Lab-Grown Diamond Price Collapse Ignites Jewellery Retail Surge as Market Redraws Space

Lab-Grown Diamond Price Collapse Ignites Jewellery Retail Surge as Market Redraws Space​

A dramatic correction in lab-grown diamond prices is rapidly transforming India's organised jewellery retail landscape. The unprecedented decline in cost has driven specialised brands to accelerate their offline expansion, leading mall operators to dedicate significantly more space to the category. These changes signal a fundamental shift in how consumers are purchasing significant luxury items.

Direct-to-consumer (D2C) brands focusing on lab-grown diamonds are quickly establishing a retail presence across high streets and shopping malls. Retail developers view this segment as one of the fastest-growing areas within organised jewellery retail portfolios.

DLF Retail senior executive director and business head Pushpa Bector noted that the category is growing rapidly, stating that it allows more people to afford larger diamonds, appealing strongly to Indian consumers who favour 2-3 carat solitaires. These stores are being characterized as small, high-yielding outlets forming an essential part of mall offerings.

The Great Price Correction and Industry Dynamics​

The current retail expansion follows a massive industry correction in the pricing structure of lab-grown diamonds. Estimates indicate that prices per carat for these stones have fallen by nearly 88 percent between 2020 and 2026. Industry executives currently believe that prices for lab-grown diamonds have largely stabilized after years of intense decline.

A senior diamond industry executive, who requested anonymity, explained this shift, stating that the falling prices are indicative of their industrial origin. Because they are an industrial product with unlimited supply, pricing is disconnected from demand, unlike natural diamonds which rely on scarcity and rarity.

This affordability is creating a new consumer segment, particularly among younger buyers and first-time jewellery purchasers. It represents more than merely replacing previous purchases; it is establishing an entirely new market demographic.

Global Outlook and Retail Strategy Shifts​

A CBRE report released in May projects the global lab-grown diamond market reaching between $60 and $100 billion by 2032. The consultancy attributes this growth to the category's "bridge-to-luxury" positioning, which is driving demand for specialised retail formats.

Consequently, dedicated jewellery hubs are emerging rapidly across major transit points and airports, catering specifically to impulse-driven luxury purchases. Mall developers are increasingly motivated to expand the jewellery category, seeing it as a proven method to improve overall mall competitiveness and boost trading density.

Redrawing the Retail Map: Coexistence of Two Markets​

While lab-grown diamonds are boosting transaction counts through high-volume growth, CBRE cautioned that natural diamonds continue to provide the higher ticket sizes necessary for maintaining premium rental rates in prime mall locations.

Retail developers are now favouring a balanced tenant mix, incorporating both traditional gold and natural diamond jewellers alongside dedicated lab-grown brands. This hybrid approach aims to maximize revenue streams while simultaneously attracting diverse footfall.

The rising acceptance of this material has also prompted established players to enter the space. Titan recently launched its specialised lab-grown diamond brand, beYon, planning to expand the brand to 10-12 stores within the current year.

The Future: Natural Diamonds and Occasional Luxury​

Despite the momentum in lab-grown segments, industry executives believe that the outlook for natural diamonds has improved following a prolonged downturn period. Controlling supply from miners is helping stabilize sentiments, especially in the segment of diamonds over 5 carats, which are seeing strong demand resurgence.

Neil Sonawala, managing director at Zen Diamond India, stated that while lab-grown stones can capture market share within crystal and fashion jewellery, natural diamonds will remain essential for major occasions. He added that as Indian consumers trend towards design-led pieces, the market for studded jewellery is set to climb consistently.

The consensus across industry experts is not a winner-takes-all scenario. Instead, both categories are expected to coexist: lab-grown stones making larger items affordable to a wider base, while natural diamonds continue to dominate the premium and occasion-based luxury segment.