A customer is looking at jewelry products at the ALOD store, a jewelry brand specializing in lab-grown diamonds, located in Hyundai Department Store Trade Center Store. [Courtesy of ALOD]
A spate of South Korean laboratory-grown jewelry brands launched this year are gaining traction among high-end consumers at department stores, resulting in strong sales.
Lab-grown diamonds are diamonds grown in a laboratory environment, replicating the natural conditions under which diamonds are formed.
According to Korea Diamond Trades Co. (KDT) on Sunday, ALOD, a jewelry brand specializing in lab-grown diamonds, achieved average monthly sales of 110 million won ($84,181) from its store that opened at Hyundai Department Store in Samseong-dong, southern Seoul, in March.
Strong sales were attributed to the department store’s VIP customers, the brand said. ALOD held private classes dedicated to them.
“The main customer base of our store mainly consists of those in their late 30s to late 50s,” said an ALOD official. “Customers who have experience purchasing diamonds are showing interest in lab-grown diamonds as they are reasonably priced and diverse in design.
Lab-grown diamonds are physically, chemically, and optically identical to natural diamonds. They can only be identified with high-end precision equipment. Prices, however, are 30~40 percent lower than natural diamonds.
On a per-carat basis, lab-grown diamonds cost as little as one-fifth the price of natural diamonds. ALOD‘s diamond rings, for example, are priced around 3 million won for a 1-carat size and 6 million won for a 2-carat size.
Commercially available 1-carat natural diamond rings range in price from 6 million to 10 million won, depending on the design.
Furthermore, lab-grown diamonds are considered environmentally friendly as they prevent pollution and are not involved in unethical practices associated with natural diamond mining.
There are concerns, however, about preserving the value of lab-grown diamonds because they are generally not easy to repurchase.
ALOD addresses this concern by offering to repurchase their lab-grown diamonds under certain conditions, ensuring their residual value.
“If a customer who purchased a lab-grown diamond from us later wishes to buy a natural diamond of the same grade and size, we guarantee 100 percent of the price excluding value-added tax,” said an ALOD official.
ALOD plans to expand its presence by opening stores at major department stores in Seoul and surrounding areas.
The company plans to open a store at Lotte Department Store at AVENUEL in Jamsil, southern Seoul, later this year. It will also open a pop-up store at Shinsegae Department Store in Myeongdong, central Seoul, for 10 days in October.
According to diamond analyst Paul Zimnisky, the global lab-grown diamond market was estimated to be worth about $12 billion last year. In addition, U.S. market research firm Allied Market Research has projected that the market will grow to $49.9 billion by 2030.
In December 2021, KDT, which operates ALOD, successfully produced lab-grown diamonds for jewelry in collaboration with the team of Professor Song Oh-sung of the University of Seoul’s department of materials science and engineering.
This year, the company is preparing to establish a diamond polishing plant in India, with a possible launch as early as the second half of this year or in the first half of next year.
E-Land Group, which launched its lab-grown jewelry brand, The Grace London, in May, has been hosting invitation-only events for VIP customers at department stores, introducing products and customizing them according to customer requests.
In late June, the company invited 20 VIP customers in their 50s and 60s to the Lotte Department Store in Nowon District in northern Seoul where the company explained lab-grown diamonds and the brand concept, resulting in sales of 35 million won within two hours.
“It was the largest sales event we have held for VIPs at all Lotte Department Store locations this year,“ said an official from The Grace London. ”Many customers bought gifts for their daughters-in-law and children, and we could feel that there is still demand for larger-sized diamonds in the jewelry market.“
The company said that demand was high for 1-2 carat diamond rings, with some customers returning to purchase a two-carat diamond. The Grace London’s 1-carat diamond rings are priced at 4~5 million won.
The Grace London, which topped 100 million won in sales in June, plans to open a store at Lotte Department Store in Myeong-dong, central Seoul, on September September 15 and in Jamsil in February next year.
”In the fourth quarter of this year, we are considering opening stores at six other locations, including Lotte Department Store in Suwon and we have also received a request to open a store at AK Plaza,“ said an official from The Grace London.
E-Land originally operated budget jewelry brands such as OST, LLOYD, and LATEM. However, facing deteriorating financial performance during Covid-19 and a growing preference for high-end jewelry, the company went through an overhaul and discontinued some brands such as LATEM.
Instead, the company launched The Grace London to capitalize on the growth of luxury gifts and premium product categories.
The brand‘s 33,100-square-meter production facility is capable of producing 12,000 carats worth of lab-grown diamonds per month.
By Chung Seul-gi and Yoon Yeon-hae
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