Lab-grown diamonds have tremendous prospects, particularly when myths surrounding them are dispelled and chances of getting beautiful jewelleries are explained, says Lisa Mukhedkar, Founder and CEO, Aukera Jewellery.
“Once you are able to dispel some myths (of lab-grown diamonds), tell people that they are real, graded as diamonds and certified, they will be accepted. There is buyback of these diamonds and it’s unique in many ways from the jewellery that you have already been getting ,” she told businessline in an online interaction.
Lab-grown diamonds cost less, particularly when consumers look for larger stones. “We actually focus on the value and on more shapes which are totally unique. There is this whole design component in terms of how a diamond is designed and crafted. Yes, cost advantage is definitely part of buying,” she said.
In smaller diamonds, the cost difference is between 25 and 40 per cent. “As you go for larger diamonds, one carat could be priced 70-80 per cent lower,” said Mukhedkar, who launched Aukera Jewellery earlier this year.
In the case of two carats and more, the difference can be as high as 80-85 per cent. Lab-grown diamonds have disrupted the jewellery market and mined diamonds could see some shift in price, which lab-grown ones could reflect before an equilibrium sets in.
On the buyback arrangements offered for lab-grown diamonds, she said in the case of gold and diamond, it is 100 per cent of prevailing market value for upgrades to a larger piece. But if it is just a buyback, then a consumer gets 100 per cent of the gold’s value and 80 per cent of the diamond’s prevailing market value. “This is pretty much the same the industry has on mined diamonds,” said Mukhedkar, who promoted her brand through pop-ups that helped her launch within 3-4 months.
Gains momentum in US
Lab-grown diamond is “a genius product at a genius price”, she said, adding that consumers could get stones of their liking, including sizes.
Mukhedkar, who worked with Platinum Guild UK during 1980-2005 and launched platinum jewellery in India, said lab-grown diamonds have gained momentum in the US.
“The US is the world’s largest diamond jewellery market and has just taken off in the last four years (in lab-grown diamonds). It has grown 10 times,” the Aukera Jewellery founder said.
Looking at the response for lab-grown diamonds, Mukhedkar said she did not expect a segment of customers to come in so early. “We have the 20 somethings coming in here for engagement and wedding rings. They all want a more sustainable choice. The price value actually plays a factor,” she said.
About lab-grown diamond
Since such purchases are “emotional”, they “settle for a value in their heads” but some of the demand is driven by designs. “There are multiple reasons for consumers buying the lab-grown diamond and concerns over blood diamond (mined in African regions witnessing violence) are also helping,” the Aukera Jewellery founder said.
Lab-grown diamond is a mined diamond seed, which is put in a reactor. “You then mimic the temperature and pressure that is felt in the Earth’s core. And then you grow the diamond,” she said. This results in deriving a rough diamond, which is then cut and polished. The lab-grown diamonds are produced in Surat. “The only important thing is the seed. After that, everything else is done in India,” said Mukhedkar.
This means, jewellers can offer the product at fair prices with no import involved and the diamond moving from Surat to a factory in Mumbai for making jewellery. From there, it goes to other parts of the country.
The lab-grown diamonds have been existing for many years now and they are not new. “It was discovered 50 years ago and was kept under wraps until 2018, when the US Federal Trade Commission said they are diamonds. That’s when the market took off in the US,” she said.
One of the advantages of lab-grown diamonds is that they have opened a whole new world by way of designs. “It’s not that they didn’t exist earlier, but were inaccessible. Now shapes have become accessible and, therefore, the opportunity to design more unique pieces,” said Mukhedkar.
Over the next three years, the lab-grown diamond jewellery could grow five times even as the diamond jewellery market growth trebles. “In the US, the growth of lab-grown diamonds went up 10 times in four years,” she said.
Bridal segment’s response
In the $80-billion jewellery market, diamonds share is 10 per cent. So, there is enormous scope for lab-diamond since 90 per cent of the consumers are still buying only gold jewellery, said Mukhedkar.
Responses to the diamonds in Tier-II markets are good since women in the smaller cities are equally exposed to the developments and their buying capacity is equal to city women. “We did a couple of trunk shows (where literally a trunk of jewellery is taken) in Mysuru, Chikkamagaluru and Kodagu. The responses were extremely gratifying,” she said.
One of the areas where the response to such diamonds has exceeded expectations is the bridal segment. “The engagement and wedding rings have been a fantastic surprise to us since we did not expect this so early. There are also different segments such as gold only buyers coming in,” said Mukhedkar.
The additional money available with the middle class is also aiding the growth of such diamonds, while a change in women’s attitude to have jewellery to enjoy themselves rather than put it in a locker is also helping, she said.
Though lab-grown diamonds could put pressure on mined diamonds, there is “enough and more” for both to co-exist.
On the export prospects, Mukhedkar said the US purchases 50 per cent of the diamond jewellery, while Surat produced 9 of the 10 diamonds made in the world. “So, there is no doubt that exports will grow. To what extent, I am not sure. But the Government is providing all-out support. There is growth in the Gulf too but it is nowhere in comparison to the US,” she said.
Lauding the Centre’s move in lowering duty on diamond seed, Mukhedkar said it has suddenly brought visibility for lab-grown diamonds. Prime Minister Narendra Modi gifting Jill, wife of US President Joe Biden, such a diamond had a tremendous impact.
However, such a sector would need uninterrupted power to grow diamonds, though the sector is trying to tap solar power with the Centre’s support.
Mukhedkar said Aukera Jewellery prides itself on its design. “That’s something that’s very core to the brand. It’s something that we believe is a distinctive factor that we have when we look around at other jewellery brands per se. It is just the way we have curated our design collection. We are going to move to the next stage of design,” she said.