Synthetic diamonds – what’s at stake?

What share of the market is taken up by synthetic diamonds? Will they become popular in the future? What are the challenges facing the natural diamond sector?

What share of the market is taken up by synthetic diamonds? Will they become popular in the future? What are the challenges facing the natural diamond sector? Let’s review the situation with a few figures.

A rapidly growing market?
According to figures published by Francéclat, the market share of synthetic diamonds represented 6% of the sales of 0.30 to 1.50 carat solitaire diamonds (and 0.5% of all sizes combined) in the 4th quarter of 2018. It is certainly not an insignificant amount, and will undoubtedly gain more importance. In the United States, synthetic diamonds, which have already been around for several years, seem to be slowly taking their position. For example, the Lightbox brand (De Beers) is currently building a new centre in Oregon which will produce 200,000 cut carats when running at full capacity, compared with 20,000 today. During the last JCK show in Las Vegas, the area dedicated to synthetic diamonds which hosted 29 exhibitors spread across 600 m2 saw its number of visitors explode (+ 40%). However the market is still relatively small. Its global worth amounts to around 500 million Dollars, compared with the 20 billion Dollars generated by natural cut diamonds.

India and China – the main production centres
Annual global production of synthetic diamonds is approximately 3 to 5 million rough cuts, compared to 140 million rough natural cuts. China and India are by far the biggest producers. China produces approximately 12 billion carats each year for industrial applications in the abrasion sector, and will inevitably at some point look to move upmarket and enter into the jewellery sector. India is home to a rapidly increasing number of synthetic diamond producers who have access to the largest diamond cutting centre in the world. Another significant competitive advantage they have are their energy subsidies. Electricity costs represent the biggest overheads for producers.

Downward pressure on prices – is this good or bad news?
As production capacities multiply, and as new brands and technological advances continue to appear in diamond manufacturing, downward pressure is likely to be strong. Lightbox’s price per carat comes in at $800, but diamond dealers estimate that the price could eventually drop to $200 or even $100. Good news for customers of course, but not for synthetic brands. On the American market, the sale prices of these diamonds have already lost 60% in one year. Despite everything, sales have been weak. For the record, synthetic rubies, emeralds and sapphires are purchased at 10% of the price of natural stones. It is true that the manufacturers of these stones have never attempted to make a name for themselves in jewellery as is currently the case for diamonds today.

The major challenge – confusion
The most acute problem facing the diamond industry revolves around the confusion over what’s synthetic and what’s natural. Gemological laboratories are seeing more and more synthetic stones handed to them for inspection (this excludes mixed stones, which are analyzed upstream by detection machines). Aurélien Delaunay, director of the French Gemmological Laboratory (LFG), has noticed constant progress in terms of dimensions, purity, and colour, but affirms that differences can always be spotted. The issue is more complicated for coloured diamonds, which are processed after synthesis, which makes them less immediately identifiable. But for the LFG director, the main preoccupation concerns mixed stones, which are often polluted by synthetic ones. Detection devices are constantly improving to catch them.

The risk of damaged confidence
The sector is taking action in response to this ongoing challenge. The ASSURE program is an effective tool of the Diamond Producers Association (DPA) which tests the most efficient detection devices on the market (see our article in the September 2019 issue and their website Despite everything, fraud detection comes at a cost. Some traders are either hesitant about investing, have stopped having the stones analyzed or limit themselves to taking samples. The stakes are enormous. This unchecked phenomenon of mixing and blending could wreak great havoc in the industry, and loss of customer confidence would be inevitable.

The French project
Alix Gicquel is a researcher and founder of Diam Concept, the leading manufacturer of synthetic diamonds in France. Its laboratory, a partner of the CNRS is developing a project with Air Liquide consisting of around twenty reactors which will enable the lab to produce 10,000 carats per year within 4-5 years. She has already received many requests. Her goal is to constantly improve the quality of the stones and she works particularly on her coloured diamonds to achieve the “perfect shade”. She is convinced that the big name jewellers will adopt synthetic products sooner or later “when they can no longer find what they are looking for on the market” (i.e. exceptionally beautiful stones or large sizes). Right now, “they are not quite ready”.

A different marketing strategy
Alix Gicquel would also like us to move away from the “war” of ethics, which, according to her, has no value or interest in the long term. The attack however came from her own camp. Natural diamond producers have responded by pointing to the catastrophic carbon footprint of laboratory produced diamonds. They also highlighted the Kimberley Process and the positive socio-economic impact of the mine’s activities on local populations (see our November issue of  The ethics of natural diamonds ). But instead of getting wrapped up in these battles of numbers, isn’t it better to think about creating a new model?

Brands using synthetic diamonds still lack a long-term vision and a certain type of creativity that sets them apart from others. Winning and above all building customer loyalty requires real marketing positioning. For example, eco-friendly fashion and beauty brands understood this very early on. Instead of restricting themselves to ecological aspects, they focus their communication on creativity and work hard on keeping their brands desirable. The natural diamond industry is working to breathe new life into a vision built on rarity and emotion, both of which have always been its founding pillars. Don’t synthetic diamonds suffer from a certain lack of ‘dreaming big’, which is surely the very definition of luxury?

The arrival of synthetic diamonds opens up a new market that will undoubtedly find its place in the world of jewellery. The figures have not lived up to the tidal wave originally predicted, but those in the natural jewellery sector are already anticipating how they will respond regarding the authentic, rare and precious nature of their stones. Marking, traceability, and ethics will no doubt enter into the debate, which we hope will not distance customers from the world of emotions associated with this sublime stone of all stones – the diamond.

Isabelle Hossenlopp


Homepage picture © Diamconcept

Link to the original article published in the L’officiel horlogerie et bijouterie magazine, January 2020

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