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De Beers’ venture into the lab-grown diamond (LGD) market through its subsidiary Lightbox backfired, undermining its century-old luxury positioning around natural diamonds, according to the African Diamond Council (ADC) Chairperson Dr. M’zée Fula Ngenge.
He told Rough & Polished in an exclusive interview that by commercialising synthetics, the company blurred the distinction between high-value natural stones and commoditised LGDs.
Dr. Ngenge said ADC surveys done post Lightbox launch showed that this led to a 23% rise in scepticism about natural diamonds’ worth.
Younger buyers, in particular, began favouring LGDs for their affordability and perceived sustainability, eroding the emotional and aspirational cachet of natural diamonds.
The collapse of LGD prices — plummeting 90% since Lightbox’s 2018 launch — further destabilised the market, rendering the segment unprofitable for De Beers.
This forced the company to exit the LGD jewellery market and refocus on its core strengths, which include natural diamond mining, geoscience AI, and blockchain-based inventory management.
Moving forward, synthetic diamonds will be relegated to industrial applications via De Beers’ subsidiary Element Six, aligning with their utilitarian value in high-tech sectors like quantum computing.
Below are excerpts from the interview.
What was the primary strategic error De Beers made with its Lightbox subsidiary?
De Beers' key mistake was entering the lab-grown diamond (LGD) market via Lightbox, which diluted its core luxury positioning around natural diamonds. By promoting synthetics, it blurred the distinction between its high-value natural stones and commoditised LGDs, undermining its brand equity. In other words, the decision to enter the lab-grown diamond (LGD) market while simultaneously promoting natural diamonds created a paradox. Historically, the diamond industry relied on controlled scarcity and emotional narratives to sustain premium pricing. By commercialising LGDs, the company imprudently destabilised its market structure, inadvertently validating synthetics as viable alternatives. This contradicted decades of marketing that positioned natural diamonds as irreplaceable symbols of permanence, directly undercutting its core business model.
How did the introduction of Lightbox affect consumer perceptions of natural diamonds?
Lightbox confused consumers, who questioned the inherent value of natural diamonds when the same company sold both. This eroded the perception of natural diamonds as rare, exclusive, and emotionally significant. The ADC surveys that were conducted post-Lightbox launch revealed a 23% increase in consumer scepticism about natural diamonds’ value proposition. We discovered that younger demographics, in particular, began associating LGDs with sustainability and affordability, while questioning the ethical and environmental claims of mined diamonds. This shift eroded the aspirational cachet of natural diamonds, as synthetics gained traction in engagement rings, which is a category traditionally dominated by natural stones.
What was the percentage decline in lab-grown diamond (LGD) prices since Lightbox’s inception, and how did this influence De Beers’ decision?
Lab-grown diamond (LGD) prices have fallen by 90% since Lightbox’s 2018 launch. The collapse made the LGD jewellery market unprofitable for De Beers, prompting its exit to protect margins and refocus on natural diamonds. Between 2018 and 2024, LGD prices collapsed from $4,000 per carat to under $200, driven by oversupply and advancements in chemical vapour deposition (CVD) technology. By 2025, synthetic diamond production capacity exceeded 20 million carats annually, far outpacing jewellery demand. This commoditisation rendered LGDs incompatible with luxury margins, forcing a strategic retreat to protect a natural diamond market still valued at $87 billion globally.
To what extent did De Beers’ dual approach to selling both natural and synthetic diamonds risk conflating their value propositions?
Selling both natural and synthetic diamonds under one brand conflated their value propositions. Natural diamonds rely on scarcity and heritage, while lab-grown diamonds (LGDs) are marketed as affordable. This duality muddied the luxury narrative for natural stones. Marketing both products under a single corporate umbrella triggered cognitive dissonance. Luxury consumers associate brands with singular identities, exclusivity or accessibility, not both. By offering synthetics at 80-90% lower prices, the company inadvertently framed natural diamonds as overpriced, weakening the psychological justification for their premium.
How did the commoditisation of lab-grown diamonds contrast with De Beers’ traditional luxury positioning?
Lab-grown diamond (LGD) commoditisation, illustrated by mass production and falling prices, clashed with De Beers’ luxury ethos, which typically hinges on exclusivity and timelessness. Cheap synthetics contradicted the aspirational allure of natural diamonds. The consumer market clearly illustrates that luxury goods thrive on artificial scarcity through limited edition pieces and controlled distribution. LGDs, however, follow a law of physics that produces an observation and projection of a historical trend, which produces style-priced-performance curves, where we see production costs dropping 50% every 3–4 years. This deflationary model clashes with the diamond industry’s inflationary pricing, which depends on 2–3% annual price hikes to maintain perceived value.
What areas will De Beers now focus on after closing Lightbox, and why are these considered its competitive strengths?
De Beers will prioritise natural diamond mining, inventory management, industry encroachment and consumer hypnosis, which are areas where its expertise, infrastructure, and brand legacy give it a competitive edge. These align with its core identity and high-margin business model. Post-exit, resources are funnelled into blockchain systems that take the industry from paper to digital, geoscience AI for the discovery of new kimberlite deposits, and campaigns emphasising natural diamonds’ geological rarity. These leverage proprietary mining data, reproduced exploration tech, and a century of gemmological expertise that assets competitors have difficulty replicating or outperforming.
What is the future role of synthetic diamonds within De Beers’ operations?
Synthetics will shift to industrial/high-tech applications via subsidiary Element Six, which is a company specialised in providing synthetic diamond, cubic boron nitride and other super hard materials for industrial use. This reflects their utilitarian value in technology, avoiding conflict with natural diamonds’ motional and luxury appeal. In essence, synthetics shall wisely pivot to industrial applications, such as high-purity LGDs for quantum computing as qubit substrates, next-gen semiconductors, and laser optics. The global market for industrial diamonds is projected to grow at 7.5% CAGR through 2030, driven by tech sector demand, a higher-margin, less brand-sensitive arena than jewellery.
How did De Beers’ involvement in the lab-grown diamond market create confusion among consumers?
De Beer’s involvement in LGDs legitimised synthetics as jewellery alternatives, leading consumers to doubt natural diamonds’ uniqueness. The lack of clear differentiation sowed uncertainty about their premium value. The ADC reports that 66% of LGD buyers were under the impression that synthetics were “eco-friendly natural diamonds,” conflating pseudo terms like “lab-created” and “sustainable.” This semantic blurring, exacerbated by lax industry labelling standards, diluted the unique selling points of both categories.
Why is narrative control particularly important for heritage brands like De Beers in maintaining premium pricing?
Heritage brands like De Beers depend on storytelling that fosters rarity, heritage and emotion to justify premium pricing. Mixed messaging weakens this narrative, risking consumer scepticism and price erosion. Iconic or Legacy brands, as they are often referred to, command price premiums by anchoring products in intangible value, highlighting history, artistry and exclusivity. When synthetic and natural diamonds were marketed by the same entity, it reframed diamonds as industrial commodities, rather than cultural artefacts. Competitors like artisanal coloured gemstones or vintage jewellery capitalised on this narrative vacuum, exposing De Beers' corporate inadequacies.
What broader lesson does the Lightbox case offer to other luxury brands considering ventures into disruptive or commoditised markets?
The episode underscores the “innovator’s dilemma” in luxury: disruptive technologies often democratize products but destroy margin structures. Brands must segment markets rigidly through separate subsidiaries and distinct branding, especially if engaging with disruptors. Failure to compartmentalise risks contagion, where low-tier products degrade the halo effect of high-tier offerings. The Lightbox case underscores the danger of ventures misaligned with core brand identity. Luxury brands must prioritise strategic discipline, avoiding trends that commoditise their offerings or dilute their equity. Innovation should reinforce, without ever undermining what makes the brand irreplaceable. De Beers’ stumble underscores the ADC cardinal rule that scarcity cannot be manufactured, only curated. While synthetic diamonds thrive in tech, their role in jewellery remains a Faustian bargain for heritage brands. As Element Six’s industrial revenue soars, De Beers’ retreat to its natural diamond roots is less a defeat than a strategic renaissance, a return to the billion-year stories that machines cannot ever replicate.
Mathew Nyaungwa, Editor-In-Chief, Rough & Polished
