In response to the growing inventory and price pressures in the lab-grown diamond market, China's industry has three potential pathways for maintaining competitiveness.
1. Develop Diamond Cutting and Polishing
China has a strong upstream position in lab-grown diamond production, but lags behind India in cutting and polishing capabilities. There is debate on how best to develop this segment—whether by automation or using labor from remote areas. The goal is to keep the added value of processing within China rather than outsourcing it to neighboring countries. Developing this capacity will require policy support, industrial parks, and training programs to create competitive midstream capabilities.
2. Expand Strengths in Jewelry Setting
China already excels in jewelry setting, with high-quality standards surpassing those of India. The growing demand for lab-grown diamond settings presents an opportunity to build on this strength, encourage original design, and create a competitive advantage in downstream penetration and influence. This would involve expanding capacity in the jewelry setting segment and supporting design talent to boost the industry.
3. Promote Retail Brands and Marketing
Effective marketing and branding are crucial for the downstream market's growth. Unlike natural diamonds, which have a unified marketing body, the lab-grown diamond industry suffers from fragmented and often inadequate promotion. Industry-wide cooperation is needed to create a cohesive promotional strategy that emphasizes the benefits of lab-grown diamonds, rather than just relying on individual brands or highlighting low prices on social media.
Overall, the Chinese lab-grown diamond industry must coordinate efforts across the entire value chain to gain competitiveness. By investing in cutting and polishing, expanding setting capabilities, and promoting downstream branding and marketing, China aims to become a stronger player in the global market. The development of a balanced value chain and emphasis on market demand are essential to improving supply-demand relations in the industry.