Millennial attitudes are forcing a massive change in the diamond industry
Lab-grown diamonds are growing in popularity among millennial consumers shopping for engagement rings.
These diamonds can cost 30-40% less than mined diamonds but have a very similar appearance.
These stones are created by placing a tiny fragment of a diamond (a "carbon seed") in a microwave with varying amounts of carbon-heavy gas.
Millennials are coming around to a big loophole in engagement ring shopping.
The idea of spending thousands of dollars on a diamond is becoming less appealing as lab-grown alternatives of the stone are gaining traction. These lab-grown versions can look very similar to mined diamonds and can cost around 30-40% less.
This diamond-making process dates back to 1954 but has grown in popularity in the last decade. It's still small-scale, however, as manufacturers of these diamonds, such as Pure Grown Diamonds and MiaDonna, make up a very small part of the overall market share — around 1% of the $80 billion global business for rough diamonds.
But this could be changing. According to a Morgan Stanley report cited by Forbes, lab-grown diamonds could take 7.5% of the total market share by 2020.
The stigma around buying these "alternatives" is disappearing, largely thanks to millennials' evolving shopping tastes.
In a survey of 1,000 consumers aged between 21 and 40, half of which had household incomes of $50,000 or higher, nearly 70% said they would consider buying lab-grown diamonds, according to MVI Marketing. This was a 13 percentage-point increase from the year before, when 57% said the same, Forbes reported.
RELATED: Check out the industries expected to grow in the coming years:
This is partly because the diamonds are very similar in appearance to mined diamonds. While the companies that manufacture the stones aren't allowed to refer to these are "real" diamonds — because they aren't — they aren't completely alien to the real versions.
In fact, the lab-grown stones are made from a tiny diamond fragment and have the same physical structure and chemical composition as a diamond that has been mined from the ground.
This so-called diamond "seed" is put inside a microwave plasma oven and blasted with superheated natural gases. The gas then sticks to each seed to create a plasma ball and slowly builds up the diamond. This process can take anywhere from 10 to 12 weeks.
The result is a similar-looking stone that costs less.
However, it's not just the price that is resonating well with value-hungry millennials. These diamonds also play to another one of millennials' preferences, and that is that they want to shop for socially conscious products.
"We are creating a new industry," Vishal Mehta, CEO of IIA Technologies in Singapore, which is reportedly the most prolific producer of synthetic diamonds in the world, told Bloomberg.
He added: "Consumers today really resonate with the idea of an eco-friendly and a conflict-free choice for diamonds. That's been a sticking point."
And they can sleep easy when opting for lab-grown diamonds, which have no risk of being blood diamonds.
NOW WATCH: The story behind Warren Buffett's million dollar charity lunches at Smith & Wollensky
More from Business Insider:
Target is being sued by Burberry, and it reveals one of the biggest problems facing the clothing industry
A $25,000 robot barista serves 120 cups of coffee an hour — and it is part of a growing 'robot revolution' that could kill millions of jobs
A retail CEO just hinted at why Amazon finally revealed the number of Prime members it has
SEE ALSO: This Goldman Sachs-backed startup is banking on a new attitude millennials have about weddings
