Rising gold prices drive Indian consumers towards lab-grown diamonds

In recent times, the surge in gold prices has sparked a notable change in consumer behavior, particularly towards lab-grown diamond (LGD) studded jewellery, according to LGD manufacturers and retailers. The affordability of LGDs has become a key factor driving this shift, coupled with the promise of more gold proportion within the same budget.

Metropolitan Areas Embrace the Trend

Major metropolitan areas are witnessing a surge in demand for LGD jewellery, with growth rates estimated at least 15%. Metros, in particular, are showing significant interest, while second-tier cities like Pune are also joining the wave. Mukesh Shah, Founder of Ashth, highlights the awareness among consumers in these areas regarding the value proposition offered by LGDs.

Value Proposition: More Gold, More Diamonds

Pooja Sheth Madhavan, founder and managing director of Limelight Lab Grown Diamonds, illustrates the stark difference in gold proportion between traditional and LGD jewellery within the same budget. For instance, within a budget of Rs 5 lakhs, consumers can acquire significantly more gold and diamonds with LGD options compared to natural diamond jewellery, making it a compelling choice for value-seeking consumers.

Rapid Growth in LGD Demand

Disha Shah, Founder and Designer of DiAi Designs, notes the rapid growth in LGD demand in India over the past three years, with a 6-8% increase in 2023. She also acknowledges the fluctuations in diamond prices, both natural and lab-grown, attributing them to demand and supply dynamics. Despite the perception of unlimited supply with lab-grown diamonds, Shah believes that increasing demand will eventually stabilize prices.

Sustainability Concerns and Price Control

Madhavan raises concerns about the sustainability of further declines in LGD prices, emphasizing potential losses for growers and manufacturers. She underscores the need for price control and quality standards within the industry to ensure long-term viability.

In conclusion, the surge in gold prices has not only impacted consumer preferences but has also propelled the rise of lab-grown diamonds as a viable alternative in the jewellery market. As the industry continues to evolve, maintaining a balance between affordability, quality, and sustainability will be crucial for its future growth and success.