Shulou(Shulou.com)11/24 Report--

A diamond lasts forever.

The slogan of de Beers, the global monopoly of natural diamonds, makes diamonds a symbol of love and one of the luxuries that many people must buy when they get married.

However, the rise of nurturing diamonds is breaking the diamond myth-data show that China has become the world's largest producer of nurturing diamonds, which takes only 7-10 days and costs less than millions of years of natural diamond formation. the price is only 1/3 or even less than 1/5.

An awkward situation, however, is that China is not a major consumer of nurturing diamonds. Domestic mainstream jewelry brands are still in a testing and wait-and-see attitude towards the cultivation of diamonds.

How far is it for ordinary people to realize diamond freedom?

The rarity of natural diamonds in the global diamond market is one of the reasons why China has made diamonds in seven days.

Why do you say that? It is reported that natural diamonds are formed 100-300 kilometers underground. Under the condition of high temperature and high pressure, carbon elements are squeezed and gathered into diamonds for millions of years and brought to the surface through volcanic activity. While cultivated diamonds are artificially synthesized in the laboratory, domestic enterprises generally use high temperature and high pressure method (HPHT method), that is, the use of six-sided jacking press to simulate the growth conditions of natural diamonds to squeeze carbon atoms into diamonds.

Compared with natural diamonds that take millions or even hundreds of millions of years to form, the synthetic cycle and cost of cultivating diamonds are greatly reduced, and it takes only 7-10 days to produce them under high temperature and high pressure.

It is worth noting that cultivated diamonds are also real diamonds, and their physical and chemical properties are the same as those of natural diamonds. In terms of chemical composition, cultivated diamonds and natural diamonds are composed of carbon atoms; in physical properties, the core indexes such as hardness, refractive index and dispersion value of cultivated diamonds are the same as those of natural diamonds, but are essentially different from commonly used diamond substitutes such as zircon and Mozambican stone. The main composition of zircon is zirconium silicate, while the main component of Mo stone is silicon carbide.

According to Bain Consulting data, the global production of gem-grade cultivated diamond blanks in 2020 is about 7 million carats. In terms of regional distribution, China has the largest output, about 3 million carats, accounting for about 40%.

In China, the production capacity of cultivating diamonds is mainly concentrated in Henan. Four Henan enterprises, Zhongbing Red Arrow, Yellow River whirlwind, Power Diamond and Henan Diamond, supply more than 80% of the original stones of cultivated diamonds in China.

There are historical reasons behind China's becoming a big diamond producer.

In the 1960s, in order to get rid of the dependence on the import of synthetic diamond, Zhengzhou Sanmo Institute developed the first domestic two-sided jacking press and successfully produced China's first synthetic diamond, which established the scientific research status of the synthetic diamond industry in Henan. Driven by Zhengzhou Sanmo Institute, a large number of synthetic diamond production enterprises have emerged in Henan, and many have gone public.

At first, the synthetic diamonds produced by these enterprises were mainly used in the industrial field, and later, on the basis of related technology and equipment, they also began to enter the consumer-grade field of cultivated diamonds.

Take Power Diamond as an example, at the beginning of its establishment in 2010, it mainly produced synthetic diamond single crystals; in 2016, it began to enter the diamond market; and since 2021, the nurturing diamond business of Power Diamond has developed rapidly, achieving a revenue of 197 million yuan, an increase of 428.11% over the same period last year. The proportion of revenue reached 39.57%, making it the company's largest business. In the first half of 2022, the proportion of cultivated diamond revenue further increased to 49.60%.

It is worth noting that the gross margin for the production of cultivated diamonds is also astonishingly high.

Data show that in the first half of 2022, the gross profit margins of Power Diamond's nurturing diamond, diamond single crystal and diamond powder were 83.44%, 57.94% and 52.40% respectively, and the gross profit margin of cultivated diamond was much higher than that of other businesses.

The layout of domestic jewellers is late, and cultivating diamonds has not yet become the mainstream. Due to the short synthesis cycle, cultivated diamonds have more advantages in cost than natural diamonds.

According to Bain Consulting data, in 2021, the retail price of cultivated diamonds accounted for 30% of the price of natural diamonds, and the wholesale price of cultivated diamonds accounted for 14% of the price of natural diamonds, down from 20% in 2020. And there is room for further decline in the future.

Despite the advantages of cost and output, cultivating diamonds has not yet become the mainstream of consumption in the domestic jewelry market.

According to the data, the United States is currently the world's largest market for nurturing diamond consumption, accounting for about 80 per cent in 2019, while China accounts for only 10 per cent of nurturing diamond consumption. According to a survey, among the reasons why American consumers buy breeding diamonds, the sex price ratio accounts for the highest proportion, accounting for 62%, while the rest are moral factors (20%) and environmental factors (18%).

In recent years, because of the complex economic environment, American consumers are more willing to use cultivated diamonds as a substitute for natural diamonds. According to data recently released by Tenoris, the penetration rate of nurturing diamonds in the US engagement diamond ring has increased from 6 per cent in 2021 to 10 per cent.

From the perspective of the global market, well-known jewelry brands have also embraced the cultivation of diamonds.

Swarovski launched nurturing diamond brand Diama in 2017, diamond leader de Beers launched nurturing diamond jewelry brand Lightbox in 2018, and jewelry brand Pandora announced the full use of nurturing diamonds to produce new products in 2021.

In the domestic market, traditional jewelry brands are more cautious in cultivating diamonds, and the layout is relatively late. In 2021, Yuyuan shares, the parent company of Laomiao Gold, launched the diamond brand "LUSANT Lou Guan", and in 2022, Mancalon Jewelry established the diamond brand "Mucan OWNSHINE".

Judging from the price of these cultivated diamond products, they are indeed much cheaper than natural diamond products. On the e-commerce platform, the 1-carat diamond ring (D-color SI2 clarity) that nurtures diamond LUSANT is sold for about 10,000 yuan, while the natural diamond DR 1-carat diamond ring (J-color SI1 clarity) costs as much as 75000 yuan.

In addition, some new diamond brands have been born in China in the past two years, such as LightMark Xiaobaiguang and so on. However, on the whole, these domestic diamond brands were born relatively late, and the brand influence is still very limited, especially the sales channels are mainly online, and there are few offline store layouts that reach consumers.

How far is it from diamond freedom? In fact, the reason for the low penetration rate of domestic cultivated diamonds is, on the one hand, the limited layout of traditional jewelry brands, on the other hand, it is also related to the concept and cognition of consumers.

For traditional jewelry brands, the scarcity of natural diamonds is the main factor supporting the high price of their products. If natural diamond products and cultivated diamond products are sold in the same store at the same time, "diamonds last forever" marketing is useless.

Take the DR diamond ring as an example, it has always claimed that men can only customize one in a lifetime and give it to one person in a lifetime. If natural diamonds are replaced by cultivated diamonds on a large scale and lose their scarcity, the so-called lifetime customization of only one will become a joke.

As for consumers, when it comes to cultivating diamonds or synthetic diamonds, the first impression of many consumers is whether they are real diamonds, which is also the biggest obstacle to the popularity of diamonds in consumers.

Zou Bo, executive director of Hexing Jewelry and co-founder of Taigu Technology, said that cultivated diamonds are exactly the same in appearance and physical properties as natural diamonds. In essence, cultivated diamonds are real diamonds. However, the national awareness of cultivating diamonds has not reached the level of Europe and the United States.

He believes that as more and more domestic jewelry brands begin to lay out and cultivate diamonds, it is only a matter of time before the market acceptance increases. In his view, the main bottleneck of domestic diamond development lies in the benign integration of the supply chain, rather than the internal volume caused by mutual price war; the second is to establish a certification system for cultivating diamonds, which can not blindly believe in foreign certificates; the third is in product design, it should be liberated from the rigid rare attributes of natural diamonds and present the beauty of diamonds through excellent jewelry design.

Due to the limited popularity of cultivated diamonds, domestic nurturing diamond production enterprises are also unable to sit still.

In August this year, Power Diamond and Chao Acer Jewelry jointly set up a diamond jewelry brand to promote the domestic diamond retail market, while Yu Diamond launched its own jewelry brand Mutica earlier. However, judging from the situation of the official flagship store of Mutica JD.com, sales are obviously not satisfactory.

There is still a long way to go to cultivate the development of diamond industry in China.

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