The synthetic or lab grown diamond market size globally held an approximate value of nearly AUD 36.39 billion last year and the market was expected to grow to AUD 41.51 billion this year and to AUD 119.36 billion by the year 2032 (CAGR of 14 % for the forecast period). Statistics reveal that Asia Pacific which includes Australia dominates the synthetic diamond market with a market share of more than 33 % last year.
The primary driving factors behind the growth of the lab grown diamonds is multifactorial among which include changing consumer preference, lower cost, environmental impact, disposable income levels and satisfaction (bigger, better and more colourful stones with higher clarity than naturally mined diamonds at much lower cost).
Synthetic diamonds are basically man-made diamonds that possess the same chemical and atomic properties as natural diamonds. These diamonds are “grown” using diamond seeds that are subjected to either Chemical Vapour Disposition (CVD) or High-Pressure High Temperature (HPHT) processes. These processes are controlled meticulously to the extent that they are able to produce diamonds of exceptional quality.
The processes or rather methods used to create these diamonds mimic the forces deep below the Earth’s surface but are augmented which enable these diamonds to be created within 10 weeks, in contrast to natural diamonds which take millions and billions of years to form naturally. This is the primary reason as to why lab grown diamonds cost much less than natural diamonds as the cost of mining is high and mining is a capital-intensive industry.
Market Drivers for Synthetic Diamonds
Prior to the entry of lab grown diamonds into the sphere of the jewellery market, laboratory diamonds were mainly used for research, used as cutting tools and for even machinery components due to the lower quality of lab grown diamonds in its infancy.
However, advancement in technology in the past decade has enabled laboratories to create diamonds that supersede the quality of naturally mined stones which augmented the worldwide sales of diamonds significantly. The market slump that affected the lab grown diamond market in 2020 was directly attributed to the COVID-19 crisis which resulted in the temporary closure of laboratories and manufacturing plants, which caused a decline in the production of synthetic diamonds.
Apart from that, during the crisis disposable income levels dropped and this led to consumers shy away from non-essential products and services which included artificial diamonds. Another primary factor that has been driving the sales of artificial diamonds is the support rendered by countries for eco-friendly products as lab grown diamonds do not disrupt the environment whereas mining activities cause serious damage to eco-systems.
Deforestation, land erosion, air pollution, water pollution and carbon emission are just some of the negative aspects of mining that countries are trying to avoid.
It has come to pass that lab grown diamonds will eventually overtake the natural diamond market within the next decade based on the current escalating demand for lab grown diamond jewellery. Most retailers and diamond wholesalers or brokers have already begun to remodel their business strategies in preparation of what is over the horizon for the diamond industry.