The diamond industry finds itself at a pivotal moment in its history, as it faces mounting macroeconomic challenges, geopolitical tensions and evolving consumer expectations. Brought together by industry expert Avi Krawitz for a roundtable discussion during the CIBJO Congress held in Paris in late October, leading figures from across the sector explored the obstacles and opportunities shaping a new paradigm for the diamond market.
Participants:
- Mahiar Borhanjoo – Chief Commercial Officer, De Beers Group
- David Kellie – CEO, NDC
- Ravi Bhansali – Vice President, AWDC
- Yoram Dvash – President, WFDB
- Wafa Jaffery – Senior Specialist, DMCC Precious Stones & Dubai Diamond Exchange
- Didier Backaert – International Business & Marketing Consultant, Bonas Group
- Brijesh Dholakia – CEO, Hari Krishna Exports
- Avi Krawitz – Moderator
The marketing and semantic challenges of diamonds
A large part of the discussion focused on the rise of synthetic diamonds, whose impact goes beyond economics to raise fundamental questions about the positioning and communication around natural diamonds. Consumers today are exposed to the dynamic marketing of synthetic diamond producers, but also to the type of misinformation that stokes confusion and doubt about the true value of both natural and synthetic stones. Already being led by Natural Diamond Council (NDC), a strong marketing push is essential to restore the diamond dream, by refining the language and rebuilding a narrative around its rarity, authenticity and natural origin. De Beers’ initiatives (‘Origin Diamonds’ and ‘Desert Diamonds’) arehelping to create a world that celebrates the uniqueness of every diamond – Mother Nature’s gift, formed over billions of years deep within the earth – contrasted with the fast, large-scale production of synthetic stones.
The future of the natural diamond will depend on its ability to inspire.
Should the industry reinvent its vocabulary? The CIBJO is currently developing the Blue List, a comprehensive and transparent definition of industry terminology. Widely supported by professionals, it rethinks the use of the term Lab-Grown Diamond, a flattering expression that wrongly suggests these stones are made in laboratories. One participant noted that while emeralds benefit from a poetic lexicon to describe their inclusions “jardin,” (garden – a French term to describe emerald’s natural inclusions) and “givre” (frost – a term used to describe an emerald’s frosty appearance)), diamonds suffer from negative terms such as ‘frozen spit’. Yet these so-called imperfections are actually marks of authenticity and proof of a long journey through the heart of the Earth, so why not learn to describe them more positively?
In the US, where the term diamond can be used for both natural and synthetic stones without distinction, have synthetic producers benefited from this ambiguity? It is clear that the U.S. market has been deeply disrupted by the arrival of lab-grown diamonds.
A polarized market
Synthetic diamonds have experienced spectacular growth, with sales volumes reportedly surpassing those of natural diamonds in certain markets. In the US, which accounts for half of global diamond jewelry demand, more than 50% of engagement rings are now sold with synthetic diamonds, primarily for economic reasons, and to a lesser extent environmental ones. This trend has been driven not by consumers, but by retailers. With production costs dropping to $30 per carat and retail prices averaging around $1,000, the margins are significant. Because both types of jewelry are sold side by side, consumer confusion grows, often leading buyers to choose the cheaper option for a similar appearance. The argument that natural diamonds are reserved for high-end, sentimental purchases, while synthetic diamonds are for fashion-oriented jewelry, does not always hold true.
The initial wave of enthusiasm for synthetics now appears to be waning. As one panelist observed, the market seems to be evolving toward a form of “co-opetition” – a more balanced and considered coexistence.
Globally, the market is becoming increasingly polarized, between retailers seeking quick profitability and therefore favoring synthetic diamonds, and those who continue to maintain a clear distinction between synthetic and natural stones. In Asia and Europe, synthetics have not met with the same success, due to several factors, such as culture, a more traditional retail network and the labeling (where the word ‘synthetic’ is attached to diamond, unlike in the U.S., with the terms ‘fake’ and ‘imitation’ coming more easily to mind).
That said, retailers are beginning to rethink their approach, as profit margins have fallen sharply in step with the plummeting retail price of synthetic diamonds. De Beers has signed partnerships with major U.S., Indian, and Chinese retailers (Signet, Tanishq, Chow Tai Fook) to train sales staff on how to better promote natural diamonds, while NDC provides a wealth of online training tools.
Diamonds and gold: the rise of safe haven assets
The current challenges are also revealing new opportunities. Once a powerhouse luxury market before COVID, China has struggled to regain momentum. Diamond imports have collapsed, largely due to turmoil in financial and real estate markets. India, by contrast, is now seen as the next growth driver for luxury. Despite their differences, both countries share a growing inclination to invest in durable, safe haven assets. As gold prices surge, sales of 24-carat gold jewelry – for example, by Chinese brand Laopu Gold – have skyrocketed. While this trend currently penalizes diamond jewelry sales, the market is expected to stabilize once gold prices return to equilibrium. In India, weddings and celebrations continue to drive significant jewelry spending. India has traditionally been the world’s largest buyer of gold.
Structurally, therefore, this creates an obvious place for natural diamonds in both markets, which are seeking luxury products that carry enduring value.
A restructuring market in a volatile environment
Is the diamond market flooded? The issue of stocks keeps coming up and opinions remain divided. Some believe that the current economic and geopolitical conditions have led to excess inventory, while others argue that stock levels will self-correct thanks to a shorter, more direct supply chain. Gone are the days when De Beers and Alrosa dominated global supply. With Alrosa’s reduced presence, De Beers’ sightholder conditions have eased, and dealers are managing stock more cautiously in line with economic volatility.
However, the future remains uncertain. Generational shifts, pressure on dealers and evolving consumer demand are reshaping a transforming diamond industry, with the disappearance of some long-established players. The industry will definitely become more fragmented and segmented, requiring adaptation in both markets and products. While some polished diamond dealers have gone out of business, others have seized new opportunities through specialization, value-added innovation or geographic diversification.
For mining companies, the challenge lies in balancing massive long-term investments (such as the Venetia mine project by De Beers, which takes 10–15 years from development to first diamond extraction) with the need to maintain stable prices, support producing countries’ revenues (as in Botswana), a responsibility about which De Beers communicates widely.
Market structures are also evolving. De Beers is set to transfer a significant portion of its production to ODC in Botswana, which will be able to sell it directly. With its vast untapped reserves, Angola is emerging within the sector as a new source of natural diamonds. Specialized auction houses are also reshaping the diamond industry landscape. And perhaps most significantly, De Beers’ ongoing sale will profoundly alter its role and influence in the global diamond trade. Secure access to supply is a key growth driver.
The future remains uncertain for the moment.The US tariffs and the recent increase in Chinese VAT on diamonds are adding to the uncertainty and further straining the sector’s already fragile balance.
The diamond industry now finds itself at a crossroads, confronted by economic, geopolitical, cultural and environmental challenges. From mining groups to retailers, every player must adapt to an environment that has been changing rapidly and drastically for several years. Balancing short-term market pressures with a long-term vision is proving difficult, but it is the only way to ensure the industry’s continued relevance.
Image: The panel looking at the current challenges facing the diamond industry (from left) Avi Krawitz, moderator; Mahiar Borhanjoo, Chief Commercial Officer, De Beers Group; David Kellie, CEO, Natural Diamond Council; Brijesh Dholakia, CEO, Hari Krishna Exports; Ravi Bhansali, Vice President, AWDC; Yoram Dvash, President, WFDB; Wafa Jaffery, Senior Specialist, DMCC Precious Stones and Dubai Diamond Exchange; Didier Backaert, International Business & Marketing Consultant, Bonas Group.