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Real vs Synthetic Debate Reveals Deep Divide in US Diamond Industry

With artificially-produced diamonds taking up more acreage than ever before at this year's prestigious JCK Las Vegas jewellery expo, opinions as to their merits compared to their conventional counterparts showed every sign of polarising.

Photo: JCK 2019: Golden (and silver) opportunities at leading US jewellery expo.
JCK 2019: Golden (and silver) opportunities at leading US jewellery expo.
Photo: JCK 2019: Golden (and silver) opportunities at leading US jewellery expo.
JCK 2019: Golden (and silver) opportunities at leading US jewellery expo.

In an ever-changing marketplace, where are we in the natural vs synthetic diamonds debate? While we're on the subject, which demographic is currently the one to woo if you're looking to sell high-end jewellery? And, how can you ensure next-gen buyers pop in and peruse your array of precious stones? These were just some of the questions confounding exhibitors and attendees at the recent JCK Las Vegas, the largest US jewelry industry trade event. As to how many found satisfactory answers, well that's a different story…

What was clear, however, that – by a ratio of more than six to one – jewelry professionals are optimistic when it comes to continuing consumer confidence and economic growth over the next 12 months, at least according to the 2019 JCK State of the Jewelry Industry Report. On top of that, social media is expected to be their marketing priority, with 72% of respondents seeing it as likely to be one of their most successful promotional channels, while only 57% had a similar expectation of conventional advertising and just 44% singled out other forms of digital engagement. Clearly buffeted by strong and growing competition from online-only retailers, the majority of the respondents also endorsed social media engagement above improving the in-store buying experience, with the latter the highest ranked way back in 2018.

Overall, Women who Purchase Jewellery for Themselves continues to be seen as a lucrative market segment, with 67% of such consumers spending more than US$500 and the average 2019 price point being $1,300, according to the report. With this segment now accounting for 32% of all diamond jewellery sales in the US, it is perhaps no surprise that the Diamond Producers Association is planning to launch a campaign specifically targeting "older millennial women" later this year.

Diamonds Are Forever?

With millions of dollars' worth of diamonds and jewelry on display, it's not unusual to see heavily armed guards patrolling the showfloor at the Sands Expo Center. This year, though, their attention was as much on an individual – Mokgweetsi Masisi, the President of Botswana and the first Head of State to visit the JCK – as on the gem-encrusted trinkets visible on every stand.

Rather than popping in to pick up a bauble or two for Mrs Masisi, His Excellency had made the 33,000-km round trip to Las Vegas to deliver a keynote address, one that stressed that diamonds remain his country's most important resource, representing one-third of its gross domestic product. He also took time out to pay tribute to De Beers, the London-headquartered business that is a 50/50 partner with his country in Debswana, the company that operates all Botswana's diamond mines.

Celebrating this longstanding arrangement, he said: "We met De Beers as equal partners, even though we were unequal to them. Now, Debswana is marking its 50th anniversary and I have no doubt, one day we will be commemorating its 100th anniversary.

"Overall, diamonds have played a huge role in transforming my nation into an upper-middle-income country. This revenue stream has had a huge impact on the lives of my people, facilitating everything from the availability of antiviral drugs to environmental responsibility. Now, it's set to play a key role in our evolution into a more knowledge-based economy."

The President was introduced by Bruce Cleaver, the Chief Executive of De Beers, who also took the opportunity to mark the success of this unique partnership, while emphasising the cross-generational appeal of diamonds, saying: "Millennials are very different to their parents. They don't buy into brands – they buy into social values. For the diamond trade, that's an enormous opportunity."

Cleaver also had very defined views on another issue currently dividing the industry – the rise of synthetically-produced diamonds. It's a game that De Beers has more than a little skin in, having launched Lightbox Jewellery, a lab-grown diamond brand, just over a year ago.

Photo: Lightbox: DIY-diamondsmiths.
Lightbox: DIY-diamondsmiths.
Photo: Lightbox: DIY-diamondsmiths.
Lightbox: DIY-diamondsmiths.
Photo: Gold leaf: A natural wonder from Amerjon Bio.
Gold leaf: A natural wonder from Amerjon Bio.
Photo: Gold leaf: A natural wonder from Amerjon Bio.
Gold leaf: A natural wonder from Amerjon Bio.

Despite that, Cleaver was still adamant that naturally-formed gemstones would not soon be supplanted by their manmade counterparts, saying: "We asked more than 70,000 people, across a range of income brackets, how they viewed synthetic diamonds. Their overwhelming response was that real diamonds are rare and finite and that's why they are so often tied to celebrations of life's most memorable moments.

"Overall, diamonds were not seen as things that could be simply recreated in a machine. As a result, perhaps controversially, we see the offering emerging from Lightbox as something completely new and independent."

Cleaver's clear sense of demarcation wasn't, however, shared by every attendee, with the show's Lab-Grown Source zone notably busier than it had been in previous years. Explaining this upsurge in activity, Victoria Gomelsky, the Editor-in-Chief of JCK, the New York City-based jewellery trade publication behind the event, said: "A lot of jewellers who had previously been with natural diamond companies have now jumped ship and taken-up positions with one of the new lab-grown startups. As a result, it's a conversation that has graduated to a new level."

This expansion in the synthetic sector has also triggered growing demand for tracing and transparency with the detection technology sector now increasingly competitive. It has also seen a consensus emerge that it is hugely important that synthetics can be detected efficiently, with any shortcoming here likely to irreparably damage the credibility of the trade in genuine diamonds. This has seen many pin their hopes on technological advances – notably a blockchain-based transaction database – as a way of short-circuiting the problem.

What's Trending

Away from the natural / artificial debate, a number of trends continue to shape the current diamond market. Most notably, coloured gems are performing well, with consumers enamoured with their lower price points and traders more than happy with their higher margins. As a result, this year the event was alive with a wide range of brightly-coloured designs, with multi-colored tourmalines and fancily-hued sapphires dominating the high-end, while dyed glass and quartz filled the cheaper seats.

For California-based Omi Gems, it's a trend that it's been happy to capitalise on, with President Niveet Nagpal saying: "People are now willing to take more of a risk. This has seen renewed interest in some of our edgier designs, as well as in some of our more unusual gemstones, the kind that people tended to shy away from a few years back. Now they're gravitating towards more interesting pieces, especially those that have interesting back stories."

Such back stories were also cited as important selling points by Amarjon Bio Jewelry, a southeast Brazil-based purveyor of earrings and necklaces fashioned from 18-karat gold-plated leaves. Outlining the company's USP, Sales Representative Marina Moreira said: "We work with magnolia, cypress, coffee and a number of native Brazilian plants, taking care to harvest their leaves at just the right time.

"We then use a proprietary technique to transform nature's bounty into jewellery. As each leaf is unique, all our jewellery is unique. Our customers like that and also appreciate the connection with the natural world."

Photo: Jewel carriageway: Aisles of plenty at JCK 2019.
Jewel carriageway: Aisles of plenty at JCK 2019.
Photo: Jewel carriageway: Aisles of plenty at JCK 2019.
Jewel carriageway: Aisles of plenty at JCK 2019.

JCK Las Vegas 2019 took place from 29 May-3 June at the Sands Expo Center.

Anna Huddleston, Special Correspondent, Las Vegas

Content provided by Picture: HKTDC Research
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