Millennial attitudes are forcing a massive change in the diamond industry
Lab-grown diamonds are growing in popularity among millennial consumers shopping for engagement rings.
These diamonds can cost 30-40% less than mined diamonds but have a very similar appearance.
These stones are created by placing a tiny fragment of a diamond (a "carbon seed") in a microwave with varying amounts of carbon-heavy gas.
Millennials are coming around to a big loophole in engagement ring shopping.
The idea of spending thousands of dollars on a diamond is becoming less appealing as lab-grown alternatives of the stone are gaining traction. These lab-grown versions can look very similar to mined diamonds and can cost around 30-40% less.
This diamond-making process dates back to 1954 but has grown in popularity in the last decade. It's still small-scale, however, as manufacturers of these diamonds, such as Pure Grown Diamonds and MiaDonna, make up a very small part of the overall market share — around 1% of the $80 billion global business for rough diamonds.
But this could be changing. According to a Morgan Stanley report cited by Forbes, lab-grown diamonds could take 7.5% of the total market share by 2020.
The stigma around buying these "alternatives" is disappearing, largely thanks to millennials' evolving shopping tastes.
In a survey of 1,000 consumers aged between 21 and 40, half of which had household incomes of $50,000 or higher, nearly 70% said they would consider buying lab-grown diamonds, according to MVI Marketing. This was a 13 percentage-point increase from the year before, when 57% said the same, Forbes reported.
This is partly because the diamonds are very similar in appearance to mined diamonds. While the companies that manufacture the stones aren't allowed to refer to these are "real" diamonds — because they aren't — they aren't completely alien to the real versions.
In fact, the lab-grown stones are made from a tiny diamond fragment and have the same physical structure and chemical composition as a diamond that has been mined from the ground.
This so-called diamond "seed" is put inside a microwave plasma oven and blasted with superheated natural gases. The gas then sticks to each seed to create a plasma ball and slowly builds up the diamond. This process can take anywhere from 10 to 12 weeks.
The result is a similar-looking stone that costs less.
However, it's not just the price that is resonating well with value-hungry millennials. These diamonds also play to another one of millennials' preferences, and that is that they want to shop for socially conscious products.
"We are creating a new industry," Vishal Mehta, CEO of IIA Technologies in Singapore, which is reportedly the most prolific producer of synthetic diamonds in the world, told Bloomberg.
He added: "Consumers today really resonate with the idea of an eco-friendly and a conflict-free choice for diamonds. That's been a sticking point."
And they can sleep easy when opting for lab-grown diamonds, which have no risk of being blood diamonds.
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