Titan Company has launched its first lab-grown diamonds beYon and is framing this move as a play on consumer adoption and category growth, rather than simply a price substitute.
In a concall on Wednesday, Titan's management pushed back against the idea that LGDs were already a big threat or a near‑term substitute for natural diamonds. They estimated the LGD market at under 2% of the overall diamond‑studded jewellery market, underscoring how small the segment still was in India at that point.
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The management said it would like to focus on making pricing more attractive for consumers over margins.
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"I would say it is better to err on the safer side and make it attractive to the customer and bring in more customers and expand than start looking at it as how do I optimise my profitability," said Ajay Chowla, Managing Director.
Titan Q3 Update: International Sales Zoom Nearly 80%, Domestic Business Stays UpbeatThe management also added that, they don't expect cannibalisation happening for now and beYon is going to be a bridge between aspirational customer and natural diamonds.
Importantly, they flagged two structural concerns that kept Titan from rushing in: rapidly falling prices and the risk of commoditisation. Wholesale and retail LGD prices were already dropping, and new entrants could launch at even lower price points, which could squeeze margins at the store level.
In addition, the management said the market is full of players in the affordable and diamond category space. This makes it a multipolar and multi-competitor market.
The message was clear: unless a player could create real intellectual property or differentiation, and ensure viable unit economics, LGDs risked becoming a pure price play.
Titan's management also added that it will continue to invest in natural diamonds as it aims to be a leader in both the LGD and Natural diamond.
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