Last year after returning from the JCK annual show in Las Vegas, I wrote about the fundamental changes lab-grown diamonds have imprinted on our global industry and my key takeaways. Twelve months later, I returned to the 2023 JCK Show. So, how does the landscape look now? There were mixed reviews as the global industry felt the effects of inflation and rising interest rates.
Aside from new trends, products and industry updates, there was a strong focus on lab-grown jewellery. With many growers debuting large initial ranges at the show, almost all of them launching substantial jewellery collections. This was a new trend amongst growers, an add-on from only promoting their loose certified diamonds. In addition, layouts of small fancies and large ranges of shoulder stones were also a growing trend that reflected across most jewellery ranges being launched. Amongst promoting coloured lab-grown diamonds, pink, blue and yellow were dominant.
For exhibitors, the mood was not upbeat. Certainly in the mined area, which is unsurprising as America consumes 50 percent of the world’s diamonds. The US market is down and sentiment is low as the consumer feels the aftershocks of COVID-19. The downward spiralling global economies post-COVID are clearly in full swing as inflation slows consumer spending and luxury has certainly taken a hit.
Is this the perfect recipe to further accelerate the growth of the lab-grown diamond category?
The current global economic climate is not helping the mined diamond space as lab-grown brings the perfect solution for consumers. With its value proposition, it brings middle-end consumers the best of both worlds and grows the lab-grown footprint further.
On the mined side, we saw most manufacturers pushing origin and traceability, De Beers in particular as it pushes the agenda with the launch of its origin suite of services. This should get traction in America and Europe but in Australia and New Zealand, I am not confident we will see consumer engagement as a priority, let’s watch this space.
0.50 carat to 3.00 carat mined goods feel the pressure as the middle to lower consumers feel the onset of inflation and rising interest rates. Three carats plus goods are still active and selling to wealthy consumers that are not affected to the same extent by the economic downturn. Still, consumers spending less than $15,000 AUD on engagement rings are gravitating to the lab-grown option over mined with the value proposition brought by lab-grown, this trend is organically growing and the data is reflecting this with acceleration.
With lab-grown quickly becoming many consumers’ choice of diamond, the hardest hit area in mined goods and, as predicted, the PK goods, the lower end of clarity and colours are substituted by lab-grown higher quality and the larger stone for the same spend. This resulted in the 0.50 carat to one carat mined goods dropping substantially in price in the past 12 months, around 20 plus percent in some areas. This will be a challenge for mines that yield these goods for the most part.
As a first mover in Australia in the lab-grown wholesale space, I now must reflect on my decision to start selling lab-grown diamonds many years ago. At that time, all my peers advised me to stay away from lab-grown diamonds, most saying it would fail. I saw it as a prime disruptor, one that would be monumental and change our diamond landscape forever and I was correct. This is reflected in the data today as lab-grown diamonds begin to exceed mined diamond sales by units in engagement rings being sold, certainly in America, the UK and Australia, and lab-grown hasn’t started to take off yet in China, with the Hong Kong show in September just around the corner we must watch this space.
Lab-grown pricing has come down a lot in the past 12 months but it looks like three carats and down are finally stabilising, this is what we were waiting for as retailers are now feeling more confident to hold asset stock in these sizes where they are seeing healthy supply turns, gaining confidence to onboard asset stock reflecting how retailers are satisfied that the category is here to stay.
In the past few months, retailers have started making up lab-grown jewellery to present in collections in their windows and are seeing good sales coming from this new norm. With that, I am excited to announce in the weeks ahead on our JC Jewels portal, we will launch one of the largest ranges of lab-grown jewellery available, covering all designs, metals, and all price points from entry-level to bespoke high-end. This will be a game changer as retailers will achieve exceptional margins in this area while consumers love the price points and the value it brings.
Following global discussions across the supply chain, my final takeaway from this year’s show was a monumental and organic shift towards technology. For the most part transacting through technology or a general level up with technology, suppliers and buyers across the globe are driving this and fast, a change that is fast-tracking our industry and levelling it up to other sectors. Our industry lags behind others, but it’s catching up fast.
My company, JC Jewels, was a first mover in this space and our clients, like most retailers globally, are engaging technology in a big way. When I launched our JC Jewels portal a few years ago, we were the first tech-based diamond merchant in Australia, evolving with aggression. Our clients see this way of transacting as the ”new norm” and so they should. It is faster and enables our clients to buy better with more product offerings and access. This is the new norm and it is the future. It is not an easy transition, but once in place, retailers are addicted to the efficiencies this brings on all levels, not to mention the increase in margins and conversion rates.
In this fast-moving world, those not entrenched in technology efficiencies and adapting their businesses to this new norm will fall behind. Technology has empowered JC Jewels and our clients with a price advantage, more product options, higher margins and more conversions in real-time. There are few platforms available in real time. After scanning the entire show, I further realised and was humbled by the power of JC Jewels’ technology and the value we deliver to our clients, the local retailer. Personally, I feel very proud of what my team has achieved as we write the history books and pave the path for a more efficient future in our industry. JC Jewels will be bringing more products and technology while investing in our technology to make our clients achieve better and faster results. We will contribute to our local industry and drive them forward on a global level into this new, fast-paced world of technology.
CEO, JC Jewels