HOW LAB GROWN CVD DIAMONDS CAN BE INDIA’s ACE CARD IN GLOBAL GEMS & JEWELLERY INDUSTRY
In times when the global diamond industry had been challenged with declining natural diamond prices driven by decreased global consumption, geopolitical tensions, reduced financial aid from banking institutions, demonetisation struggles in India and a collective scale-back of production by the miners worldwide, lab grown diamonds have seem to emerge slowly as a ray of hope and establish a growing footprint in the gems and jewellery industry.
2019, particularly, was the year for lab-grown diamonds. India, alone, witnessed a sharp rise in LGD exports worth $443 million which were up by 102% y/y. Even at the start of 2020, lab-grown diamond exports in India were up by 60% y/y, while natural diamond exports were down by 41% y/y.
Whilst the lab-grown diamond industry had seen a significant price correction in recent years with the technology evolving and the cost of technology coming down, lab-grown diamond prices, particularly CVD diamonds, have now stabilized. In fact, CVD diamonds above 1ct saw a 29% price rise in the last quarter of 2019 driven by significant demand and limited supply.
Globally, estimated at INR 13,300 Cr currently, the lab-grown diamond jewellery market is expected to rapidly rise to INR 36,000 Cr by 2023 and exceed INR 1,00,000 Cr by 2035, says a recent report by renowned analyst, Paul Zimnisky.
These hefty numbers are not just what adds on to the prospect of diamonds created using the CVD technology, the major shift in consumer consumption patterns is a great contributor to the rise in demand for lab grown CVD diamonds.
Millennials and Gen Z as purchasers of luxury including diamonds, are steering away from natural diamonds because of their higher environment and social costs and increasingly leaning towards sustainable luxury. As a result, consumers are now exploring real diamonds that are grown in laboratories as the new alternative for engagement rings as well everyday luxury wear as it comes with the added benefit of being ethical, affordable, sustainable and more environment-friendly product.With the largest population of Millennials in the world, India is perceived to become the largest market for lab grown diamonds in the future.
India remains critical to the growth of the lab grown CVD industry
A known fact is that India and China are currently the world’s largest exporters of lab grown diamonds and that India is also one of the strongest players producing or growing the lab grown diamonds.
India particularly specialises in the CVD technology that exactly replicates the environment below the surface, above in a reactor and produces lab grown CVD diamonds – certified as the purest type of diamonds (Type IIa).
On the other hand, China produces lab grown HPHT diamonds that are created using graphite and a molten metal influx not resulting in the purest type of diamonds (NOT CLASSIFIED as Type IIa).
What is interesting to know is that in the current lab grown polished diamond production of 2 million carats, over 90% of it is under 0.18cts, majority of which are Chinese diamonds.
Whilst, so far China has progressed with significant rise in volumes of star melee diamonds, bulk production of higher quality and bigger solitaires (0.30cts and above) with the HPHT technology still remains a challenge.
India, whilst may not have achieved the same volumes yet, with its homegrown scalable CVD technology has certainly surpassed China in terms of producing superior quality (Type IIa) and bigger solitaires.
As the economy slowly opens post lockdown, the implementation of several financial measures adopted by the Indian government and the RBI to boost lending and increase liquidity is likely to revive the economy faster than anticipated. In such times of recovery, industries that focus on the domestic market and homegrown “MakeInIndia” products are likely to have a speedy recovery compared to industries that have dependency on foreign markets.
“Given the scalable production of lab grown CVD diamonds occurring in India, a robust strategy with a visionary approach and government assistance in place can help India make bigger strides in offering this choice to consumers domestically but also capture a bigger share of the world market for lab grown diamonds. With domestic production, cutting, polishing and manufacturing of CVD diamonds and our existing abilities of domestically designing and crafting to the sensibilities of the overseas market, the country is poised to capture the opportunity locally as well as be the biggest foreign exchange earner going forward.” – says Pooja Sheth, MD & Founder of Limelight Diamonds, the first luxury brand in India offering lab grown CVD diamond jewellery
5 reasons why CVD diamonds can be INDIA’s golden opportunity for revival post crisis
1. Opening up a new segment of AFFORDABLE LUXURY
Majority of the polished natural diamonds are currently consumed by US and China, as per the latest DeBeers Diamond Insight Report, 2019. India only consumes 5% of the polished natural diamonds. This is largely a reflection of majority of the Indian population not being able to afford natural diamonds.
Lab grown CVD diamonds, with its affordable price points, is an opportunity for every jewellery retailer to offer a new choice to consumers who have always aspired to purchase a diamond.
Source: De Beers Diamond Insight Report, 2019
2. Increasing ACCEPTANCE of lab grown CVD diamonds in India
Indian consumers have begun embracing lab grown diamond jewellery mainly due to the wide education drive on the creation process conducted by several brands in the country. This has helped consumers understand that these diamonds are as REAL as natural diamonds and originate from a natural diamond itself – similar to the concept of IVF technology / test tube babies.
Along with that, the recent campaign conducted by Limelight Diamonds with support from the Royal Families of India who have been prime custodians of some of the most precious diamonds in the world, and their encouragement for technology and its ability to produce the purest Type IIa diamonds through the CVD process yet saving the planet, helped the consumers understand that these are not low in quality but the purest type of diamonds – maintaining the aspiration behind the purchase just like any other precious gemstone.
Source: Limelight Handcrafted Diamonds
Moreover, the millennials and Gen Z of the country have shown even stronger support for these diamonds because of their ethical, social and environmental benefits as there is no mining involved.
However, a lot more education is still required to the trade and the consumers to infuse the confidence of establishing this as a distinct product category by the trade and a distinct product offering/choice to the consumers.
3. Indian MILLENNIAL – the diamond jewellery CUSTOMER for next 15-20 years
410 million millennials. The largest millennial population in the world.
An opportunity that cannot be missed.
Millennials, those roughly born between 1980s – 2000’s, and the target audience of every growing industry, are increasingly leaning towards spending less on high value luxury items and more willing to spend on experiences. Whilst post Covid era will see some short term shift in spending from travel and food into more luxury purchase, the millennial is likely to remain more price conscious and will only PURCHASE WITH A PURPOSE.
On taking a look at their purchasing preferences, a recent Deloitte report on Millennials in India states that climate change & environment has become the no.1 priority or concern for them. Statistics also state that 44% of these millennials are willing to a pay a premium on sustainable products/ materials. 70% of a survey in US, conducted by MVI Marketing, said the millennials would consider buying a lab grown diamond engagement ring as it provides a bigger stone for the same money and they would like to save money on an engagement ring.
“Among consumers in general, and millennials most specifically, mined-diamonds have a bad reputation for the high human cost and environmental damage that mining operations entail. This generation is fixated on responsible sourcing and manufacturing of the products they buy. Lab-grown diamonds meet that demand, while mined-diamonds fall short.” – Forbes.com
4. Increasing consumer acceptance for SUSTAINABLE PRODUCTS, especially post Covid-19
Coronavirus: Nature is sending us a message, says UN environment chief…
“To prevent further outbreaks, the expert said, both global heating and the destruction of the natural world for farming, mining and housing have to end, as both drive wildlife into contact with people.”- Inger Andersen, UN Environment Chief
This message has resonated strongly with consumers and the post-Covid era is likely to see a strong shift in the behaviour, attitudes and purchasing patterns of consumers. Several studies and analysis, including the recent Bain & Co report suggests that consumers in response to the crisis will have an increased environmental and social consciousness and sustainable alternatives to conventional products will start having a preference.
CVD Diamonds are not just flawless but they do not bear the burden of mining and save 109 gallons of water and 1,750 tonnes of earth per carat. Land mass and water being the most precious and stretched resources today.
Source: Limelight Handcrafted Diamonds
Even pre-Covid era, with the rising consciousness amongst consumers for saving the environment, several sustainable alternatives have emerged across industries such as electric vehicles, recycled fashion, bamboo brushes and straws etc. However, all these products are yet to scale and currently remain more expensive that their conventional counterpart for the end customer.
Interestingly, the gems & jewellery industry is strongly placed with a sustainable product like the lab grown diamonds that are affordable relative to the natural diamonds.
“Women in today’s age make their own choices and decisions. They have their own independence not just in terms of profession but are now more empowered in their thoughts and opinions. This is very much starting to reflect in the trends in the fashion and jewellery industry where more women are opting for sustainable options – such as the lab grown CVD diamonds – that allow them to enjoy several luxuries without damaging the planet for the future generation. With women getting economically and socially independent they deserve to celebrate every little achievement and any big success with a girl’s best friend – a sustainable diamond.” – Pooja Sheth, MD & Founder of Limelight Handcrafted Diamonds.
5. Lab grown CVD diamonds are certified as the purest Type IIa diamonds
CVD diamonds are classified as the purest type of diamonds – Type IIa – by world’s leading diamond certifying organisations such as the SGL labs & IGI.
Source: Limelight Handcrafted Diamond Jewellery
Type IIa diamonds are devoid of any impurities and almost entirely composed of carbon. As a result, the brilliance, shine & lustre of a Type IIa diamond is significantly better than any other type of diamond. Any such diamond even with a natural origin has a mention of Type IIa on its certificate and is sold at a 5 – 15% premium in the market. But such diamonds are rare to find under the earth’s surface as 98% of natural diamonds have nitrogen impurities. Only 2% of all natural diamonds in the world have been classified as Type IIa.
The world-famous Koh-i-Noor, 105.6-carat, is a Type IIa diamond, found from the ancient Golconda mines (now between Telangana and Andhra Pradesh). Some of the most world famous Type IIa diamonds have emerged from the Golconda Kullur mines in India.
However, due to the rarity of Type IIa diamonds, most consumers do not have access to the purest diamonds. Through the CVD technology, and only through this technology, the Type IIa privilege can be brought at the hands of each consumer.
In addition, lab grown diamonds particularly CVD diamonds have resale value. Brands like Limelight Diamonds, offer its consumers buyback and 100% exchange opportunities.
“The beauty of technology is that it permits you to enjoy something you could never even dream of. Truly, an industry revolution, CVD diamonds turn dreams into reality by offering Type IIa diamonds that belong to the same league as the Koh-i-noor at the hand of every consumer. At the same time creating a new kind of heritage that can protect the legacy of the diamond yet preserve the planet for a brighter future for all.” – Pooja Sheth, MD & Founder of Limelight Handcrafted Diamonds.
“India was ONCE one of the largest minesfor Type IIa diamonds and India now ONCE AGAIN stands the chance to be the largest mine for Type IIa diamonds through the CVD technology.”