grown diamond listing and prices.
The result was out and RapNet concluded that it will neither provide a trading platform for lab-grown diamonds (79%) nor publish a price list (74%).
In a separate survey, JCK’s State of the Jewelry Industry Report 2019 also took a deep dive into the customers attitude towards lab-grown diamonds. It revealed that low price (86%) was the major reason customers would consider buying lab-grown diamonds. See the pulse above.
Diamonds Will Always Be a Symbol of Love and Eternity
Whether it is earth-mined or lab-grown, one thing is for sure, “diamonds are forever.”
How about you, would you consider selling lab-grown diamonds? And if you’re a buyer, would you buy it? Why or why not?
Tell us in the comment section below!