In New York, a stretch of 47th Street is known as the Diamond District for the countless gem shops and appraisers that occupy just about every storefront and office. Some 40 blocks south, Pandora recently brought to life a competing vision for how stones are made, bought and sold.

During New York Fashion Week, the jewellery retailer shut down Astor Place to host a splashy party it dubbed the “lab-grown diamond district,” attended by fashion insiders and stars like Pamela Anderson, the face of the brand’s latest campaign.

Pandora was never a big player in the diamond category. It built its jewellery brand – one of the world’s biggest with nearly $4 billion in revenue last year – on charm bracelets that sell for under $100. But the surging popularity of lab-grown stones, which are structurally identical to mined diamonds but sell for a fraction of the price, has opened the doors for even low-cost brands to offer serious bling.

The company isn’t the only one seeing big sales from this category: Lab-grown diamond brand Brilliant Earth saw a 15.7 percent net sales increase in 2022, to $440 million. Dorsey, another exclusively lab-grown jewellery brand, sold over a million stones last year.

Brands like these are changing how the jewellery business works: jewellery typically falls into certain categories based on the types of materials used and the prices charged. Diamonds were the ultimate luxury signifier, their trade dominated by small, bespoke businesses or big brands like Tiffany and Cartier.

Lab-grown stones have erased some of those distinctions. First developed in the 1980s, they are produced by exposing pure carbon to a large amount of heat and pressure in a metal cube, eventually creating a diamond. They are virtually indistinguishable from the traditional kind; realising this, the diamond industry has invested in marketing designed to create two categories of stones in the minds of consumers.

Those efforts haven’t worked, at least not for the most price-conscious consumers: a Tiffany tennis bracelet runs north of $20,000, while a bracelet containing similar, lab-grown carats from Brilliant Earth is $3,450.

According to jewellery industry analyst Paul Zimnisky, sales of these man-made diamonds have increased from under $1 billion in 2016 to just under $12 billion in 2022. They represent just over 17 percent of the overall diamond market, according to diamond research firm Edahn Golan. The rate of growth is accelerating: lab-grown sales shot up 38 percent from 2021 to 2022.

The rapid rise of lab-grown stones is reverberating across the market. Pandora has raised its sales outlook twice this year, and its share price has more than doubled in the past year. Meanwhile, De Beers is cutting prices of mined stones by as much as 40 percent due to falling demand for traditional diamonds.

“For most people, a diamond is a diamond, and what you want is the wonderful sparkle and the beauty and the meaning that you can put into a diamond,” said Mary Carmen Gasco-Buisson, chief marketing officer at Pandora.

Broadening the Market

Many consumers plough the savings from buying a lab-grown diamond into more jewellery – a bigger engagement ring, for instance. The technology has brought more shoppers into the jewellery market to buy pieces for themselves, rather than simply waiting for their partners to do so, said Dorsey founder Megan Strachan.

To reach those shoppers, brands are adjusting their marketing approach. While diamonds have always been marketed as a luxury, those ads have often been geared towards men who are buying jewellery for their partners. Now that there’s a more affordable option, jewellers are marketing to a broader set of customers, particularly women buying jewellery as fashion items.

“The lab grown diamond is not in competition with mined diamonds, it’s a complement to mined diamonds,” said Sayed Haider, COO, merchandising and operations at jewellery brand Diamond Nexus, which added a line of lab-grown diamonds to its assortment earlier this year. “You have a beautiful engagement ring, but you want to get a matching set of earrings or a pendant … you can get all those aspirational pieces that you always wanted.”

What’s Selling Now

Though lab-grown engagement rings are growing in popularity, non-bridal jewellery is where many brands are seeing the most growth.

Dorsey is focussed on selling items like tennis necklaces and bracelets and vintage-inspired earrings. Strachan said the decision stemmed from a feeling that there was a bigger gap to fill in everyday jewellery. As well, she added, it allows for customers to become repeat purchasers, whereas “bridal is a single purchase.”

“Every time I went into a jewellery store in the past, I always felt like I couldn’t afford it,” she said. “[Lab-grown] is democratising something that was essentially reserved for the wealthy.”

Dorsey, which was founded in 2019, saw its sales grow 600 percent from 2021 to 2022, and is on track to double sales again this year. It’s profitable, buoyed by word-of-mouth marketing, particularly among influencers who are finding and talking about the product on their own.

Marketing around man-made diamonds often performs double duty, both selling the individual item and countering the idea that greater accessibility equates with subpar quality. Dorsey photographs its products in editorial-like spreads that would look at home in the pages of Vogue, marketing the jewellery like fashion, said Strachan. The brand’s Instagram feed is filled with sleek images of well-dressed women, including Bella Hadid and Suki Waterhouse, wearing its signature Riviere necklaces.

“The same way that we choose our shoes, we choose our jewellery, and I felt like that’s been missed [in marketing],” said Strachan.

Pandora’s fall campaign highlighted the accessibility aspect of lab-grown stones with its tagline, “Diamonds for All,” but its fashion week event, and the hiring of stars like Anderson and model Precious Lee, shows how it too is repositioning its brand. Earlier this month, the brand unveiled a partnership with the British Fashion Council and will serve as a sponsor of The Fashion Awards in December.

Changing Attitudes

Legacy jewellery brands have been slow to embrace their new competition. Even when De Beers, the world’s largest diamond producer and distributor, started to dip into the space with Lightbox in 2018, chief executive Bruce Cleaver positioned the sub-brand as “affordable fashion jewellery that may not be forever, but is perfect for right now,” in a statement. Read: Not for engagement rings, the lifeblood of the mined diamond industry.

Today, more high-end companies are beginning to inch into the lab-grown market. This month, LVMH-owned jeweller Fred has been showing a new assortment featuring man-made stones, to test the product with wealthy shoppers. To differentiate from their mined offering, the new assortment of diamonds are blue.

It’s become a trend they can’t ignore: According to Zimnisky, sales of lab-grown stones are likely to continue growing at an annual double-digit percentage rate in the next few years.

“What started as a scepticism, or a question of if it will be an embarrassment, now carries a sense of pride,” said Amish Shah, the founder of lab-grown jewellery brand J’evar. “It’s the diamond of the future.”