Dubai: UAE buyers do like their diamonds, whatever be their size, sparkle or carat. By the looks of it, they like diamonds whether they come from nature or out of a lab.
As Dubai emerges as a global point for ‘lab-grown diamonds’, the trade in these stones hit a sparkly inducing $12.24 billion in 2022. And Dubai itself saw a 125 per cent spike through 2022 in the import and export of $1.5 billion trade in such diamonds, mostly through the DMCC hub.
The DMCC free zone now hosts more than 30 companies that are into lab-grown diamonds.
“The lab-grown diamond industry is navigating a phase of transition, adapting to slower growth, disruption and market shifts in the US, while exploring untapped markets like China, Europe, India and the Middle East,” said Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer, DMCC.
“With the rise of the LGD industry symbolising the intersection of technology and trade, the potential it holds is monumental.”
Dubai offers a strategic location for lab-grown diamond innovation and trade, (and) envisioning a future where LGDs redefine industries and sustainability norms
Shoppers are getting into LGD
A handful of jewellery retailers in the UAE have been selling these diamonds – alongside the natural ones, of course. A couple of these retailers had even launched dedicated collections featuring the lab diamonds. Shoppers buying into the concept has also increased, with lower price points (compared to natural stones) being an obvious one.
Not surprisingly, ‘it’s a younger generation of shoppers that have quietly taken to lab-grown options’, said a Dubai jeweller. “But it’s a base that’s growing, with their preferences for everyday jewellery in less ornate options.”
A DMCC report suggests that more growth can be mined from lab-grown versions. For that to happen, the makers, traders and retailers should:
- Acknowledge LGDs as a ‘technology’ industry. The stones should be priced based on the technology they represent, positioning them as value-driven rather than commoditised products.
- Prioritise product innovation. Investing in research is essential to help reduce production costs and drive innovation in diamond and jewellery design, while also unlocking LGDs' potential in high-tech applications.
- Rethink supply chains. By transitioning to demand-led supply chains, LGD businesses can optimise operations, reduce inventory costs and accelerate the transformation from raw materials to finished products.
- Emphasise the value of the final product. Focusing on the value of the complete end product rather than individual components will enable partnerships that capture the comprehensive value proposition.
- Exhibit leadership and innovation. Embrace industry leadership by leveraging intrinsic strengths, marketing LGD products based on their unique attributes and setting benchmarks for sustainability.
For now, the industry is still shaping its end-user market. Demand for diamonds remains a sizeable part of the overall UAE jewellery market, more likely to see steady growth than the sharp ups and downs in gold demand.
Of late, jewellery retailers have been giving extra attention to diamonds, running campaigns that talk about full resale value and other attributes on diamond purchases. (This one is for the natural kind.)
According to Shamlal Ahamed, Managing Director of International Operations at Malabar Gold & Diamonds, the retailer is sticking to a wait-and-watch approach on selling lab-grown diamonds. “We are trying to make up our minds about whether the price points on lab diamonds would excite our shopper base,” said Ahamed.
What we do find is there are still emotional elements attached to buying diamonds - the kind that's developed through nature over millions of years.
But lab grown diamonds are here to stay, and only needs time to develop beyond being a niche - or novelty - space into something bigger.