Lab Grown Diamonds vs Natural Diamonds

Apr 12, 2023

Diamonds are one of the most coveted gemstones in the world, and whether you’re looking at natural or lab-grown diamonds, the grading process is an essential part of the diamond industry. Here are some key points to keep in mind when it comes to grading lab-grown diamonds versus natural diamonds.

Diamond Grading Process

The grading process for lab-grown diamonds and natural diamonds is essentially the same.

You need to look beyond The 4 Cs – carat weight, color, clarity, and cut. These are no longer the parameters of diamond evaluation and pricing. J K Diamonds Institute has developed 7Cs and 7S’ to provide a comprehensive understanding of the diamond evaluation process and how it affects pricing. This concept works for both, Natural diamonds as well as lab-grown diamonds.

Gemologists may need to use different grading techniques or equipment to assess lab accurately-grown diamonds because they can be created in a variety of ways.

Differences in Diamond Grading

Lab-grown diamonds may have different inclusions and growth patterns than natural diamonds because they can be created using different growth techniques and starting materials.

Some grading labs are using the same grading scales of evaluation for both natural and lab-grown diamonds.

Certain factors such as fluorescence affect natural diamond prices more than it would affect lab grown diamond prices.

Benefits of Lab-Grown Diamonds

Lab-grown diamonds are often less expensive than natural diamonds because they can be produced in a controlled environment and don’t require mining.

Lab-grown diamonds have the potential to be an eco-friendly alternative to natural diamonds because they can have a smaller environmental footprint in future.

Drawbacks of Lab-Grown Diamonds

Some people view lab-grown diamonds as less valuable or desirable than natural diamonds because they are not rare or naturally occurring.

The long-term value of lab-grown diamonds is still unknown because they are a relatively new product on the market. Over the last 10 years, the prices of lab grown diamonds have been consistently falling and has become one-tenth of its natural diamond counterpart in solitaire category diamonds.

Let’s dig a little deeper shall we?

About the Natural Diamond Market:

Natural diamonds are formed deep within the Earth over millions of years and are known for their rarity, beauty, and durability.

The natural diamond market is driven by demand from the jewelry industry and consumers who value the symbolism and emotional significance associated with natural diamonds.

The majority of natural diamonds are mined in countries such as Russia, Botswana, Canada, and Australia, and the diamond mining industry is heavily regulated due to concerns over human rights violations and environmental impacts

New Market of Lab-Grown Diamonds:

Lab-grown diamonds are produced in a laboratory setting using advanced technology that simulates the conditions that create natural diamonds.

LGD can be produced in a matter of weeks or months, as opposed to millions of years, and is chemically, physically, and optically identical to natural diamonds.

The LGD market is still in its early stages, but it is growing rapidly, with some estimates suggesting that it could account for up to 10% of the diamond market by 2030.

Price Difference:

The prices of natural diamonds have historically been high due to their rarity and the cost of mining, processing, and marketing them.

However, the prices of LGD have been falling as technology improves and production capacity increases, making them more affordable for consumers.

Some estimates suggest that LGD can be up to 70% cheaper than natural diamonds of comparable quality.

Target Market:

Natural diamonds have traditionally catered to the top end of the income level, with consumers willing to pay a premium for their rarity and symbolism.

However, LGD has the potential to be a mass-market product, as it can be produced at a lower cost and marketed as an eco-friendly alternative.

LGD can appeal to younger consumers who value sustainability and transparency in the products they buy.

Environmental Impact:

LGD has the potential to be more environmentally friendly than natural diamonds, as it eliminates the need for diamond mining and the associated impacts on the environment.

However, currently, LGD production is often powered by fossil fuels such as coal, which can result in significant greenhouse gas emissions and environmental impacts. A concept of greenwashing is attributed to lab grown diamond marketers as they claim to be environmentally friendly without substantiating the facts.

As technology improves, it is expected that LGD production will become more sustainable and environmentally less hazardous.

Opportunity for the G&J Industry:

LGD represents a new opportunity for the G&J industry to diversify their business and increase the market size.

However, most businesses will need to create separate distinct entities for their natural diamond business and LGD business to avoid confusion in the minds of consumers.

The G&J industry can use LGD as a way to reach new customers and appeal to changing consumer preferences for sustainability and transparency.

There is huge potential in the business of LGD as well as LGD studded jewelry. The potential mark ups are high and the market awareness is low. Many new brands have started scaling up their operations on seeing this huge potential. However, brand positioning will matter the most to create a distinct identity to leverage this new potential in the industry.

Knowledge of diamonds and the diamond industry is of paramount importance before diving into the lab grown diamond business. Practical learning about grading, identification and valuation of natural and lab grown diamonds can be undertaken at J K Diamonds Institute of Gems & Jewelry. The Institute has been pioneering and revolutionising gems and jewelry education for more than three decades.

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