Zudio to Expand into Lab-Grown Diamonds: A Bold Move into the Future of Jewelry

Zudio, the budget-friendly retail arm of the Tata Group, is known for its ability to disrupt markets. After dominating the fast fashion segment with its aggressive pricing and stylish offerings, Zudio is about to do it again—this time, in the jewelry market. The latest expansion sees Zudio entering the world of lab-grown diamonds with a brand called Pome, and it’s not just another sparkle in the jewelry segment; it's a move that could redefine how India sees diamonds.

The Zudio-fication of the Jewelry Market

For those unfamiliar, Zudio is part of the larger Trent Ltd., which also owns Westside. Zudio’s aggressive growth has made waves in the retail world, offering a stylish yet affordable alternative to higher-end brands. Now, with Pome making its debut in select Westside stores, Zudio is diving into the lab-grown diamond industry, an emerging market gaining global traction. Initially, Pome will offer a variety of jewelry including rings, earrings, necklaces, and bracelets, all crafted with lab-grown diamonds.

Lab-Grown Diamonds: A Sparkling Trend

Lab-grown diamonds are engineered to be nearly identical to their natural counterparts, yet come with a price tag that’s easier on the wallet—perfect for today’s value-conscious consumers. In fact, lab-grown diamonds cost only about 10% of what natural diamonds do. For instance, a 1-carat natural diamond could set you back around ₹2.5 lakh, whereas a lab-grown diamond of the same size would only cost between ₹25,000 and ₹30,000.

This price difference is one of the major factors driving the growing interest in lab-grown diamonds. With Zudio’s new venture, the brand is poised to cater to a consumer base that loves diamonds but is hesitant to pay sky-high prices.

Why Zudio’s Move is a Game-Changer

Zudio’s entry into the lab-grown diamond market is timely. The demand for lab-grown diamonds is on the rise globally, with the market expected to grow at a compound annual growth rate (CAGR) of 9.4% from 2021 to 2031. India, known for its love of all things gold and diamonds, is gradually warming up to the idea of lab-grown gems, thanks to their affordability and sustainability.

But why is this move particularly interesting? For one, it creates an intriguing dynamic within the Tata Group itself. While Pome is diving headfirst into lab-grown diamonds, Tanishq—India’s leading jewelry brand, also part of the Tata Group—has been more cautious about entering this space. Tanishq’s CEO, Ajoy Chawla, has publicly stated that while lab-grown diamonds are creating curiosity, the majority of consumers still prefer natural diamonds.

A Market Split: The Two Tata Approaches

This difference in strategy within the Tata Group raises an eyebrow. While Tanishq has opted to take a slow and steady approach, Zudio’s aggressive pricing strategy for lab-grown diamonds positions it as a disruptor in the market. By offering diamonds that are 70% to 85% cheaper than natural diamonds of comparable quality, Zudio could disrupt the jewelry space just as it did with fast fashion. This price difference allows Zudio to cater to a broader consumer base, especially the younger demographic that values both affordability and sustainability—two trends that are defining consumer behaviour in 2024.

As it stands, other major players like Kalyan Jewelers and Malabar Gold have also taken a cautious approach to lab-grown diamonds, showing a hesitance to fully commit. In contrast, companies like Senco Gold are beginning to test the waters, introducing lab-grown diamonds through pilot programs. However, with Zudio’s strong brand presence and its reputation for aggressive growth, the jewelry industry might be in for a shakeup.

The Future of Diamonds: Will Lab-Grown Gems Shine Bright?

The lab-grown diamond market is expected to reach $50 billion by 2031, making it one of the hottest segments in the jewelry industry. Consumers are increasingly conscious of sustainability, ethical sourcing, and affordability, all of which lab-grown diamonds can deliver on.

However, it remains to be seen whether Zudio’s approach with Poom will prove more successful than Tanishq’s caution. The bigger question is: will Indian consumers, long accustomed to the allure of “real” diamonds, embrace lab-grown alternatives? If Zudio’s success in fashion retail is any indicator, they just might.