De Beers repositions in India as lab-grown diamonds gain popularity

De Beers, synonymous with the glitzy world of natural diamonds, is facing the challenge of losing some of its sparkle. This challenge comes from cheaper, lab-grown diamonds, which have caught the fancy of millennial and Gen Z customers in India, just as they have across the globe, from the US to China.

 

Lab-grown diamonds have a lot going for them — they are 60-75 per cent cheaper than natural ones, and with mass production, prices are falling further. Besides, they share the same chemical composition as natural diamonds and cannot be differentiated by the naked eye.

 

In a Deloitte survey in India, 52 per cent of respondents said they would or might buy lab-grown diamonds, reflecting a discernible change in consumer preference. With retail sales of jewellery using lab-grown diamonds reaching $600-700 million last year, they now account for around 6 per cent of the overall diamond jewellery market (natural and lab-grown) in the country. Buoyed by this growing popularity, major players like Tata-controlled Westside have entered the business with the brand “Pome” across India.

 

But De Beers is not sitting quiet. It is reimagining its strategy in India by launching company-owned retail stores to sell De Beers-studded jewellery for the first time in the country (this was previously done only in China). The plan is ambitious: To set up 100 stores by 2030, beginning with 15 in New Delhi and Mumbai this

 

year under the “Forevermark” brand. The brand currently operates through four franchised stores, but under the new strategy, it will be introduced in a new format with fresh jewellery designs starting at as low as ₹20,000.

 

“We will be the only international brand that controls everything, from the source of raw diamonds to the final jewellery product in stores,” said Amit Pratihari, managing director of De Beers India. “We are globally incubating the new-format stores from the Indian market, and we will offer ‘Make in India’ jewellery.”

 

De Beers has traditionally operated under a business-to-business (B2B) model, selling rough diamonds to companies that polish them for jewellers. However, with its own stores, it is shifting to a business-to-consumer (B2C) model, establishing direct relationships with customers and showcasing the value of natural diamonds versus lab-grown ones.

 

Pratihari conservatively estimates that these stores should collectively generate at least $100 million annually to begin with. The company also plans to expand into Tier-II and Tier-III cities, such as in places like Silchar (Assam) or Raniganj (West Bengal), where there is significant demand for diamond jewellery.

 

The stores will provide facilities currently prevalent in gold retail stores: Buyback of diamond jewellery, exchange offers, and even monthly deposit schemes to make buying diamonds easier.

 

The focus on India is strategic. The country has become De Beers’s second-largest diamond market, after the US, displacing China last year amid an economic slowdown that has impacted the gems and jewellery business. Globally, De Beers is facing a slowdown in sales — partly due to China’s reduced demand for diamonds, which fell by 25 per cent in 2024 compared to the previous year, and partly due to a noticeable shift in the US market towards lab-grown diamonds. A survey by The Knot, an online wedding platform, revealed that half the respondents would buy a lab-grown diamond ring for their engagement.

 

However, Pratihari believes fears about lab-grown diamonds are exaggerated in India. Natural diamond-based jewellery currently accounts for 10 per cent of the $80-85 billion annual gems and jewellery market in the country, and is growing at a steady rate of 8-10 per cent annually. By 2030, industry estimates predict the market for gems and jewelleries will reach around $120 billion, ensuring continued growth for diamonds too. Pratihari points out that most jewellery retail brands, including Tanishq from the Tatas, have also kept away from getting into the lab-grown segment.

 

“There are two different markets, and both will grow,” Pratihari said. “But lab-grown diamonds will remain a replica market for natural diamond jewellery, much like the choice between pure gold and rolled gold. Our market caters to special occasions like weddings and ring ceremonies and is part of family heirlooms. There is no comparison.”

 

This sentiment is reflected in the Deloitte survey, which shows that while 97 per cent of respondents chose gold as their most preferred jewellery, natural diamonds were second, with 46 per cent listing them as a preferred material. Lab-grown diamonds ranked much lower, with only 6 per cent of respondents preferring them.

 

A key area where De Beers wants to make an impact is ensuring the authenticity of diamonds — a major concern among customers and sometimes even jewellers. This issue deters potential buyers, because there is no equivalent to the Hallmark certification for gold purity in the diamond industry.

 

To address this, De Beers has opened the De Beers Institute of Diamonds in Surat to the 40,000-50,000 jewellers who sell diamond-studded products. For a nominal fee, jewellers can certify all aspects of their diamonds — from clarity to colour — at the facility.

 

That apart, De Beers has designed machines that are smaller in size and can be deployed  in retail stores to test the purity and other parameters of a diamond. It is training jewellers on these machines. Talks are also on with the Gems and Jewellery Export Promotion Council as well as the government to create authentication standards for diamonds, just like for gold.    

 

The company will provide similar certification to customers in its own retail stores, offering a unique identification number for each diamond sold.

 

Through its new stores, De Beers intends to introduce top-tier design expertise in jewellery making. According to the plan, about 80 per cent of the jewellery sold will feature western styles, with the remaining 20 per cent being traditional Indian designs. To attract the best designers, the company will leverage its design studio in Milan to create offerings specific to the Indian market.

 

These measures, De Beers hopes, will make its diamonds sparkle forever.

 

Diamond: nuts and bolts

 

> Natural diamonds account for 10% of India's $80-85 billion per annum gems and jewellery market, which is growing at 8-10% annually

> Lab-grown diamonds contributed $600-700 million to the market last year, with rapid growth expected

> The Indian gems and jewellery market is projected to reach $225-245 billion by 2035, a threefold increase from current levels

> A Deloitte survey found that diamonds are the second most preferred material for jewellery in India after gold

> Gold jewellery, gold coins, and digital gold are the top three preferred forms of jewellery for investment; diamonds rank fourth

 

What people want 

 

35% 

prefer lab-grown diamonds as everyday jewellery

29% 

choose them as gifts for friends

22% 

opt for them as engagement rings

18% 

prefer them for customised jewellery

 

Sources: Deloitte, Industry estimates  

 

Lab-grown vs natural

 

Similarities

 

> Chemically and physically identical — both are pure carbon, making them the same at a molecular level

> Share the same hardness, brilliance, and fire

> Indistinguishable to the naked eye

> Graded by the same criteria: Cut, colour, clarity, and carat

 

Differences

 

> Origin: Natural diamonds are formed deep within the earth over millions of years under high pressure and temperature. Their availability is limited due to their geological formation

> Production: Lab-grown diamonds take only a few weeks to produce. They start with a seed (a fragment of a natural diamond) and undergo technological processes that mimic natural conditions, such as high pressure and high temperature. These diamonds can be mass-produced