There is no doubt that the aesthetic and wearable value of lab-grown diamonds is comparable to, or even surpasses, that of natural diamonds. Lab-grown diamonds offer a higher cost-performance ratio, allowing consumers to enjoy a better wearing experience with a lower budget. Thanks to advancements in modern production techniques, the quality of lab-grown diamonds is gradually surpassing that of many natural diamonds. Notably, lab-grown diamonds have significant advantages in the realm of colored diamonds. Rare carat-level blue and pink diamonds, which are hard to find in the natural diamond market, are more accessible when lab-grown. These wearing advantages can guide a brand's product strategy, but building the value of lab-grown diamonds requires more than just aesthetic appeal. While moissanite also boasts significant aesthetic value, it has failed to build emotional and financial attributes, which are the core components of diamond value.
Exploring the Emotional Value of Lab-Grown Diamonds
Building emotional value is currently the most critical and lacking aspect of lab-grown diamond branding. The value concepts of the new generation of consumers are more diverse than ever before. Industrial society's development has led mainstream consumers from developing to developed countries to engage more deeply in social division of labor, resulting in significant societal changes. This shift is particularly evident in the increasing independence and empowerment of women. The ideal love people yearn for is no longer the traditional prince-saving-princess narrative. Even in Disney princess stories, themes of equality, confidence, and adaptability are becoming more prevalent. This change has somewhat outdated the traditional eternal love aura of natural diamonds, while lab-grown diamonds have the opportunity to craft diamond love stories that align more with modern views on marriage and relationships.
For example, CARAXY's "GROW YOUR LOVE" campaign ties the unique characteristics of lab-grown diamonds to a narrative of growing, ever-improving love. Proposing with a lab-grown diamond represents a commitment to nurture and grow the relationship together. Positioning lab-grown diamonds around love is a stable approach to building emotional value, but it is not the only way. Self-appreciation is another potential path. Consumers growing up in the age of the internet and social media are increasingly driven to purchase luxury goods to express personal individuality rather than social status. Buying a brand now symbolizes personality, aesthetic preferences, and even value orientations, driving brand rejuvenation and laying the foundation for the growth of self-appreciation consumption.
However, the current challenge is designing and manufacturing lab-grown diamond jewelry that is affordable yet has a clear cost advantage over natural diamonds. The material cost of lab-grown diamonds is not cheap, especially for small stones, and there is no significant cost advantage compared to natural diamonds. Moreover, the cost of jewelry also includes precious metals and craftsmanship. If the proportion of lab-grown diamonds used is small, the entire piece of jewelry lacks a price advantage over natural diamonds. If the proportion is large, higher unit prices could exclude many self-appreciation consumers. In the future, as the manufacturing cost of lab-grown diamonds decreases and more innovative designs emerge, self-appreciation products made from lab-grown diamonds could capture a larger market.
From the perspectives of emotional appeal and self-expression, the unique emotional value of lab-grown diamonds is their sustainability. While the natural diamond industry has undertaken numerous projects related to human rights protection and sustainability, lab-grown diamonds have inherent advantages in their acquisition methods. According to a Frost & Sullivan report, the environmental impact per carat of lab-grown diamonds is approximately one-seventh that of natural diamonds. Sustainability is a unique value of lab-grown diamonds. In practice, some consumers, particularly in the largest market of the United States, are willing to pay for the environmental benefits of lab-grown diamonds. As the influence of sustainability continues to grow, environmental considerations will increasingly become a factor in purchasing high-value, highly personalized products, adding significant value to lab-grown diamond products and brands.
Exploring the Financial Value of Lab-Grown Diamonds
Building the financial value of lab-grown diamonds around branding is another key aspect of constructing their value system. The financial value of natural diamonds is rooted in their scarcity, whether natural or artificially created through oligopoly. Diamonds have a limited annual supply, which contributes to their financial value. Generally, it is believed that lab-grown diamonds, being industrially producible and not subject to oligopoly, lack scarcity. With technological advancements and increased competition, continuous price drops on the supply side are expected. However, does this mean lab-grown diamonds cannot have financial value?
Many industrially producible goods maintain strong prices and even appreciate, offering low depreciation rates and resale value, such as luxury handbags and certain brands of liquor and wine. Although lab-grown diamonds lack inherent scarcity, branding can create perceived scarcity. Technologies today allow for unique brand markings on diamonds, like De Beers' Lightbox brand, where each lab-grown diamond has an internal mark visible under magnification, providing brand recognition. CARAXY lab-grown diamonds come with co-branded certificates with IGI, giving them a unique brand identity. CARAXY also offers a certified second-hand goods trading platform, enabling consumers to resell their diamonds at 60-80% of the original price, providing liquidity and value retention.
By constructing perceived scarcity through branding, lab-grown diamond pricing should not be based solely on production costs. Instead, it must consider the brand's quality assurance, product design, purchasing experience, and after-sales service, reflecting the perceived value by consumers. While manufacturing costs can decrease with economies of scale, the intangible value provided by the brand increases as the brand develops. Exceptional brand managers should adjust prices based on actual conditions to accurately reflect the value of branded lab-grown diamond products.