These lab-grown diamonds, also incorrectly referred to as synthetic diamonds, are 100 per cent real diamonds and have started taking the spotlight lately. Being 30 to 70 per cent cheaper, environment friendly and conflict free, lab-grown diamonds have found increased acceptance among the consumers. Hollywood actor Leonardo DiCaprio foreseeing the immense potential in this sunrise industry has along with some prominent Silicon Valley billionaires invested in a California-based Lab-grown diamond start-up.
The nature of business in the Indian subcontinent is also quite encouraging. Talking about 2014 estimate, lab-grown diamond is around 0.1 to 0.5 per cent of the total sale of mined diamonds for end applications. It's expected to grow in the next five years to 1 to 3 per cent of the total diamond sales. According to a recent study of Gem Jewellery Export Promotion Council (GJEPC), rough diamonds trade in, in India between April-May 2015 valued about Rs 17,040 crore, a drop of 20 per cent compared to Rs 21,135 crore during the same period previous year.
GIA (Gemological Institute of America), in the past bought 16 of these CVD-created, round-brilliant, neutral diamonds for testing in dimensions extending from 0.24 carats to 0.86 carats. The ensuing report, titled ‘2012: The Year Synthetic Diamonds Made Their Mark’ ruled that the stones were comparable to top natural diamonds. Presently, lab grown diamonds are created by less than half a dozen companies worldwide. However, even collectively, they account for barely 2 per cent of the total international market for diamonds.
To get an insight, Kunjal Karaniya spoke to few of the leading names across the globe:
Nikolay Khikhinashvili –Director General, NDT
Nitul Shah, Managing Director, Green DTC
Ashish V Jain, CEO, PDC Limited
Niraj Johri, Designer and Director of Sparkling Hues
ABOUT LAB GROWN DIAMONDS
Nikolay Khikhinashvili –For more than five centuries people have mined and polished diamonds, ever since they have found first diamond in Golconda and this entire time people have dreamed to create something similar to the natural diamond. People are dreaming to turn one type of carbon – graphite to another type - diamond. And finally the brightest minds of the world have found the way! The obtaining of man-made diamonds gives you the feeling of satisfaction that at least indirectly you will not be involved in the wars in Africa and death of people. You will feel the joy that you save our planet's nature, flora and fauna. You can be sure that your diamonds were produced using the highest achievements of science and technology of the century.
Nitul Shah -Lab grown diamonds are produced by utilizing two gem-quality diamond creation processes: High Pressure-High Temperature (HPHT) and Chemical Vapor Deposition (CVD). In both processes, a small diamond seed is placed in an environment that contains carbon. Under suitably controlled conditions, the diamond grows, atom-by-atom, layer-by-layer, recreating nature’s process.
Ashish Jain - Lab Grown Diamonds are REAL DIAMONDS. The only difference is point of Origin. The simplest way to explain Lab Grown Diamonds is to understand the concept of a typical greenhouse. The diamond growing process begins with diamond seeds (which are also diamonds grown from carbon) being placed inside a growth chamber. In this growth chamber, which is also known as the Diamond Greenhouse, a carbon-rich diamond-growing environment is conditioned and maintained for about 12-14 weeks. At the end of this period, diamond seeds have undergone natural crystallization — just as they do below the earth without any human intervention, resulting in a rough Type IIa diamond.
Niraj Johri - Lab grown gemstones including lab grown diamonds are grown in a controlled setup mimicking the earth's natural environment where gemstones are made.
Nikolay Khikhinashvili –The market growth is mainly caused by the world’s economy and the wealth of people. People like to keep up with the technical progress and purchase all kind of high-tech products, including diamonds. Our target audiences are new jewellery companies, groups of independent designers, and young people from 25 to 40 years old that are involved in the high-tech industry and love contemporary things.
The market growth is also positively influenced by the possibility to certify the lab-grown diamonds. Almost all the reputable international gemological laboratories are certifying the lab-grown diamonds equally to all the other types of diamonds.
For the producer’s and consumer’s rights protections there is an association that was created with the participation of big manufacturers, store chains, stores, traders, buyers and other lab-grown market participants. The HPHT diamond manufacturers as well as CVD diamond manufacturers belong to this association.
Nitul Shah - Current and future market scenario for lab grown diamond will grow multi-fold, we see a new age citizen opting for green diamonds rather than mined diamonds because you get a diamond with same quality as a mined diamond at a much affordable price. Our motive is that the diamonds are for everyone, considering the price point.
Ashish Jain - The lab grown market is constantly growing. The industry must realise that the consumer of today is very smart and can get the knowledge at the press of a button. The consumer is becoming more and more conscious of the need to buy an ethical and sustainable product. Lab grown diamonds ensure this with also giving a great value and intrinsically like a purer diamond.
Leading consultancy, Frost & Sullivan had published a report titled, Grown Diamonds – Unlocking Future of Diamond Industry by 2050, which pegged the global mined-diamond supply to plunge to 13 million carats by 2050, from a projected 133 million carats in 2014. It also predicted a steady increase in demand was likely to lead to a shortage of about 248 million carats of diamonds by 2050. The report estimated the scale of lab grown diamond output at about 360,000 carats in 2014. The report pegged the production of lab grown diamonds to reach almost 2 million carats by 2018 and more than 20 million carats by 2026.
At a time, when the Earth-Mined Diamond supply is consistently depleting every year, the emergence of Lab Grown Diamonds is a security blanket to the industry. We have already and continue to expand the offering that the retailer has and will give them a profitable diamond offering that matches consumer preferences in the 21st century. The emotional connect with the consumer today is deeply rooted in the ability to be eco-conscious, conflict-free and sustainable. Our diamonds brings these inherent qualities to the consumer.
Niraj Johri - Lab grown gemstones are available in the market for past couple of years, however no one has channelized adequate amount of resources to project in the correct light, moreover lab grown draw strong criticism from the natural gemstone industry. What needs to be noted is that both lab grown gems and natural gems will grow in harmony and work at tandem. Lab grown gems give an affordable real looking choice to the customers. Growth runs parallel with information; majority of the Indian audience has never heard or seen lab grown gems.
CHALLENGES Nikolay Khikhinashvili –A young new business is always accompanied by different complications as it grows. For increasing the awareness, we provide full information on the lab-grown diamonds. Our main goal is to bring happiness and pleasure from purchasing the lab-grown diamonds.
These are the complications:
• The production of the lab grown diamonds is very time-consuming and knowledge-intensive and requires a lot of investment and input, which we hope will have a great pay off in the end.
• Lack of awareness in the potential buyers all around the world about the lab-grown diamonds
• Lack of competence of our colleagues in the jewellery business and incorrect interpretation of the information about the lab-grown diamonds caused by the lack of awareness.
Nitul Shah - Lab grown diamonds are getting popular day by day, every new product is a challenge to market but once customer is aware they shall definitely buy lab grown over mined diamonds. We are very strong on our marketing front be it social media campaign, e shots and brochure programs, we have got tremendous response for our lab grown diamonds.
Ashish Jain - The only challenge faced is the lies spread by the Earth Mined Industry. The biggest lie is calling Lab Grown Diamonds "Synthetic". The sooner the Earth Mined Industry comes up with a clarity that they will lose out to lies, the sooner they will be able to enjoy a consumer who is allowed to make a choice. - A Earth Mined Diamond or A Lab Grown Diamond.
• Lab Grown Diamonds are very new for the customers and thus education is going to be the key factor to make them aware about the unique benefits of these diamonds.
• Lab Grown diamonds offer the purity of spirit that comes with an eco-friendly, conflict free diamond. The retailer is able to ensure that every customer that walks in the door walks out with a diamond, either better in terms of quality or better in terms of size, in comparison to what they would have been able to buy otherwise.
Niraj Johri - The biggest factor in the blossoming of the lab grown market is consumers’ perception. People consider jewellery as investment which is seldom the case. A piece of jewellery or gem runs through various hands, and the price paid by the end consumer for a jewellery piece is often 50 percent hike than the original cost. So when some wants to sell it hypothetically, it fetches them at least 60 per cent less than the price they have paid for. When people wear jewellery as high end fashion, it is more likely the demand will increase.
Nikolay Khikhinashvili –We sell all our polished diamonds with the laser engraving of the IGI or GIA certificate number. We do our best to sell our product to the reputable companies, famous traders, that value their reputation as well as to serious jewellers and designers. We are very well informed how the sales process is going and have our own channels to follow it.
Nitul Shah - We sell lab grown diamonds official to all the customer, we mainly target end consumers like retail jewellers who are official producing jewellery made of lab grown diamonds. We also encourage all to sell lab grown as lab grown only.
Ashish Jain - Diamonds – mined or grown are identical and are pure carbons. The only difference is the point of origin but we strongly believe that it is very important for customers to be fully aware of the origin of their diamond. That is why certification and disclosure are a very important part of our brand and sales process.
We believe that the benefit of selling a Lab Grown Diamonds as lab grown is in its own merits. We also understand that these mixing stories are rumours mostly created by some industry players and producers. All diamonds sold by us are fully disclosed and we understand that our customers are doing likewise.
Niraj Johri - This is one of the principal problems of the industry, unfortunately you cannot keep a check on the pipeline. We however try and work with trusted traders of repute, but they cannot exercise control on their buyers who in turn might sell to some unscrupulous dealer. The profit margins are higher and hence they might swindle. A moral responsibility has to come from within.
FUTURE
Nikolay Khikhinashvili –We are hoping for a good balanced market of the lab-grown and the natural diamonds. The lab-grown diamonds need to be respected, because there is a lot of hard work, knowledge and passion invested in their production. This humanity accomplishment deserves respect.
Nitul Shah - We see multi-fold demand in future, lab grown diamond are the current and shall be the future.
Ashish Jain - There are challenges with every new entrant but through our awareness programmes, we have been able to establish an identity for ourselves in the marketplace and our partner retailers who in turn sell both mined and lab grown diamonds side by side. This immediately lowers perception barriers and with proper training, sales staffs are able to give a fair representation to the customer and let them choose between Lab Grown Diamonds and Earth-Mined Diamonds.
Lab grown diamond is the only security that the industry has. It is not going to disturb their present business as production is too small or negligible. It will increase in a way which will still not be able to make up for the drop in mining of earth mined diamonds. This will however be a deterrent to the producers who have been squeezing the industry. The industry will also have a happy consumer along with several suppliers allowing for fair competition at all levels.
At the end of the day, it’s all about choice and value. The consumer has access to a ton of information online or through their friends and family who are also connected to a digital information pool. This means that consumers can easily identify what they love in a lab grown diamond and now for the first time can buy lab grown diamonds.
The way we have witnessed customers accepting our diamonds, keeping up with demand will be the real challenge! We see a great FUTURE.
Niraj Johri - The future looks promising, someone has to step up the awareness and possibly a social figure or celebrity has to come out in support of lab grown gems, like how some celebrities are doing it in the West.
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