【South Korea】[Yoon Sung-won’s Jewelry Insight] The Future of Lab-Grown Diamonds After De Beers’ Exit

In 2018, De Beers attempted to anchor lab-grown diamonds in the fashion jewelry segment with its Lightbox brand, priced at $800 per carat. The core objective was to protect the symbolism of natural diamonds, particularly in the bridal ring market. The outcome, however, diverged from expectations. Instead, the De Beers name inadvertently lent credibility to lab-grown diamonds, producing an effect opposite to the original strategy. Al Cook, CEO of De Beers, stated in the withdrawal announcement:

Intense price competition, a sharp decline in lab-grown diamond prices, and deteriorating profitability were cited as key reasons. The Lightbox production facility in Portland, Oregon, USA, will be converted into an industrial diamond production base. This signifies that while De Beers is withdrawing from the gem-quality lab-grown diamond market, it will seek new opportunities in the advanced industrial diamond market for electronics, automotive, and aerospace applications.

GIA’s decision reveals a more fundamental boundary. Starting in the latter half of 2025, lab-grown diamonds will be classified into only two grades, ‘Premium’ or ‘Standard,’ instead of the traditional 4C (Color, Clarity, Carat, Cut) grading. If the quality falls below the standard, no grade will be assigned at all. The fact that over 95% of lab-grown diamonds cluster within a very narrow range of color and clarity grades highlights that they are produced uniformly in a standardized environment. This move amounts to GIA’s official recognition of the fundamental difference between natural diamonds, formed over billions of years under varying conditions, and lab-grown diamonds, mass-produced in standardized processes. The institute judged that applying an intricate grading system akin to that for natural stones to a product lacking individuality and scarcity only adds to consumer confusion. GIA appears intent on firmly establishing separate domains for each market through clear segmentation.

The dynamics of the diamond market can no longer be explained by traditional values alone. Data reveals the direction in which young consumer choices are steering the market. According to Statista, lab-grown diamonds accounted for 14.3% of the global diamond market in 2023, with projections exceeding 21% by 2025. In the United States, they are spreading rapidly, particularly among younger demographics, with 52% of couples choosing lab-grown diamond engagement rings in 2024. Price competitiveness is also stark. Industry analysis indicates that, at comparable quality standards, they can be purchased for up to 80% less than natural diamonds, attracting cost-conscious consumers. Advancements in production technology have improved quality to a level where it is difficult to distinguish them from natural diamonds with the naked eye. Simultaneously, prices continue to fall due to a surge in supply driven by the large-scale entry of Chinese and Indian manufacturers. Thus, the price gap remains the most powerful factor in consumer choice. Some consumers also justify their choice with the premise of ethical consumption, citing the avoidance of environmental destruction from mining or conflict-zone issues. However, the production of lab-grown diamonds also consumes vast amounts of energy, and environmental benefits may be limited, especially in production sites reliant on fossil fuel-based electricity. While the expansion of online shopping has indeed accelerated the adoption of lab-grown diamonds, concerns persist regarding the loss of investment value and diminished scarcity due to the sharp price decline.

Lightbox’s seven-year journey is a textbook case demonstrating market dynamism. Even a global powerhouse with strong capital and technological prowess had to adjust its strategy in the face of consumer choice and market trends. The diamond market is now entering an era where consumer values and market logic play a more critical role than brand power alone. A key point to watch going forward is how the two markets will coexist through differentiation. It is anticipated that natural diamonds will further strengthen their symbolism for special moments like weddings and anniversaries, while lab-grown diamonds will expand their domain as affordable, everyday luxury. Choices have broadened, and the industry can now seek growth opportunities in these two distinct markets. Consumer-driven currents are reshaping the industry’s landscape—an outcome even De Beers could not have predicted seven years ago. The market always moves one step ahead of predictions.