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At the 2024 Global Gems and Jewellery Development Conference in Hainan, China, Dr. Gaetano Cavalieri, President of the World Jewellery Confederation (CIBJO), delivered a keynote address that shed light on a pressing issue within the jewelry industry.
Speaking to a packed audience on December 19, he warned that consumer confidence in jewelry has been adversely affected by divisive marketing strategies and internal competition, particularly between the natural and laboratory-grown diamond sectors.
“The items we sell do not necessarily have inherent value – such is the nature of luxury products,” Dr. Cavalieri stated. “They have perceived value, created by the brands, and through cultural and historic associations. If the consumer loses confidence in our products, then their value is discounted. Without consumer confidence, a diamond, a ruby, an emerald or an exquisite piece of jade is simply a colorful stone.”
This erosion of consumer trust, according to Dr. Cavalieri, stems largely from the rapid expansion of the laboratory-grown diamond sector and its complex coexistence with the natural diamond industry. Over the past decade, lab-grown diamonds have grown in prominence, but the past two years have seen sharp drops in production costs, leading to further challenges for the broader market.
“The challenge posed to the diamond market by the mass introduction of laboratory-grown goods has never been properly resolved,” he said, emphasizing that the issue lies not in the intrinsic qualities of either type of diamond but in the marketing approaches adopted.
Dr. Cavalieri highlighted a pivotal misstep in the sector’s early years: “The early decision to benchmark laboratory-grown diamond prices against the price of natural diamonds, which, while maybe serving the short-term interest of laboratory-grown diamond producers, proved to be a critical error over the longer term.”
He further elaborated on the economic mismatch between the two products. “It should always have been apparent that the economic principles governing a natural product, where there is always a finite production ceiling, were different to that of a manufactured product, where there is no production ceiling, and where we inevitably would see a sharp reduction in production overheads as economies of scale were reached.”
By conflating the two categories and exacerbating the divide with negative marketing tactics aimed at undermining one another, both sectors have inadvertently damaged consumer trust. “So, when decisions were made to conflate the two, and then worse, to differentiate the products by making negative marketing claims about the other, consumer confidence in both categories was undermined,” he explained.
Dr. Cavalieri concluded with a call for unity and strategic rethinking. “Both the natural diamond sector and the laboratory diamond sector need to disengage and go back to their drawing boards. Each needs to clearly brand its product in a realistic and positive way so that consumer confidence will be restored.”
Later in the day, Dr. Cavalieri also stepped in to present on pearl grading, disclosure, and sustainability standards, filling in for CIBJO Vice President Kenneth Scarratt, who was unable to attend. His insights reinforced the importance of transparency and collaboration across all sectors of the jewelry industry.
As the conference continues, stakeholders in the gems and jewelry world will be keenly analyzing the implications of Dr. Cavalieri’s message. Restoring consumer confidence in the face of growing market complexity is a challenge that requires collective effort, clear branding strategies, and a commitment to preserving the allure and trustworthiness of jewelry.
