This article first appeared in the JNA September/ October 2022 issue.

Lab-grown diamonds (LGDs) thrive in branded environments and, by the very nature of the product, encourage creativity in design, narrative and distribution. And as growing technology improves, the market is moving towards better-quality stones. This was the general consensus of speakers at the LGD Summit: Your Future in Lab-Grown Diamonds organised by Informa Markets Jewellery on August 16, 2022.

Aimed at helping professional trade buyers turn lab-grown diamonds into a substantial part of their business, the summit had a live event at the Sheraton Shenzhen Futian Hotel and a virtual presentation for a global audience. It was sponsored by Singapore-based LGD jewellery brand, X Diamond.

In the JNA-moderated keynote session, Branding for Success in the Lab-Grown Diamond World, Lightbox Commercial Director Nick Smart and The Future Rocks (TFR) Founder and CEO Anthony Tsang shared product and marketing strategies to unlock business opportunities in the sector and identified growth areas in the LGD jewellery space.

Lightbox and The Future Rocks both have a unique perspective on the subject – Lightbox as the first lab-grown diamond jewellery brand to offer linear pricing and standardised products, and The Future Rocks as the first curated online marketplace for lab-grown diamond jewellery brands globally, which seeks to bring LGDs into the mainstream.

Promising markets

Though lab-grown diamonds were already making their mark before the pandemic, the introspection and changing consumer attitudes brought about by lockdowns and restrictions accelerated market acceptance of and demand for the product.

Lightbox launched in 2018 as a direct-to-consumer fashion jewellery brand with linear pricing and product ranges available exclusively online to consumers in the US and Canada. In 2019, it launched in the US with wholesale partners Bloomingdale’s and Reeds Jewelers. Today, it ships to 75 countries and is present in over 120 stores in North America.

“While the US and Canada remain our primary markets, we have had strong success in the UK. Hong Kong is one of our leading markets as well and there is a growing level of demand from Singapore and Australia. We believe this appetite and growing awareness and demand for lab-grown diamonds is a global phenomenon. It is gaining traction worldwide,” said Smart.

The Future Rocks, for its part, has seen strong uptake from the market since its launch in April 2021. The platform carries artisan and designer brands with a distinctive future-forward perspective. Now showcasing 18 brands from the US, France, Germany and Japan among others, it ships to 22 countries around the world, with most deliveries heading to the US. Tsang is now training his sights on Japan and China, two markets where TFR launched earlier this year.

“The US is the biggest market at the moment and has the biggest number of LGD brands. Japan is also showing much potential. Orders are pouring in from Japan and, at the same time, the Japanese brands on our platform are doing well globally due to their minimalist designs and unique interpretation of brand values,” Tsang shared.

He has high expectations of China too, where he hopes to introduce LGDs to consumers, attract Chinese brands onto the platform and introduce these to a global audience. “Our goal is to be the driver of the LGD industry globally. Lab-grown diamonds are becoming popular in China and we expect that market to account for significant GMV (gross merchandise value),” Tsang said.

The LGD customer

The customer base for lab-grown diamond jewellery is widening as well, with the product category gaining more followers across age groups and occasions.

According to Smart, Lightbox initially targeted a typically self-gifting female aged 25 and younger. But aside from its millennial audience, the brand has seen a broader spread of acceptance since its launch.

“We span both the self-gifting and regular occasion gifting segment as well as travel jewellery. Many of our customers own diamond jewellery; Lightbox however enables them to own something they could not access in natural diamonds – a pair of pink or blue LGD studs or a bigger stone,” Smart revealed.

Moreover, the brand enjoys a high level of repeat purchase, with around 25 per cent of sales going to existing customers who already own multiple Lightbox jewellery pieces, Smart continued.

The Future Rocks meanwhile approaches its market in terms of psychographics, rather than demographics. Tsang describes the platform’s customers as having an appreciation for lifestyle, fashion and jewellery. They are willing to spend on things they like and want to look and feel good in general.

“In terms of earning power, they are middle to upper class. Age is not a restriction, whether they are a Gen Z, millennial or a mature individual. Our target is anyone who appreciates interesting and innovative jewellery with lab-grown diamonds and new materials,” he said.

Demand shifts

Growing consumer appetite for LGDs is driving Lightbox to enhance its capabilities. The output of its plant in Gresham, Oregon is being increased from the current 200,000 carats of polished diamonds annually to 300,000 to 350,000 polished carats per annum with the potential for further expansion.

The brand also introduced new products last year in response to customer demand. Now available are larger LGDs of up to two carats, following the same pricing logic of US$800 per carat. And its new Lightbox Finest jewellery line features higher-quality stones in DEF colours, VVS clarities and excellent cuts as requested by its clients. These cost US$1,500 per carat.

“There is definitely demand in the market for a more premium product. A segment of the market is willing to spend a bit more money for top-end quality,” Smart disclosed. “Lightbox Finest also allows our retailers that are selling high-end fine jewellery to reach a new customer who is willing to spend US$2,000 as opposed to US$10,000 or US$20,000. They get to tap a new segment, bring more people into the stores and get incremental sales.”

Lightbox Loose Stones meanwhile allows customers to buy LGDs and have these set by their own designers or favoured manufacturers. The product was initially launched as a trial for the online platform but was quickly rolled out to the brand’s retailers.

Smart explained that customers had been requesting for loose stones so they could participate in the design and creative process. “While we are confident of producing high-quality stones, we acknowledge that, as a brand, we cannot give everyone what they want in terms of design and produce this at scale. Lightbox Loose Stones is a good opportunity for customers to work with their local jeweller or preferred craftsman or designer in using our high-quality stone to create exactly what they want,” he said.

Growth areas

Smart sees tremendous opportunity in the LGD space from the design perspective. Designers, he said, could be inventive and creative with lab-grown diamonds in ways they could not consider with more expensive materials.

“The ability to grow the product in a lab offers all sorts of design possibilities, be that colour, shape and size. There is far more control over the product that enables greater creativity,” he shared.

New shapes, unisex pieces, more colours and innovative designs are likewise on the cards for LGDs, added Tsang, who is seeking to grow his brand inventory to 30 by the end of the year.

“The LGD sector has a lot of room to grow. It is currently at just 5 per cent of the natural diamond business. In the next three to five years, demand will grow exponentially with one or two countries leading the way – most likely the US, China and potentially Japan,” he said.

Smart expects Lightbox's new lines to be significant revenue generators moving forward. The brand is unveiling new products and designs by year-end geared towards giving customers more flexibility and choice in sizes and shapes.

“The market is definitely going for higher qualities and larger sizes. The underlying technology is just getting better so in two to three years’ time, I believe the majority of LGDs sold are likely to be in DEF colours,” Smart said.