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Global lab grown diamond market is expected to achieve the size of US$ 52.5 billion by 2031 from US$ 20.9 billion in 2022 by registering a compound annual growth rate (CAGR) of 10.78% over the forecast period, i.e., 2023-2031.
The increasing demand for lab-grown diamonds is driven by various factors. One of the significant factors is affordability. Lab-grown diamonds are more affordable than natural diamonds, making them an attractive option for consumers who want to purchase diamond jewelry but have a limited budget. The price of lab-grown diamonds is typically 30-40% lower than that of natural diamonds, making them an accessible option for many consumers.
Another factor driving the demand for lab-grown diamond market is ethical concerns. Natural diamonds are often associated with unethical practices such as child labor and exploitation. Lab-grown diamonds, on the other hand, are produced in a controlled environment, ensuring that they are free from any ethical concerns. This makes them an attractive option for consumers who are conscious about the ethical implications of their purchases.
Eco-friendliness is also a significant factor driving the demand for lab-grown diamonds. The production of natural diamonds involves mining, which can have a severe impact on the environment. In contrast, the production of lab-grown diamonds is an eco-friendlier process as it does not involve any mining activities. This makes them an attractive option for environmentally conscious consumers.
The rising disposable income of consumers and the growing trend of customized jewelry are also expected to contribute to the lab grown diamond market growth. With an increase in disposable income, consumers are willing to spend more on luxury items such as diamond jewelry. Moreover, the trend of customized jewelry is gaining popularity, and lab-grown diamonds offer a great option for consumers to create unique and personalized pieces.
High Affordability than Natural Diamond to Drive Growth Of Lab Grown Diamond Market
Lab-grown diamonds are significantly more affordable than natural diamonds. This affordability factor is a major driver of the lab grown diamond market growth. The cost of lab-grown diamonds is typically 30-40% lower than that of natural diamonds, making them accessible to a broader range of consumers.
One of the significant reasons for the lower cost of lab-grown diamonds is their production process. Lab-grown diamonds are produced in a controlled environment using advanced technology, which is more cost-effective than the traditional mining process used to extract natural diamonds. Furthermore, lab-grown diamonds are more abundant, making them more readily available, which further reduces their cost.
The advancements in diamond manufacturing techniques, such as Chemical Vapor Deposition (CVD) and High-Pressure High-Temperature (HPHT), have significantly lowered the production costs of lab-grown diamonds. These advancements have made the production process more efficient and scalable, resulting in high-quality diamonds at a lower cost.
With changing consumer preferences, there is a growing demand for affordable diamond jewelry. The younger generation of consumers prefers lab-grown diamonds due to their affordability and the fact that they align with their ethical values in the global lab grown diamond market.
Increasing Demand for Customization
The rising trend of customized jewelry is driving the demand for lab-grown diamonds. Consumers are increasingly seeking unique and personalized pieces of jewelry that reflect their personality and style. Lab-grown diamonds offer a great option for customization due to their availability in different shapes, sizes, and colors.
Lab-grown diamonds offer a wide variety of options for customization, making them a popular choice among consumers. They can be produced in different shapes such as round, princess, and cushion, and can be customized to fit various settings and designs. Additionally, they offer a broader range of color options, including fancy colors that are rare in natural diamonds.
Customization using natural diamonds can be expensive, as it involves selecting a diamond that matches the desired specifications. In contrast, lab-grown diamonds offer a more cost-effective option for customization, as they can be produced to meet the desired specifications without the added cost of searching for a natural diamond in the lab grown diamond market.
Among the manufacturing methods, Chemical Vapor Deposition (CVD) exhibits the highest growth rate. The CVD segment held the highest segmental share of 56.8% in 2021 in the global lab grown diamond market. The CVD process involves the use of hydrocarbon gas and hydrogen in a vacuum chamber, where the gases are ionized and the carbon atoms are deposited onto a substrate to form diamond crystals. This method offers several advantages, such as scalability, high purity, and controlled growth, making it a preferred choice for lab-grown diamond manufacturers.
On the basis of size, the 0.25 To 2.5 Carats segment is maintaining a strong foothold in the lab grown diamond market and is expected to achieve the size of US$ 33.34 billion by 2030 from US$ 13.04 billion in 2021 by registering a compound annual growth rate (CAGR) of 11.32% over the forecast period. This segment caters to the growing demand for diamond jewelry and offers a balance between size and affordability.
The color segment is expected to grow with the highest CAGR. Colored lab-grown diamonds are gaining popularity among consumers as they offer unique hues and shades at a fraction of the cost of natural colored diamonds. The segment is expected to witness a CAGR of 12.1% over the forecast period.
Based on application, the Fashion segment is maintaining a strong foothold in the global lab grown diamond market and is expected to achieve the size of US$ 27.31 billion by 2030 from US$ 11.25 billion in 2021. The growing popularity of lab-grown diamonds in fashion jewelry, especially among millennials and Gen Z, is driving the demand in this segment. Additionally, the lower cost of lab-grown diamonds is also attracting fashion retailers and designers to incorporate them in their collections.
Asia Pacific is the leading region in the Global Lab Grown Diamond Market, accounting for the highest market share of 45.6% in 2021. The region's dominance can be attributed to the growing demand for diamond jewelry, especially in countries like China and India. The rising disposable income of consumers, coupled with changing lifestyle preferences, is driving the demand for lab-grown diamonds in the region. Furthermore, the presence of several lab-grown diamond manufacturers in Asia Pacific is also boosting the market growth.
North America and Europe are also significant markets for lab-grown diamonds. These regions are witnessing increasing awareness and acceptance of lab-grown diamonds among consumers, which is fueling the market growth. The United States and Canada are the major markets in North America, while Germany, the United Kingdom, and France are the leading markets in Europe.
The Middle East and Africa (MEA) lab grown diamond market is expected to witness significant growth over the forecast period. The increasing popularity of diamond jewelry, coupled with rising disposable income, is driving the demand for lab-grown diamonds in the region. Furthermore, several countries in the region have implemented regulations to encourage the growth of the lab-grown diamond industry.
Latin America is also expected to witness significant growth in the lab-grown diamond market. The region's market growth can be attributed to the increasing demand for diamond jewelry, especially in countries like Brazil and Mexico. Moreover, the region's growing fashion industry and rising disposable income are expected to boost the demand for lab-grown diamonds in the region.
List of Key Company Profiled:
The global lab grown diamond market is segmented based on Manufacturing Method, Size, Nature, Application, and Region.
By Manufacturing Method: