【Dubai, UAE】Consumers in Dubai Buy Lab-Grown Diamonds as Prices Fall

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Editor’s Note

The lab-grown diamond market is entering a new phase as initial excitement gives way to price normalization. This article examines the shifting dynamics, where consumer acceptance is now paired with significant margin pressure across the supply chain.

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Consumers Embrace Lab-Grown Diamonds

Consumers have accepted lab-grown diamonds (LGD) as a jewelry product. The initial euphoria has faded, leading to a sharp drop in lab-grown diamond prices last year, according to industry executives at a conference in Dubai on Monday.

“We are seeing prices and margins erode at the wholesale level. We see some retailers offering large discounts. This is an early-stage industry, therefore, business models can evolve and the entire chain can be reshaped,”

Anish Aggarwal, co-founder and partner of Gemdax, said that LGDs are no longer unproven products, so consumers have adopted them. He made these remarks during the inaugural edition of the Lab-Grown Diamond Symposium organized by the Dubai Multi Commodities Centre (DMCC).

According to the Khaleej Times, dozens of growers, wholesalers, retailers, and other LGD industry players from the UAE, the Middle East, India, China, the United States, and Europe participated in the conference.

Although this product only accounts for 2% of the total diamond industry, the popularity of lab-grown diamonds has been increasing, and India has become an important player in this field. Recently, Indian Prime Minister Narendra Modi gifted US President Joe Biden and First Lady Jill Biden a 7.5-carat lab-grown diamond during his visit to the United States.

“The boom of LGD in recent years has been truly remarkable. In 2022, the UAE recorded imports and exports worth over $1.5 billion, a 126% increase from the previous year. We expect this growth to continue as LGD trade consolidates.”

Ahmed bin Sulayem, Executive Chairman and CEO of DMCC, stated that the global demand for LGD has increased rapidly, driving consumer interest and disrupting traditional models. He added that one of the main reasons for the high demand is their price, which makes them accessible to a larger consumer base.

Price Drop

Toby Cruse, General Manager of Rough Diamonds at Diamond Foundry, argued that LGD prices have been reduced to one-fifth in four years. Other industry executives claim that prices have fallen by almost half.

“The market is not stabilizing, and jewelers and retailers are in a dilemma: if we maintain inventory, if we buy a lab-grown diamond, manufacture jewelry, and sell it to retailers. The entire supply chain is disrupted. This is the main problem we faced last year.”

While speaking during a panel discussion, Snehal Patel, CEO of Bhanderi Lab Grown Diamonds, revealed that the drop in diamond prices is a major obstacle for manufacturers in the past year.

“Technology has caused a disruption in the diamond jewelry industry, so we also face the challenge of falling prices… We did not do good marketing and the industry cannot handle enormous production.”

Liang Weizhang, Chief Strategy Advisor of Crysdiam Technology Co., blamed the inadequate market and huge production for the price drop last year.

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⏰ Published on: July 10, 2023