There are many reasons that diamonds are starting to lose their edge in the engagement ring market.
From fashion and rarity to ethics and economics, the tide is shifting against the diamond dominance. The diamond industry has seen sluggish growth in the West for the past few years.
Only the rising numbers of diamond consumers in India and China have kept the industry growing, and even these consumers may soon transition to other precious gemstones.
1. Fashions change
A century ago, it was normal to buy engagement rings without diamonds. After WWII, a concentrated marketing campaign made it seem like diamonds were the only option for the serious groom-to-be. This belief has helped to carry diamonds through fifty years of price inflation, decreasing rarity, and bad press.
The tide is now shifting. As seen in Prince William’s choice of his mother’s huge sapphire ring for Kate, it has now socially acceptable to buy engagement rings without diamonds. The diamond industry now faces much more serious competition in the engagement ring market, and may need to adjust their tactics accordingly.
Diamonds are not particularly rare, even compared to other precious gemstones like alexandrite and beryl. Additionally artificial diamonds can be produced with flawless quality and at a low price. This has led to a bizarre situation where flawed natural diamonds that barely sparkle are held at a higher value than brilliant, but artificial, stones.
More serious, and pragmatic, gem buyers are now flocking to more unique gemstones in the hopes that these will keep their value.
The diamond industry has received its share of bad press, both warranted and unwarranted. Warranted because diamond resellers are notorious for buying stones without looking into the stones’ origins; unwarranted because ethical diamond companies are common, especially in Canada. Nonetheless, many people associate the diamond industry as a whole with violence, while generally giving other precious gemstones a pass.
Diamonds are still prohibitively expensive. Ring-appropriate diamonds of high clarity can cost up to twenty thousand dollars, more than many middle-class people pay for their entire weddings. Very cheap diamonds, smaller than a carat, can still cost as much as some vacations. In this economy, it seems foolish to pay that much, especially when one can buy a clear 1-carat sapphire for less. People do like to buy luxuries, even when times are tight, but it’s becoming harder and harder for diamonds to stack up to some of the other luxuries out there.
We’re not the only ones seeing the gemstone industry shifting. Companies and investors are flocking to new gemstone developments. Even better, new advances in geology have allowed companies to locate new gemstone deposits. The additional money and methods in gemstone mining have led to better products for a lower price that are more than capable of competing with diamonds.