Attraction For Lab-Grown Diamonds Not Enough To Unlove Natural Diamonds, Says Tanishq's CEO Ajoy Chawla
He said India still has a lot of untapped potential, as even now only 13% of the total market is into diamond jewellery.
India is seeing a growing consumer interest towards lab-grown diamonds. However, that is not significant enough to influence demand for natural diamonds in the country, according to Tanishq Chief Executive Officer Ajoy Chawla.
According to him, the younger population and Gen Zs are much more interested in buying natural diamonds, even though there is a growing interest in affordable lab-grown diamonds.
"The truth of the ground is, we sell a large amount of (diamond) jewellery to youngsters and Gen Z, and they are buying the design, the brand. So lab-grown diamonds are not important questions, at least as of now," Chawla told NDTV Profit on the sidelines of the announcement about its long-term strategic collaboration with global diamond major De Beers Group to improve awareness and consumer interest towards natural diamonds.
According to data shared by Chawla, 99.8% of the diamond jewellery market is still concentrated towards the natural ones, and this momentum is expected to sustain further.
His view is further backed by leading global diamond company De Beer Brands' CEO, Sandrine Conseiller, who reiterated that the market for lab-grown diamonds is negligible in India.
"The penetration of diamonds in India is one out of 10, and hence LGD (lab-grown diamonds) are nowhere. So, we talk a lot about it, but growing demand means growth in buying, which is not really observed as of now," said Conseillor in an exclusive interaction with NDTV Profit.
This implies that there is still a long way for lab-grown diamonds to start influencing the diamond market.
The demand for lab-grown diamonds has been witnessing a surge, especially since the Covid-19 pandemic, and has become popular among Gen Zs and millennials. Higher affordability with similar appearance is the key reason why consumers opt for LGDs.
Both Chawla and Conseiller said that India is still obsessed with precious jewellery. They added that growing disposable income among the young customers has kept their investment habits alive. As a result, demand for valuable or precious jewellery has remained intact.
So, there will be a segment of Gen Zs opting for lab-grown, but value for precious jewellery will sustain, Chawla stated.
According to him, India still has a lot of untapped potential, as in terms of volume, even now only 13% of the total market is into diamond jewellery. This culminates in 30% of total sales for Tanishq, which according to him can grow if consumer confidence for diamonds improves in a gold-obsessed market like India.
"India's diamond market will grow very fast. It has already outpaced China in terms of growth, and that is the reason we (De Beers) wanted to have this collaboration with Tanishq," Conseiller said.
By collaborating with De Beers, Tanishq aims to improve its customer base for diamond jewellery in India by educating customers about natural diamonds.
According to Chawla, customers today are more willing to know the origin, quality, and purity of the diamond that they are wearing.
He said that Tanishq will start by imparting knowledge about diamonds among its store teams, helping them understand how they are created, how they finally take the shape of jewellery, and what is special about natural diamonds.
"Then, we will reach out to customers across geographies to educate them about natural diamonds and how to choose the right diamond for themselves, followed by marketing campaigns around the same," Chawla added.
Tanishq will also use De Beers' technology and equipment to better the supply of diamonds, followed by installing machines such as on-counter verification instruments to differentiate between lab-grown diamonds and the natural ones and identify the origin and quality of the diamonds being sold to its customers at stores.
On being asked if Tanishq is about to come up with a metre for checking the purity of diamonds, Chawla said, "You are right; the opportunity is right for that. Because we have confusion about natural and lab-made diamonds among customers, which will only increase."
He added that the new verification instrument by De Beers is suitable for this. "We will test it at our stores first, and when we are confident enough, we would want to take it at most of our stores."
