【韩国】Natural Diamond Giant De Beers Cuts Product Prices by 10-15%

The phrase “A diamond is forever” comes from a De Beers advertising campaign decades ago. While diamonds may not change, the jewelry industry is undergoing a period of upheaval due to the emergence of sophisticated lab-grown products.

On the 2nd (local time), the economic newspaper Bloomberg reported that De Beers, the world’s largest natural diamond producer, has cut product prices by 10-15%. This is analyzed to be due to the popularity of lab-grown diamonds affecting the demand for natural diamonds. According to Bloomberg, this is a significant price cut.

However, it explained, “Given that polished diamond prices have recently stabilized and inventories at the retail and midstream levels have decreased, this will provide a foundation for improved balance and growth,” adding, “We are preparing to resume diamond polishing operations after India’s Diwali festival.”

However, a recent McKinsey report titled ‘The diamond industry is at an inflection point’ offered a more pessimistic assessment of the market.

The report explained that despite the resumption of engagements and marriages and the normalization of supply chains post-pandemic, diamond prices are falling.

Inflation is further boosting the popularity of lab-grown diamonds. People want to buy houses. Therefore, in a situation where home-buying ability is in crisis, trying to save for a down payment while simultaneously spending tens of thousands of dollars on a diamond may seem like an irrational choice.

This does not mean the era of natural diamonds is over. It’s just that people are opting for cheaper alternatives. It can be seen as similar to people eating more fast food during a recession. Moreover, there is little difference between natural and lab-grown diamonds.

McKinsey called lab-grown diamonds “the biggest challenge facing diamond producers today.” This is due to their ethical benefits, lower price, similarity to natural diamonds, and popularity, especially among younger generations in Western countries. McKinsey stated that the shift in demand to synthetic stones has contributed to the decline in natural diamond prices. According to one survey, a majority of Gen Z respondents said they prefer a 3-carat lab-grown diamond over a 1-carat natural mined diamond.

Ankur Daga, CEO of Angara, which sells lab-grown jewelry, said in a press release accompanying the survey results:

Daga added, “For decades, we have been conditioned to believe that De Beers and diamonds represent perfection and status. But today’s consumers and younger generations are challenging tradition and leaning towards more affordable options like lab-grown diamonds.”

He further predicted, “As Gen Z continues to influence consumption trends, lab-grown diamonds will become the new standard for affordable luxury and conscious consumption.”