“The Narrative About Lab-Grown Diamonds Is Changing”

By Victoria Gomelsky | March 19, 2025

After years of growth driven by retailers hooked on enormous margins, the lab-grown diamond market may be at an inflection point, says Paul Zimnisky, a diamond industry analyst who’s closely followed the lab-grown sector for more than a decade.

“I can definitely feel the narrative changing,” Zimnisky tells JCK. “There’s been this incessant narrative that lab-grown diamonds are God’s greatest gift. There’s nothing wrong with them, but I think the industry is putting itself in a difficult position given how heavily it’s promoting lab-grown. A customer comes into a store looking to buy a diamond and in their mind it’s a mined diamond, but the salesperson tries to steer them to lab-grown.”

Zimnisky says the fine jewelry category should remain dedicated to “materials that are rare and valuable.

“Lab-grown is getting to the point where it’s made to order,” he says. “You can order the size, color, and shape you want and have it delivered in four months. At the current rate, they’re going to be as big as ring pops.

“The industry is doing itself a disservice by conflating the two and telling customers they’re the same,” he adds. “I’m concerned about longer term implications. It’s not too late to address this. It’s extremely important to delineate the two products. I tell retailers, ‘Sell one or the other. If you’ve traditionally sold natural and want to sell lab-grown, open another store, segregate it.’”

Otherwise, he cautions, you’ll risk confusing your customers. In order to maintain the perceived value of natural diamonds, the only solution is to merchandise natural and lab diamonds as different products.

Zimnisky believes that demand for lab diamonds hasn’t stemmed from consumers, but from retailers seduced by the prospect of margins as high as 80% to 90%, compared with 20% to 40% for generic natural diamonds. And that the main reason the lab sector has focused so heavily on the engagement ring business is because “it’s the easiest,” he says.

“You’re selling solitaires. You’re riding on the coattails of 100 years of De Beers marketing.”

He is convinced that the reason lab diamonds have soared in popularity is because retailers are heavily incentivized to promote them. “Salespeople are convincing guys to spend less and get a bigger diamond, that they’re dumb if they don’t,” he says. “The tricky part is the actual price is falling and it’s starting to affect the top line.”

At wholesale, lab-grown prices are down 90% to 95% compared with prices in 2015, when the product began to go mainstream, Zimnisky says. “I could buy a very nice colorless VS 3 ct. lab diamond at wholesale for $300,” he adds.

On a recent trip to India, Zimnisky learned of lab-grown producers making diamonds for less than $10 per rough carat. “We’ve seen this before with manufactured products—look at LED light bulbs,” he says. “There’s nothing wrong with that but don’t try to pretend it’s the same as natural.”

Zimnisky says that message is finally starting to resonate with retailers, who are realizing that it may no longer be financially favorable to sell lab-grown.

“There’s been deflation in the entire category—natural prices are down, lab prices are down,” he says. “It’s enough to wake up the entire industry.”

Five years from now, he predicts that “a ton of lab diamonds will sell on Amazon and Alibaba. Consumers will not be spending $20,000 on a lab-grown diamond, they’ll spend $200. And the industry will gravitate back to natural.”

He says the introduction of testing devices, such as De Beers’ new DiamondProof, is encouraging because it allows customers to see the difference between natural and non-natural diamonds for themselves.

“The confluence of the two products—that’s suicide,” Zimnisky says.

Top: A 6.01 ct. lab-grown pear-shape diamond (courtesy of IGI)