Lab-grown diamonds (LGDs) have emerged as a significant player in the jewellery market, with global sales reaching nearly USD9 billion in 2024. This rapid expansion has prompted both opportunities and challenges for jewellery brands. As the market evolves, understanding the dynamics of LGDs is crucial for stakeholders to navigate this transformative period effectively.
Bridal and the US concentrate sales, but opportunities exist beyond
The LGD market has seen explosive growth, particularly in the US, which accounted for 70% of global sales in 2024. And although the US is expected to remain the largest market in the coming years, countries like Canada, India, and Germany are seeing growing interest in LGDs, driven by local consumer preferences and economic conditions.
This growth is driven by several factors. Affordability and accessibility are key, as lower prices than natural diamonds make them attractive to budget-conscious consumers. Affordability has expanded the consumer base to include those who might not have otherwise considered diamond jewellery.
Additionally, product diversification has played a significant role. Initially popular in the bridal segment, LGDs are now being used in a variety of jewellery categories, including bracelets, earrings, and necklaces. This diversification helps brands move beyond the highly competitive bridal market.
Combining online and offline retail strategies has been crucial for reaching a broader audience. Brands that effectively blend these channels enhance customer engagement and expand their market reach.
Challenges loom for LGDs amidst rapid growth
Despite the promising growth, the LGD market faces several challenges that could impact its future trajectory. As LGD production scales up, prices have been falling. This decline in prices can erode the perceived value of LGDs, making them less attractive to consumers who associate diamonds with exclusivity and luxury.
Declining prices will further squeeze margins, forcing manufacturers to cut costs, which in turn can harm quality, brand perception and consumer confidence. Innovation and differentiation can also be impacted as companies feel discouraged from investing in R&D.
Regulatory scrutiny is increasing, particularly around sustainability claims and labelling practices. For instance, the French government now mandates that all man-made diamonds be labelled as "synthetic", which could impact consumer perceptions and marketing strategies.
The rapid growth of LGDs has led to market saturation in some regions. As more players enter the market, competition intensifies, leading to further price declines and shrinking profit margins. Ongoing geopolitical and macroeconomic issues can impact consumer spending on discretionary items like jewellery. This could slow down the growth of the LGD market, particularly in regions facing economic challenges.
The outlook: Navigating the crossroads of market maturity
In a modest scenario where penetration remains constant in the next five years, sales of LGD jewellery could reach almost USD14 billion in 2029
Source: Euromonitor International
However, the surge in popularity of LGDs appears to be waning as they have now become mainstream, leading to a decrease in novelty and appeal. The question is whether consumers’ preference will shift back towards natural diamonds, or they abandon diamonds altogether.
As the market matures, competitors must find new ways to differentiate themselves and attract consumers. Affordability and sustainability or ethical claims alone will no longer be sufficient. According to Euromonitor’s Voice of the Consumer: Lifestyles Survey, fielded January to February 2025, only one third of millennials and Gen Z prioritise low prices, while less than 15% consider sustainability a decisive factor when purchasing fashion products.
The LGD market is at a crossroads, with both significant opportunities and notable challenges. As the market matures, brands that can effectively navigate these dynamics through strategic positioning, innovation, and transparency will be well positioned to thrive. The future of LGDs will depend on how well the industry can balance affordability with perceived value, sustainability with authenticity, and growth with market saturation.
Learn more about LGDs in our report, Lab-Grown Diamonds: A Market Revolution or a Passing Trend?, or read about overall jewellery trends in our article, Unlocking the Gen Z Code to Revolutionise Jewellery Sales.