Lab-Grown Diamonds: Reshaping Retail Strategies and Profitability in the Evolving Jewelry Market

The jewelry industry is undergoing a seismic shift as lab-grown diamonds accelerate their market penetration. By 2025, laboratory-grown diamonds are projected to account for 20% of the global diamond market, driven by technological advancements that have improved their size, quality, and affordability [1]. With a market value of $25.68 billion in 2024 and expected to reach $27.95 billion in 2025, the sector is growing at a compound annual growth rate (CAGR) of 8.9% [2]. This surge is fueled by consumer demand for ethically sourced, sustainable alternatives to mined diamonds, which are priced at $4,875 per carat compared to $1,500 per carat for lab-grown equivalents [3].

Retailers are now at a crossroads, forced to adapt to a market where lab-grown diamonds offer higher profit margins—60% to 65% versus 40% to 45% for natural diamonds—while also posing risks to the perceived value of mined stones [3]. Strategic positioning is critical. Some retailers, such as Pandora, have fully embraced lab-grown diamonds, leveraging their affordability and sustainability to attract younger, values-conscious consumers. Pandora’s 2024 expansion of 200 new stores, paired with a commitment to 100% renewable energy in diamond production, underscores how sustainability can drive growth [2].

Conversely, De Beers’ decision to shut down its Lightbox lab-grown diamond brand in 2025 highlights the challenges of balancing lab-grown and natural diamond markets. The company cited declining profitability due to oversupply and competitive pricing from Chinese and Indian producers, shifting focus instead to its Tracr blockchain platform, which tracks natural diamonds from mine to market [3]. This pivot reflects a broader industry trend: while lab-grown diamonds capture market share, retailers are increasingly emphasizing transparency and ethical sourcing to preserve the premium status of natural diamonds [1].

The profitability of lab-grown diamonds is further complicated by market saturation. Wholesale prices have plummeted by 87% since 2018, prompting retailers like James Allen and Brilliant Earth to focus on online sales and digital engagement to maintain margins [4]. These brands have capitalized on the 60% of lab-grown diamond purchases made online in 2023, a figure significantly higher than for natural diamonds [4]. Meanwhile, India’s Trent Ltd. launched its lab-grown brand “Pome” in October 2024, targeting luxury consumers with competitively priced jewelry and leveraging its parent company’s retail expertise [2].

Despite these successes, challenges persist. The conflation of lab-grown and natural diamonds risks devaluing both categories, as warned by industry experts like Paul Zimnisky [1]. Retailers must navigate this by clearly segregating product lines or emphasizing unique value propositions, such as the rarity of natural diamonds or the ethical credentials of lab-grown alternatives. For instance, Adamas One Corp. has invested in Chemical Vapor Deposition (CVD) technology to produce high-quality lab-grown diamonds, while also addressing production cost challenges through energy efficiency improvements [4].

The broader diamond jewelry market, valued at $358.1 billion in 2024, is projected to grow to $437.2 billion by 2030, driven by rising disposable incomes and e-commerce [3]. However, the resale value of lab-grown diamonds remains a concern, with analysts noting their lower long-term retention compared to mined stones [5]. This dynamic forces retailers to innovate in branding and customer education, ensuring that lab-grown diamonds are marketed as sustainable, ethical choices rather than mere cost substitutes.

For investors, the key lies in identifying retailers that balance innovation with strategic differentiation. Those that integrate lab-grown diamonds into their offerings while preserving the premium narrative of natural stones—through transparency, sustainability, and targeted marketing—are best positioned to thrive. As the market evolves, the ability to adapt to shifting consumer preferences and technological advancements will determine which retailers emerge as leaders in this new era of jewelry commerce.

**Source:[1] Laboratory-Grown Diamond Trends | GIA Research [https://www.gia.edu/gia-news-research/gems-gemology-summary-latest-research-lab-grown-diamonds][2] Lab-Grown Diamonds Market: Top Players & Trends 2025 [https://www.nextmsc.com/blogs/whats-driving-the-lab-grown-diamonds-market-in-2025][3] Lightbox: Controversial lab-created diamond brand shutting down [https://www.jewellermagazine.com/Article/14128/Lightbox-Controversial-lab-created-diamond-brand-shutting-down][4] Lab Grown Diamonds Market 2025 - Growth Insights & ... [https://www.thebusinessresearchcompany.com/report/lab-grown-diamonds-global-market-report][5] Are Lab-Grown Diamonds a Smart Investment in 2025 [https://www.goldenbirdjewels.com/blogs/topic/lab-grown-diamond-investment-2025?srsltid=AfmBOoowM_5Oka2-LHpZMQX3McJe3rB8K0K-WkM_5CmdfJ6nF0BwL6XJ]