Concern over pricey lab-grown diamonds

The Sun

24-04-2025

AMPANG: Once reserved for costume jewellery and non-premium markets, synthetic gemstones are now making their way into mainstream jewellery stores, raising concerns among industry players.
Habib Group executive chairman Datuk Seri Meer Habib said the damage to the reputation of natural diamonds is not due to the emergence of lab-grown alternatives per se, but stems from profit-driven jewellers who sell them at unjustifiably inflated amounts, often without proper disclosure of its origin.
'For example, a natural diamond worth RM10,000 might be compared with a lab-grown gem priced at RM3,000. But that
lab-grown stone may be vastly overpriced relative to its actual cost.
'It's not the synthetic diamonds that are the problem, it's the lack of honest disclosure that's hurting the industry.'
Meer said with higher profit margins on lab-grown diamonds, some jewellers have started promoting them more aggressively, often without giving customers the full picture.
He said unlike certified natural diamonds, which follow transparent pricing guidelines based on standard characteristics, lab-grown diamonds are often marked up extensively.
Meer said this pricing ambiguity has led to widespread confusion, particularly overseas, where markets in places like Singapore, Europe and the US saw a surge in lab-grown gem sales.
He highlighted that the influx of synthetic diamonds into the global market has also triggered a sharp decline in natural diamond prices, falling by as much as 40%.
'Fortunately, prices have recently begun to recover, a sign that the market may be stabilising as consumers become more aware of the differences between lab-grown and natural stones.
'In contrast, Malaysia's major jewellers, like Habib, have largely refrained from retailing
lab-grown diamonds, maintaining a commitment to authenticity,' he said.
Meer emphasised that there is nothing wrong with choosing a lab-grown diamond if it suits one's budget or preference, but it should not be priced like a natural diamond as it does not cost nearly as much to produce.
He added that the average consumer would not be able to tell the difference between a natural and lab-grown diamond by sight alone, which is why transparency is critical.
'What's different now, is that synthetic diamonds are being sold as premium products, often at inflated prices. How can something created in a few days be valued the same as one formed over millions of years?
'At Habib, we have stringent quality control processes. Every single diamond that comes in is tested in our lab before being offered to customers. We use advanced equipment to analyse formation patterns and other properties to ensure authenticity,' he said.
Meer added that diamonds have long been associated with meaningful life milestones such as engagements, weddings and anniversaries, and once customers experience the emotional and symbolic value of natural diamonds, they often return for future purchases.
However, he said the Covid-19 pandemic has led to a significant decline in global diamond demand.
'With fewer orders, many diamond-cutting facilities, especially those with a large workforce have turned to cutting synthetic or lab-grown diamonds.
'These man-made diamonds are chemically identical to natural ones, composed of pure carbon. But they're produced in a laboratory over a few days, unlike natural diamonds which form under the Earth's surface over millions of years.'
Meer said Malaysians, particularly frequent buyers, are well-versed in the fundamentals of diamond quality – the 4Cs (cut, colour, clarity, and carat weight) and are, in fact, more savvy than consumers in many Western countries.
He said demand for diamond jewellery remains strong in Malaysia, especially in the Klang Valley, Penang, Johor and tourist hotspots such as Kota Kinabalu and Alor Setar, where sales are boosted by international visitors from China, Korea and Indonesia.
'Habib has adapted to changing tastes by offering modern touches such as alphabet pendants and charm pieces.
'Diamonds may not offer quick investment returns, but they are a reliable long-term hedge against inflation, retaining value better than cash over time,' Meer said.