The Indian consumer is ready for LGDs as this is a product that is environment friendly, conflict free, looks and is the same as a mined diamond, but is also available at an attractive pricing! A lot of our natural clients have converted into lab grown and my business is pretty much 100% lab grown now. There is enough demand for me to make an independent business of it on my own.”-SHIVIKA POONGLIA PATEL Partner, Itara JewelryLab Grown Diamonds (LGDs) are slowly, but steadily, making their way into retail stores, but are Indian consumers ready to accept LGDs wholeheartedly, and treat them on par with mined diamonds? Kamakshi VF endeavours to find out some answers

Lab Grown Diamonds (LGDs) are slowly making inroads into the Indian market, but it remains to be seen as to whether Indian consumers are ready to accept them as real diamonds. Globally, they have gained acceptance in a big way, particularly in the US. However, here in India, the going has not been so easy for LGDs.

LGDs were introduced in India in 2004, and have evolved from being only yellow stones to clear white and now available in all fancy colours. According to GJEPC, India accounts for about 15% of the global production of LGDs; exports of polished lab-grown diamonds stood at $1.3 billion this year, nearly double compared to $636.25 million in FY 2020-21. In the domestic market, the major buyers are space, research and industrial equipment industries, with jewellery manufacturers accounting for only about 2% of the pie.

As per a WiseGuy Survey Report, globally, the LGD jewellery market is growing at the rate of 28% annually, while the LGD segment of the Indian gem and jewellery industry is growing at the rate of 105% annually. GJEPC has estimated that the LGD segment has the potential to grow to Rs 40,000 crore, from the current Rs 10,000 crore in the next five years.

HOW READY I S THE INDIAN CONSUMER?
LGDs came into India in 2004, when Fiona Diamonds was founded. The company started its business in LGDs in the year 2007, and opened its first outlet in 2013 in Mumbai. Parag Agarwal, Founder & CEO Fiona Diamonds, says that in his experience “the Indian consumer is not yet aware about LGDs, so acceptance will come after awareness.” Ishu Datwani, Founder, Anmol Jewellers, describes the psyche of the consumer

when he says, “In my opinion, people who prefer real diamonds prefer them for their rarity and timelessness. Real is rare, and therefore precious. This segment is going to stay loyal to the real diamonds as they won't consider LGDs as real diamonds. However, there is also a segment that will buy LGDs. This category is the one that wants to enjoy wearing diamonds but either doesn’t have the taste for, or the budget for real diamonds. The value of LGDs has been depreciating over the past five to seven years, whereas real diamonds have always gradually appreciated. Both categories cater to two different markets. As far as Anmol is concerned, we believe real is rare and will always cater to the consumers of real diamonds. If one had to make a comparison, it’s like some consumers would only buy real, original and authentic high-end branded bags and then others who would buy the first copies.” According to Shivika Poonglia Patel of Itara Jewelry, Mumbai, “The educated Indian consumer is evolving and on par with the western consumer in this aspect. So, definitely, they are looking for products that are newer, more in line with environmental concerns and on price points. Millennial consumers are aware and conscious of their purchase like never before, and have reached a point where decisions are based on modern global values of environment suitability and cost effectiveness. The Indian consumer is ready for LGDs, as this is a product that is environment-friendly and conflict-free, looks and is the same as a mined diamond, but is also available at an attractive price.”

A.V.R.SIDDHANTH Director, AVR Swarna Mahal Jewellers “The Indian consumer is more than ready for lab grown diamonds and jewellery. Earlier we were hesitant to launch LGDJ and wondering if we should go ahead or not. But our customers gave us the confidence and our first sale was 150 carats.We sold 150 ct. of LGD jewellery all at once! That is how we gained confidence to launch our own lab grown diamond brand Evaglow Diamonds From Top of The World”ORRA from the House of Rosy Blue, headed by Dipu Mehta, has recently launched Divaa, a collection of select LGD jewellery. Says Mehta, “The Indian consumer is ready for cultivated diamonds, though this is not to say that LGDs will ever replace mined diamonds. LGD jewellery is a completely new category, and we are confident that in the next five years, we will have customers buying cultivated diamonds. Divaa by ORRA is a new and exciting brand in diamond jewellery category. From pieces with an understated glamour to designs that redefine bold and unconventional, we offer everyday luxury customized to everyone’s personal style.”

A.V.R. Siddhanth, Director at AVR Swarna Mahal Jewellers, says, “Last year this time around, I was not convinced. However today, I can say with full confidence that the Indian consumer is more than ready. Earlier we were hesitant to launch LGD jewellery and wondering if we should go ahead or not. But our customers gave us the confidence and our first sale was a whopping 150 carats. We literally didn’t have any LGD stock when we received this special order. Once we sold 150 ct, we gained confidence to launch our own LGD brand, Evaglow. It has been four to five months since we launched LGDs and the entire merchandise was sold out and this is a testament to the fact that Indian customers are ready for LGDs.”

DEFINING THE CONSUMER
According to Shashikant Dalichand Shah, Chairman of the Lab Grown Diamond & Jewellery Promotion Council, “The Indian woman who is aged 45 and above will not accept this category of diamond, as she has known and touched a real diamond. However, if that woman was essentially an A+ or HNI category of client, it would be different. The global profile of the lab grown consumer is of a lady who is aged 18 to 35 and falls in the B+ category, employed in the IT sector or is service-oriented. The population of B+ consumers globally falls in the range of about 55%. However, in India the population of 18 to 35 is mostly of couples and ranges about 60% of the population. So, if this category is accepted by them, the kind of demand that would arise keeping the population of consumers in mind would be unprecedented.” According to The MVEye research findings, the core consumer groups buying lab-grown diamonds, or the global next generation of labgrown diamond buyers, are 25- to 38-year-old millennials in the first segment who are already aware of LGDs. The second segment includes 25- to 38-year-old millennials who haven’t heard of LGDs, but are easily convinced to learn more. The third segment includes upgraders aged 55 and above, looking to upgrade their wedding rings. There is an interesting three-anda- half segment also of selfpurchasing females of all ages. Talking about her experience, Patel says, “A lot of our natural clients have converted into lab grown and my business is pretty much 100% lab grown now. There is enough demand for me to make an independent business of it on my own. Conversion will take time, but will surely happen as far as this group is concerned. Once this group reaches an age where they can make purchase decisions themselves, it will open up an entire new world of consumers. A lot of our current customers are younger working individuals, and of course there are people who are old timers as well, who have adapted to this product but there is so much potential in the younger lot.”

“Currently, there is no awareness regarding LGD in the market. Retailers do not educate their customers about it since they are worried about selling their inventory of natural diamonds where they have already invested heavily. If you go back to the late 1990s, even natural diamond aspiration and awareness was not much. But then De Beers asked each sight holder to launch a consumer brand because of which aspiration and awareness grew. So, we need more and more brands to come up with LGDs to spread awareness.”*-PARAG AGARWAL Founder & CEO, Fiona DiamondsLGDS ENJOY COST ADVANTAGE
The comparative cost of launching a natural diamond showroom at around Rs 10 crore with a Lab Grown Diamond Jewellery showroom at approximately Rs 3 crore is also noteworthy. “In natural diamond jewellery, the turnover is two times or maximum three times; but in LGD trade, the money will rotate six times. Customer inflow will increase, so the

profit that is in the turnover will be in percent format. So, in natural diamonds, the turnover is naturally two to three times because people who purchase will come once to make a purchase, not visit often. In LGD, the lobby will be greater, the turnover will be more, and the business will be over six to seven times, so your profit will be more.”
According to Agarwal “The major hurdle always is awareness and reach. Currently, there is no awareness regarding LGDs in the market. Retailers do not educate their customers about it since they are worried about selling their inventory of natural diamonds where they have already invested heavily. If you go back to the late 1990s, even natural diamond aspiration and awareness was not much. But then De Beers asked each sight holder to launch a consumer brand because of which aspiration and awareness grew. We need more and more brands to come up with LGDs to spread awareness. Transparency and transfer of information is very important while creating awareness. And all this should be backed up with the right merchandise of products in each category of jewellery, like rings, earrings, pendants, etc. The mindset of consumers has to be kept in mind as they are always going to compare the pricing of the same product in natural diamonds.”

People are moving away from the concept of ‘diamonds are an investment,’ says Patel. “A lot more focus is on wear-ability. LGDs offer Indians the opportunity to not only purchase a real diamond, but wear it and flaunt it every day. At Itara, we try to integrate diamond jewellery into everyday life, especially with the designs that we offer. A lab grown product is so versatile, gives people the opportunity to wear diamonds, at the same time be sustainable.”

Adds Pooja Sheth Madhavan, MD & Founder of Limelight Lab Grown Diamonds, “Awareness about LGDs is spreading fast in India. Consumers are now more educated about these real, non-mined diamonds. The unique and independent personality of lab grown diamonds as a sustainable and environmentally friendly, yet affordable gemstones, is extremely well accepted in the millennial consumers and is increasingly reflecting in the sales of lab grown diamond studded jewellery across India.”

LGDs also provide more options to retailers, as well as consumers. Says Siddhant, “Thanks to LGDs, we can have a wide range of design options in solitaires, unlike before. A jeweller can showcase 20-pointers to 7-carat solitaires, giving customers a chance to touch and feel real diamonds and increase the possibility of sales. Because of LGDs, we can have a bigger stock and an attractive range of jewellery in fancy coloured diamonds as well. The entire diamond studded industry can benefit as a majority of lab grown diamonds are grown in India and we have personally witness ed a huge demand.”

The war between Ukraine and Russia has created a shortage of rough stones. LGDs have provided respite by being readily available. Says Siddhant, “We don’t want to go against mined diamonds. There is nothing that can replace mining and naturally mined produce. Lab grown diamond is just a choice, it is another option available, like cubic zirconia, so there is another choice for a real diamond available now and it does not require the expenditure of mining and labour, so it is cost effective, and environmentally sustainable too.”