Core Viewpoint - The rise of cultivated diamonds in China represents a significant shift in the jewelry industry, transitioning from a follower to a leader in the global market, driven by advancements in material science and evolving consumer demands [1][3]. Industry Overview - The past decade has seen cultivated diamonds move from laboratory settings to market prominence, with China holding over 60% of the global rough diamond production capacity, establishing itself as the "world factory" for cultivated diamonds [3]. - China has developed a complete ecosystem for the cultivated diamond industry, encompassing technology research and development, rough production, cutting and polishing, and retail [3]. Market Dynamics - The perception of cultivated diamonds has evolved from being seen as substitutes for natural diamonds to being recognized by Generation Z consumers as symbols of personal expression [3]. - Despite high production capacity, the industry faces challenges such as low profit margins, with only 15% of global profits from finished products, compared to 300-500% markups seen in India and up to 1000% in Western brands [3][4]. Consumption Patterns - The domestic market for cultivated diamonds is primarily focused on the wedding sector, which accounts for over 60% of consumption, while other applications like fashion accessories and industrial uses remain underdeveloped, with less than 20% penetration [4]. - In contrast, the U.S. market sees a 45% share of cultivated diamonds in the fashion sector, indicating a significant opportunity for growth in China [4]. Industry Challenges - The industry is characterized by a high number of companies (over 2000) but lacks internationally recognized brands, leading to price wars and product homogeneity [4]. - Many companies focus on production rather than research and development, relying on imported core technologies and lacking a strong patent portfolio [4]. Strategic Recommendations - To address these challenges, the industry should focus on differentiated research and development of rough diamonds, encouraging collaboration with academic institutions to create specialized products for various applications [5]. - There is a need to enhance the value chain by establishing long-term partnerships with international brands and adopting a "rough supply + joint design" model to increase value-added processing [5]. - The industry should also explore new marketing strategies to reduce reliance on the wedding market and develop services that enhance customer relationships, such as diamond customization and lifetime maintenance [5]. Brand Development - Building a globally recognizable "Chinese mark" is essential, which can be achieved by integrating traditional Chinese culture with cultivated diamond aesthetics and leveraging technological advancements to enhance brand credibility [6]. - Initiatives like establishing a "Cultivated Diamond Technology Museum" can showcase technological innovations and patent achievements, further promoting the brand [6].