In recent years, the Lab Grown Diamond industry has rapidly risen, and traditional jewelry brands have been deployed. The Lab Grown Diamond industry is entering a stage of technological breakthroughs and rapid awareness raising. It is expected to maintain a rapid growth momentum. CICC expects that the Lab Grown diamond terminal market is expected to exceed 100 billion by 2025.(corresponding to about 35.4 billion yuan of rough factory scale), there is room for double growth compared to 2020. China is one of the world's largest Lab Grown diamond producers. The leading industry chain is expected to benefit from the rapid rise of the industry and the trend of increasing penetration rate.

The "real" diamonds "planted"
the Lab Grown Diamond industry is rapid rising:
 ① Lab Grown diamonds are basically the same in physical and chemical properties as natural diamonds: Lab Grown diamonds are artificially made crystals by simulating the growth environment of natural diamonds, and have the same appearance, chemical composition and crystal structure as natural diamonds;
②Lab Grown diamonds have been recognized by authoritative institutions: The 2020 GIA certificate officially revised the grading standards, and the grading standards of Lab Grown diamonds are the same as those of natural diamonds, which confirms the status of real diamonds of Lab Grown diamonds;
③ Lab Grown diamonds have strong fashion attributes and better cost performance: The price of Lab Grown diamonds is 30,000 yuan/ct, which is only 1/3 of natural diamonds, and the size, color and shape are more controllable, and can be customized and mass-produced to meet Fashion needs of young consumers.

 Demand exceeds supply under rapid growth, Higher added value at both ends of the industry chain
①Upstream raw material manufacturers use technology as the core barrier: In 2020, the global output of gem-grade Lab Grown diamond rough is about 7 million carats, and the CAGR in the past three years is as high as 120%. Among them, China's output accounts for about 40-50%, and basically uses HTHP technology. Mainly (mostly CVD technology overseas), the gross profit margin of upstream manufacturers exceeds 60%;
②Mid-stream diamond processors have low technical thresholds and are labor-intensive businesses: most of the diamond processors are located in India, especially in the Surat region, where the industry concentration is low, and the homogeneity competition is serious, and the gross profit margin is only about 10%;
③ Downstream diamond brands have strong brand barriers: Lab Grown Diamond jewelry is a luxury product with high emotional value. Downstream jewellers enjoy high brand premiums, and gross profit margins are generally higher than 60%.

Multiple factors catalyze the continuous high growth of the diamond industry
①Artificial cultivation technology has gradually matured, and scale advantages have emerged: large carat synthesis technology has continued to make breakthroughs. Chinese Lab Grown diamond manufacturers have mass-produced 5-10 carats of rough diamonds, and their color and clarity have reached good standards;
②Brands actively seize the beach and accelerate market education: Traditional diamond jewelry brands and independently Lab Grown diamond brands have deployed one after another. While building brand awareness through marketing, they also strengthen consumers' recognition of Lab Grown diamonds and increase consumer acceptance;
③Consumption habits are quietly changed, and diamonds are Lab Grown to enter fashion jewelry: Generation Z and other young consumer groups "please themselves" consumption rise, cultivate diamonds with high cost-effectiveness and fashion attributes, and they are easy to be loved by young people;
④Cultivation of diamonds is more environmentally friendly and conforms to the development of the times: the impact of Lab Grown Diamonds on the environment is only 1/7 of that of natural diamond mining, and can better protect the surface environment, reduce carbon emissions, and save water and energy consumption.

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