Laboratory-grown diamonds are a key industry in Henan Province, China. According to Qichacha, Henan currently has 167 companies related to laboratory-grown diamonds, the most in China.

Price is a key factor disrupting the industry. In 2023, there were frequent reports of falling natural diamond prices, and laboratory-grown diamond prices were also falling in tandem.

"You don't know how crazy it was when laboratory-grown diamonds were in high demand," a laboratory-grown diamond wholesaler told NBD. "At that time, you could make a profit from every diamond you sold."

Many industry insiders recalled the high prices of laboratory-grown diamonds in the past: around 20,000 yuan for a 1-carat diamond in 2019. "Now, the wholesale profits for laboratory-grown diamonds are almost gone."

Qidun owns a diamond jewellery factory in Zhengzhou, where he processes rough diamonds into finished diamond rings. He has noticed that the laboratory-grown diamond market has suddenly heated up since the Spring Festival of 2023.

Qidun said, "In 2021, I only sold 2 laboratory-grown diamonds. Now, I can sell about 100 per month. Currently, 50% of my business is laboratory-grown diamonds."

"I think the market is hot because of the price. At that time, a 1-carat laboratory-grown diamond cost over 10,000 yuan, but now it only costs a few thousand yuan."

Huanghe Whirlwind, a representative company for the production of laboratory-grown diamonds, announced on January 12, 2024, that it expected to post a loss of 6.45 billion yuan in 2023, also due to the sharp decline in laboratory-grown diamond prices.

In fact, as laboratory-grown diamond prices fell, natural diamonds also felt a chill. On January 16, 2024, the Guangming Daily cited foreign media reports that De Beers had reduced prices by around 10% at its first auction of the year.

Even more noteworthy was the bankruptcy of the natural diamond brand I DO.

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At present, some natural diamond dealers are choosing to enter the laboratory-grown diamond sales sector.

Zhao Yuejin used to be a natural diamond dealer. When NBD met him, he was talking to a jewelry factory about the business of laboratory-grown diamonds. Zhao Yuejin was still proud of his previous natural diamond business. "We used to do natural diamonds, and we also did gold jewelry business. We had dozens of stores in Henan, and we were among the top in the province."

However, Zhao Yuejin continued, "the overall sales of diamonds have declined, and the business is difficult to maintain. I gradually closed all the stores, and now there are only a few stores that sell gold products."

Zhao Yuejin believes that the business of natural diamonds is very difficult at present. "The inventory is very high, and we are unwilling to lower prices. We can only step into a crisis. In my understanding, every natural diamond dealer has a large amount of inventory."

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Dong Qing believes that the e-commerce model is superior to the offline store model for laboratory-grown diamonds. He said, "This will increase the efficiency of each person.

However, Dong Qing also said, "However, the current situation in the laboratory-grown diamond industry is that the cost is getting lower and lower, and the price is also getting lower. Since September 2023, the price of laboratory-grown diamonds has fallen significantly, and the profit margin has become very low."

Zou runs various social media accounts under the name “I am Diamond Zou”.

Tan Wei Diamond covers both the source production and the final brand. Zou himself owns a lab-grown diamond factory. Being in the lab-grown diamond industry, he can feel how fierce the price war is, but he told NBD: “Selling cheap is not a skill, selling at a good price is.”

Photo/Wang Jiafei (NBD)

The price of lab-grown diamonds is indeed more accessible than natural diamonds. NBD heard a customer ask directly when visiting Tan Wei Diamond: “Do you have a 10-carat diamond?”

“Now we can sell 300 carats of lab-grown diamonds every month, excluding small fragments. For retail, this is a good result. Our scale is not very large at present, but lab-grown diamonds are a huge market, and I believe we can grow bigger in the future.” Zou said.

Wu Jun, who used to work in commercial real estate and is now the co-founder of the lab-grown diamond brand “LIGHT MUSES”, has more observations on this industry. He told NBD: “If there is still a disruptive industry now, lab-grown diamonds are definitely one of them.”

Wu Jun introduced that he had previously engaged in the export of lab-grown diamonds, and India was his main export market: “From the perspective of international division of labor, India is the main industrial concentration area for rough diamond cutting and processing. Many rough diamonds produced in Henan are exported to India, and then they are sold to other markets after initial processing in India.”

Almost all the lab-grown diamond practitioners interviewed by NBD are looking forward to “China Gold, a listed company, will engage in lab-grown diamonds”. They believe that China Gold, a giant, can bring more voice to the industry.

File Photo/NBD

On February 6, 2023, China Gold (SH600916) announced that the company plans to look for new growth, incubate lab-grown diamond and new material research and development projects, and set up a lab-grown diamond (new material) promotion department.

China Gold also said: “Compared with natural diamonds, lab-grown diamonds have stronger performance, on the one hand, the consumption segment is larger, on the other hand, the jewelry market is opened up, and the application scenarios are broad.”

The person in charge of China Gold’s lab-grown diamond project told NBD: “At present, China Gold’s own lab-grown diamond output is about 10,000 carats per month, which is limited.”

We can also see from China Gold’s announcement: “The production capacity of our own factory is still difficult to fully meet.”

Some insiders said: “If China Gold’s offline stores all start selling lab-grown diamonds, the domestic production will not be enough.” According to the announcement, China Gold’s store had 4,000 stores as of the beginning of 2023, and will maintain a 10% growth rate in the future.