Group 1 - The global market for lab-grown diamonds is significantly reshaping the diamond industry, with China holding a 75% market share in production, leading to a major disruption of the traditional diamond market [1][3] - De Beers is facing over $2 billion in inventory backlog and has seen a decline in reputation, even after reducing prices by 25% twice, while American jewelry giant WD has declared bankruptcy [1][3] - The production cost of lab-grown diamonds in China is only one-tenth that of natural diamonds, allowing for mass production of high-quality diamonds [3][5] Group 2 - The sales volume of lab-grown diamonds in China has rapidly increased to a market share of 56.8%, surpassing that of natural diamonds, indicating a shift in consumer perception [7] - The U.S. jewelry associations attempted to weaken the competitiveness of Chinese products by enforcing mandatory labeling of "lab-grown diamonds," but the FTC's 2018 adjustment to diamond definitions has legitimized Chinese lab-grown diamonds [7] - Notably, Western brands like Pandora and Swarovski are now entering the lab-grown diamond market, further accelerating the transformation of the industry landscape [7]

Core Insights - The diamond market is experiencing a significant downturn, contrasting with the rising prices of gold jewelry, as diamond prices continue to decline globally despite a brief increase in early 2023 [1][4][10] - De Beers Group announced the closure of its lab-grown diamond brand Lightbox and is considering divesting its diamond business due to declining performance across key financial metrics [4][6] - Consumer preferences are shifting towards lab-grown diamonds, which are significantly cheaper and meet the demand for personalized products, undermining the traditional value narrative of natural diamonds [7][8][10] Market Trends - Global natural diamond prices have shown a year-on-year decline, with specific price indices reflecting decreases of up to 20% for larger carat sizes [3][6] - The lab-grown diamond market is growing rapidly, accounting for 20% of the global diamond jewelry sales, with prices being approximately one-twentieth of natural diamonds [8][10] - Traditional jewelry brands are adjusting their strategies, with some like Chow Tai Fook optimizing their store formats while others like DR are shifting focus away from the traditional "love binding" narrative [9][10] Consumer Behavior - There is a noticeable decline in the foot traffic and sales of diamond jewelry, with consumers becoming more pragmatic and value-conscious in their purchasing decisions [5][6] - The younger generation is increasingly favoring lab-grown diamonds for their affordability and aesthetic appeal, leading to a reevaluation of the emotional value traditionally associated with natural diamonds [7][8] - The wedding market, a core driver of diamond sales, is also under pressure due to declining marriage rates, further impacting diamond consumption [6][10] Industry Challenges - The diamond industry is facing a dual challenge from both the rise of lab-grown diamonds and changing consumer attitudes towards luxury and value [10] - Continuous price wars in the lab-grown diamond sector are affecting profit margins, with significant price reductions observed in recent years [10] - The need for a redefined value proposition in the diamond market is becoming increasingly urgent as consumer preferences evolve [10]

Core Viewpoint - The luxury status of natural diamonds is being challenged by the rise of lab-grown diamonds, leading to significant price drops and demand declines for natural diamonds, prompting De Beers' parent company, Anglo American, to consider selling the diamond empire [1] Group 1: Market Dynamics - Lab-grown diamonds are rapidly capturing market share, with China accounting for 50% of the global lab-grown diamond production capacity as of 2022, and Henan province contributing 80% of that output [3] - The overall market price for natural diamonds has plummeted by 33% in just two years due to the competitive pricing of lab-grown diamonds [3] - Domestic brands like "Zheguang" are emerging quickly, with sales on platforms like JD and Tmall expected to exceed 50 million by the end of 2024, attracting international customers [3] Group 2: Consumer Preferences - Consumers are increasingly favoring lab-grown diamonds due to their superior quality and lower prices, with examples like a 3-carat VVS clarity, 3EX cut, D color princess cut diamond priced under 50,000, which is significantly cheaper than natural diamonds [5] - The perception that lab-grown diamonds can appear more brilliant than natural diamonds is supported by their ability to control quality, making high-quality natural diamonds rare and expensive [7] Group 3: Industry Trends - The lab-grown diamond market is projected to grow steadily over the next five years, with global production expected to exceed 40 million carats by 2030, and China currently holding over 70% of the production capacity [14] - There is a need for increased consumer education regarding lab-grown diamonds to differentiate them from moissanite and cubic zirconia, as well as to enhance brand value and accelerate global expansion to compete internationally [15]