Diamond screening services have become an indispensable part of the supply chain for natural and laboratory-grown diamonds and will bounce back after the current coronavirus-fuelled lockdown ends, Chirag Soni, Director of Solitaire Gem Labs (SGL), tells Jewellery Outlook Editor David Brough.
How is the diamond detection business affected by the current lockdown?
Chirag Soni: Retailers, manufacturers, wholesalers and traders have identified the need to ensure they carry out due diligence. Hence we do not see a sharp decline in screening services once the lockdown is over. As they say, “The river will only change its course, not stop flowing.”
What steps are you taking to drive your business forward during the lockdown?
Chirag Soni: We are utilizing this opportunity to plan the future of the company and the team. Our projects related to key online services will be completed well in advance as we are able to plan and execute them in a timely manner.
We have strategically diverted our attention to prioritise R & D at the back end to come up with advanced equipment to identify laboratory-grown diamonds in jewellery.
Our detection instruments have been well received and we plan to continue offering better solutions to the industry.
Some important updates are being brought to our educational courses during this time as we see a big surge in online courses and the need for our curriculum to be served through distance education.
What will the diamond detection and laboratory-grown diamonds businesses look like after the current restrictions end?
Chirag Soni: Diamond detection is a discipline whether carried out at a lab or at your own premises using third party instruments.
As for laboratory-grown diamonds, COVID-19 could be an opportunity in the making as consumers will get more “bang for their buck”.
Historically, crises have made people more conscious of their buying patterns and have made them seek better value. Laboratory-grown diamonds can offer that as they are physically and chemically the same as natural diamonds.
Not to mention the growing awareness among Millennials and Gen-Z about sustainability, eco-friendliness and re-cyclability of products they buy.
Add to that the options they have to either buy a larger laboratory-grown diamond or save money compared to buying natural diamonds.
Our New York lab saw a steady growth in certification of laboratory-grown diamonds pre COVID-19, reflecting the increasing demand. We hope that it will retain its growth trajectory.
There are wide expectations of a global recession post-lockdown. What impact would this have on demand for natural and laboratory-grown diamond jewelry, and on the demand for diamond detection services, in your view?
Chirag Soni: As more countries impose quarantines and social distancing, the fear of contagion and income losses is increasing uncertainty around the world.
High uncertainty historically coincides with periods of lower growth and tighter financial conditions and the current level of uncertainty related to the coronavirus crisis is no exception as the economic impact is already visible in the countries most affected by the outbreak.
With a lack of retail businesses around the world, and restricted trading and manufacturing activity at key locations, global diamond demand has notably tapered in recent weeks.
Immediate consequences and subsidized purchasing power will have a drastic impact on people’s spending power, including for natural diamond jewelry.
Laboratory-grown diamonds being the cost-effective option can open up more market share sooner than expected in emerging economies.
The slowdown in diamond detection services may be very temporary and will reflect the trading quantum.
But predictions from several financial institutions point towards a faster economic recovery.