De Beers’ move into synthetic diamonds
De Beers company, the diamond pioneer that has operated mines from the Arctic to South Africa, which has convinced the world that “a diamond is forever” and strongly believed that only mined diamonds are real and rare, is now getting into the lab-created diamond business. (Better Diamond Initiative, 2018)
Lab-created or synthetic diamonds have essentially the same chemical composition, crystal structure, optical, and physical properties of diamonds found in nature but they are man-made with the use of advanced technology. Comparing to the natural diamonds, they can achieve the highest purity at a lower cost and they are considered more sustainable, given the shorter supply chains and smaller carbon footprints. Synthetic diamonds have long been used for industrial purposes but now they are entering into the jewellery market.
When the synthetic diamond success started to pose threats to natural diamonds industries, De Beers took part to the “Real Is Rare” campaign to combat the promotion of synthetic stones as alternatives to mined diamonds led by the Diamond Producers Association Campaign. The company said it would never sell lab-grown diamonds in the jewellery market since only mined diamonds are real and valuable for consumers. (White, 2018; Paton and Friedman, 2018).
What happened later? From fighting synthetic diamonds, the Beers Company has pivoted to enter lab-grown diamond gem market. In May 2018, it launched its “Lightbox” line through its subsidiary Element Six, which specifically produces synthetics. The factory will start producing 500,000 rough carats at full capacity by 2020. (Better Diamond Initiative, 2018)
Through its aggressive pricing and sharp marketing, De Beers clearly aims to be a dominant player in this growing market, while simultaneously protecting its core business. The company is not trying to replace the natural diamond production with the synthetic diamond one; rather it is presenting the two as different products with different values. The Lightbox line is indeed aiming at “shining a light on the lab-grown diamond industry”, being “lighter on the consumers pocket” and addressing “lighter moods and lighter moments”. (Lightbox website). The natural diamonds, on the other hand, are a true product of the Earth and deserve to be given only at life’s greatest moments. Despite the decision to enter in the lab-grown market, the natural diamond production will remain De Beers’ biggest business. (Paton and Friedman, 2018)
The words of De Beers Chief executive, Bruce Cleaver, and the general manager of Lightbox, Steve Coe, are explicative in this sense.
“Having done our research, we see a massive opportunity to enter into the fashion jewelry market now by doing something that consumers tell us that they want but that no one else has done yet: synthetic stones in new and fun colors, with lots of sparkle and at a far more accessible price point than existing lab-grown diamond offerings.” Bruce Cleaver (Paton and Friedman, 2018)
“Synthetics will never be as big as our natural business, and our investments into the space are dwarfed by those elsewhere (..) but we have a massive advantage over everyone else, given the know-how and infrastructure provided by Element Six. So it’s something we have decided to be very serious about.” Bruce Cleaver (Paton and Friedman, 2018)
“Synthetics are fun and fashionable, but they are not real diamonds (..)They aren’t rare or given at life’s great moments. Nor should they be.” Bruce Cleaver (Paton and Friedman, 2018)
“Man-made diamonds should not cost the same as natural stones, they really are totally separate businesses,” Steve Coe (Paton and Friedman, 2018)
According to them, competition will not emerge between synthetic and natural diamond production, rather between the “Lightbox” line and other synthetic brands. Will De Beers dominate the lab-grown diamond market as it did with the natural one? It is early to tell.
Written by Costanza Ghera
Better Diamond Initiative (2018, September 13). De Beers-From vowing to never sell Lab-grown diamonds to launching Lightbox. Retrieved from https://betterdiamondinitiative.org/de-beers-vowing-never-sell-lab-grown-diamonds-launching-lightbox/
Paton, E., Friedman, V. (2018, May 28). ‘Diamonds Are Forever,’ and Made by Machine. The New York Times. Retrieved from https://www.nytimes.com/2018/05/29/business/de-beers-synthetic-diamonds.html
White, G. (2018, May 31). ‘Game of Stones’: De Beers’ historic move into synthetic diamonds marks a new battlefront. The telegraph. Retrieved from https://www.telegraph.co.uk/business/2018/05/31/rise-lab-diamonds-sparks-game-stones/
Lightbox website. https://lightboxjewelry.com/pages/about-us