New Delhi: The recent decision by De Beers, world leaders in diamonds, to launch its Lightbox lab-grown diamond line, triggered instant shocks in Surat, the world’s largest diamond cutting and polishing centre for natural diamonds. Many were worried, trying hard to figure what it meant. At the the annual global diamond meet early this month at Las Vegas, a producer described the shock in India as “Richter scale 9.”
Lightbox general manager Steve Coe issued a statement to calm the markets, arguing De Beers was trying to create a new market and not replace the old one. “We look at this as an additive, rather than a substitutive business,” said Lightbox general manager Steve Coe. What was surprising was that the De Beers executives at Las Vegas were quoted having described synthetic diamonds as “not rare,” “not precious,” and suitable for “emotionally shallower occasions.
But diamond cognoscenti across the world say Lightbox is a real business, De Beers is targeting the under-$500-1,000 price point market, the idea is to try to grab control. The $500-1,000 price market is the one De Beers wants to target because it is this very market that is bound to grow across Asia, especially China and India. Once De Beers was the biggest, stumbling block to the man-made market. Now, they are into it. Synthetic gemstones once triggered considerable debate in the diamond market across the world, especially at some of the Indian diamond merchants who were blamed for allegedly mixing lab-grown with mined diamonds.
Among them was Jatin Mehta, who still draws flak for not returning an estimated Rs 6000 plus crore to Indian banks, but was pilloried for launching lab-grown diamonds. There were heaps of taints. Some even blamed Mehta for mixing lab-grown diamonds with mined-diamonds. The charges against him were pushed allegedly by some Big Boys of the market. Mehta, who now stands clean because of recent judgements from a Belgian court trashing such claims, must be having a great laugh.
Now, just because De Beers is in the same market, lab-grown markets are considered a different market. Now, there is respect if one buys a man-made sapphire stackable ring for $60 at a top departmental store in London and no one will laugh at the seller, or the buyer.
But do man-made diamonds worry the natural business? It does because such diamonds are pitched as the same product, to the same customers, at comparable price points. Lightbox is seen as De Beers’ big buck effort to change that positioning, to place the lab-grown market in the same space occupied by created coloured stones and moissanite. The million-dollar question remains: Why did they cry wolf when Indians were trying hard to get into the man-made diamond markets?
If Lightbox works, it could hurt the market for cheaper fashion-oriented natural diamond jewellery and also raise the product’s profile and legitimise man-made gems.
India, one of the world’s fastest growing markets after the US and China, feels the introduction of branded, synthetic diamonds by De Beers will drive a clear differentiation and categorisation in the diamond product category amongst the consumers. The Mumbai-based Gems and Jewellery Export Promotion Council (GJEPC) has said the De Beers move will have no impact on the demand, appeal and value of natural diamonds. GJEPC said a natural diamond stands for most precious emotion, is a luxury product with timeless appeal.
GJEPC further stated that the synthetic or lab grown diamonds are not new with De Beers. This technology has existed with De Beers through their subsidiary ‘Element Six’. They have been conducting research and producing synthetic diamonds for the last 40 years.
“Synthetic diamonds have been around for a long time and they have had no impact on the industry. Presently, production of synthetics is estimated to be only 2% of natural diamonds,” says GJEPC regional director Dinesh Navadia.
But that number is growing, growing fast. If you have an option to impress with a cheap diamond that looks almost real, would you buy a Man-made stone?