Lab-grown diamonds, jewellery created in a laboratory using advanced technologies, are attracting attention from South Korean consumers as the products are more sustainable and reasonably priced compared to natural diamonds, which are often criticised for air pollution and labour exploitation.
The Grace London, a lab-created jewellery brand of Korea’s E-Land Group, saw 100 million won ($75,201) worth of its synthetic diamonds sell out in two hours at an invitation-only event for VIP customers of Lotte department store in Dongtan, about 40 kilometres south of Seoul, in the last week of August.
It is the first time that a jewellery VIP event at Korea’s three major department stores, Lotte, Hyundai and Shinsegae, has generated more than 100 million won in sales in such a short time, according to the brand.
Lloyd, E-Land’s affordable jewellery brand, launched a one-carat lab-grown diamond ring priced at 1 million won last month. The brand sold 1,000 items within three weeks of the launch, thanks to the price being less than one-fifth of the average price of a natural diamond ring in Korea.
Korea became the eighth country in the world to begin lab-created diamond production this year, when local company KDT Diamond succeeded in synthesising the gem materials. The world leaders in lab-created diamond production include India, China and the USA.
MARKET SHARE GROWTH
Laboratory-created diamonds can be produced by two processes: high pressure/high temperature (HPHT) and chemical vapour deposition (CVD). In the former, a diamond seed containing carbon atoms is heated to 1,300-1,600 degrees Celsius at extremely high pressure to grow. The latter process is carried out in a vacuum chamber where natural gases such as hydrogen and methane are pumped in and broken down into carbon atoms, which accumulate on the crystal to form a diamond.
Artificially created jewellery typically costs 20% of its natural counterpart thanks to mass production – a tiny crystal mixture can be grown into a one-carat diamond in a matter of weeks.
According to India-based research firm Astute Analytica, the global market for lab-grown diamonds is growing, driven primarily by younger consumers who prioritise sustainability and ethical sourcing. It forecasts that the market will grow from $20.9 billion in 2022 to $52.5 billion by 2031, at a compound annual growth rate of 10.8%.
After a sluggish start in 2016-2018, the market share of lab-grown diamonds has been steadily growing, according to Edahn Golan Diamond Research & Data. It stood at 3% of total diamond sales at US specialty jewellers, rising to 5% in 2021 and exceeding 7% in June 2022, the research firm said.
LUXURY BRANDS EYE SYNTHETIC GEMS
There are around 30 lab-grown diamond manufacturers worldwide, disrupting the entire diamond market. As synthetic diamonds grow in popularity, global luxury brands are eyeing the launch of such jewellery products.
Diamond mining giant De Beers Group launched its synthetic diamond brand, Lightbox, in 2018. Its one-carat lab-created diamond cost around $4,200 at the time, while an equivalent natural gem sold for $6,000. Handcrafted accessories brand Pandora announced it would stop selling mined gemstones in 2021, and launched its lab-grown jewellery brand Pandora Brilliance the same year.
Breitling introduced lab-grown diamonds in its new Super Chronomat Origins last year, and the Swiss luxury watchmaker said it would phase out mined gemstones by the end of 2024. Rival TAG Heuer also used lab-created diamonds in its new Carrera Plasma Plasma, launched earlier this year.
Louis Vuitton Moët Hennessy (LVMH) invested $90 million in Israeli lab-grown diamond startup Lusix in July last year, as the French luxury fashion group sees huge potential in the synthetic gemstone market.
Despite the growth of the lab-created gem market, there will be a steady demand from high-end customers for mined diamonds, said Ohn Hyun-sung, director of the Wolgok Jewellery Foundation Research Center.
“As lab-created diamonds increase their share in the mass market, more consumers will find such gems affordable and the overall diamond market will expand. However, there are still many consumers who seek natural stones for luxury fashion brands, so we expect the demand for traditional high-end jewellery to continue,” Ohn said.
