Editor’s Note
The diamond industry, long synonymous with luxury and enduring value, faces a period of profound uncertainty. As iconic brands like De Beers encounter significant challenges, we examine the shifting foundations of this glittering trade.
Praised by Marilyn Monroe and Rihanna, coveted by Audrey Hepburn in the film “Breakfast at Tiffany’s,” and shining in the windows of Place Vendôme, the diamond has established itself as a timeless symbol of beauty and rarity. Yet, the industry is currently going through a difficult period. The latest example is the troubles of the world’s number one, De Beers, to the point that its main shareholder, the mining producer Anglo American, is considering divesting. With rough diamond production falling by 22% in 2024, the prosperous days of this company founded in 1888 now seem distant.
The entire value chain is being disrupted: according to Rapaport, a specialized analysis firm, Botswana, whose economy is highly dependent on it, saw its rough diamond exports drop by 46% between 2022 and 2024. In India, factories in the city of Surat – a hub for processing the precious stone – have had to close due to lack of demand. Overall, last year, the country exported half as many polished diamonds as in 2022.
The causes of this downturn are multiple. After a temporary rebound, the economic slowdown in China, a traditionally strong market, has contributed to the collapse in prices since the end of the health crisis – a phenomenon that also affects the entire luxury sector. This loss of appeal has benefited gold.
Supply, on the other hand, has remained abundant. To prevent prices from collapsing further, De Beers has built up stocks, which have reached their highest level since 2008, according to the Financial Times.
In the public imagination, the precious stone is also losing its luster. Diamonds are no longer “a girl’s best friend”…
In the United States, its primary market, the diamond industry must contend with new practices among consumers aged 25 to 35.
Produced in laboratories, while their natural equivalent forms over millions of years underground, these substitutes are a real thorn in the side for the natural diamond industry. They first attract with their attractive selling price, about 85% cheaper than diamonds extracted from mines, according to Edahn Golan. To the point that synthetic diamonds are set in nearly half of the engagement rings sold in the United States. Globally, their market share was close to 20% in 2024, according to McKinsey & Company. Traditional players are not about to regain this lost ground, judges Yoram Finkelstein, head of GemConcepts, a diamond cutting company based in Israel.
With identical aesthetics and physical properties, synthetic diamonds have, in principle, nothing to envy about their deep-earth counterparts. But at the Natural Diamond Council (NDC), they refuse to put them on an equal footing.
And yet, among jewelers, adherents are increasingly numerous. The reason is that the gross margin is around 70% for lab-grown products, twice that of mined diamonds, calculates Edahn Golan. The Danish giant Pandora began using the former in 2021, ceasing at the same time to use the latter.
The brand also touts the carbon footprint of its synthetic rivals, 95% lower. A major asset in the eyes of some young consumers.
To counter this competition, diamond dealers are mobilizing. Like with this verification machine to distinguish the two types of stones, unveiled by De Beers, which will be available in stores. At the same time, marketing campaigns are multiplying, emphasizing a “natural treasure” dating back millennia, versus a lab-grown stone described as artificial. The quarrel even extends to semantics. In France, a decree has ruled: it is impossible to use the term “laboratory diamond” for a product at least partially manufactured by humans. Only the designations “synthetic” or “synthetic diamond” are authorized.