Even a major industry player such as De Beers has acknowledged that lab-grown diamonds are virtually indistinguishable from natural ones. The core quality of lab-grown diamonds has advanced to the point where they are now marketed as a sustainable, high-quality alternative. De Beers has noted that their “low production cost and relative abundance” have reshaped market dynamics.

While lab-grown diamonds are a legal alternative to natural ones, luxury brands also face competition from illegal counterfeits. With the counterfeits market currently valued at $464 billion and projected to reach $1.67 trillion within five years, it remains incredibly lucrative and comfortably exceeds the total size of the authentic luxury market, which stands at $363 billion. Global luxury companies have expressed concerns about weaker consumer demand in the US and macroeconomic challenges in China. However, there is an ongoing debate about how much worth aspirational consumers attach to brand value. Hermès and Richemont, known for their portfolios of ultra-luxury brands, have demonstrated greater resilience amid broader weakness in the luxury sector. In contrast, companies such as LVMH and Burberry, whose brands are more closely associated with aspirational consumers, have faced greater challenges. Counterfeits pose a greater threat to this segment of the market, as consumers feeling the economic pinch may view the quality and price of a counterfeit as sufficient to justify not purchasing the genuine product.

High Street holds Richemont and LVMH (indirectly through ownership of Christian Dior), and we are assessing if the counterfeit threat warrants further action.

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