Lab Growns for the Uber-Wealthy

Lab growns are for people who can't afford natural diamonds, right?

Wrong, says Fergus James. He's a jeweler based at the Jumeirah Lake Towers, in Dubai. He has some uber-wealthy clients and he says 90 per cent of his business, by volume, is lab grown.

"We get couples who come in with a $20,000 budget, and who walk out spending $5,000 because the way they look at it is that they don't really care if it's a lab or a natural," he says.

They're just as happy if their 2.5-cts D or E diamond was grown in a couple of weeks or slow-cooked underground for a couple of billion years.

He also says some well-informed customer deliberately downgrade - requesting the lowest spec lab grown he can find, so people will think they've actually bought natural for four times the price.

James, an ex-Brit who has been selling jewelry full-time in the UAE since 2016, says his business was transformed inside a month back in 2021 after he started to offer customers a straightforward choice between lab grown and natural.

"Operating like that we flipped from about five per cent lab grown sales to 80 per cent. Seeing that flip was an unexpected eye-opener.

"Going back two or three years we never used to talk to customers about lab grown because we were scared about how they'd react, about putting a seed of doubt in their mind. We got one or two inquiries a month."

But he says that once he started offering lab and natural side by side, everything changed.

"Whether a customer wants lab or natural I don't care, that's their business. People aren't necessarily making a choice between the two, they're looking at utility," he says.

"They've got the money, it's been allocated. Whether they spend $20,000 or $5,000 doesn't really make a difference to them.

"They'll be sitting there thinking the $15,000 they'll save could pay for a vacation, or a watch or a deposit for a car.

"They're not looking at a choice between lab and natural, they're looking at being able to spend their money on something else."

The deliberate downgrade is also becoming more common, he says, although it's a challenge for him, simply because low-spec lab growns are a rarity.

"Saudi ladies who are independent and super well-educated ask me for the lowest possible lab grown spec that I can find so they can spend - and I'm making the numbers up - but let's say $20,000 instead of $200,000.

"They won't ask for a D or an E color, they'll say they want an I or an H so it looks more real, or people will assume it's real because it's not perfect."

Do customers simply want the biggest bang for their buck? "Obviously," he says, as though it's not even a question.

"We don't consider 3.0-cts to be big any more. It used to be massive. When we were just selling natural that was a big deal, but now someone can buy a 3.0-ct for $6,000 or $7,000, rather than $50,000 for an equivalent natural.

"There'll always be a place for natural diamonds but if things continue the way they are it's a 100 per cent certainty, not up for debate, that natural will become niche. I've seen it with my own eyes that customers don't care.

"People are still talking about natural and lab co-existing. If that means that lab grown are going to smash natural nine to one and you call that co-existence, then I agree with you.

"But I've never seen and industry with so many leaders who all seem to be missing the point."

Have a fabulous weekend.