Hit hard by the spread of the Covid-19 pandemic, jewellery sales are expected to take several years to come back to pre-Covid 19 levels, experts at a webinar organised by the Gems and Jewellery Export Promotion Council (GJEPC) said on Wednesday.
“Gold jewellery is going to see a dynamic change once the lockdown period ends. Sales are likely to come back with gold being the preferred asset choice handed over to the bride at the wedding. But, it will take several years to bring jewellery sales back to pre-Covid levels,” said Somasundaram P R, Managing Director, World Gold Council (India).
Jewellery demand across the country came to standstill due to the nationwide lockdown that started on March 25. All factories, retail and wholesale stores remained shut during this period, in order to avoid crowding and stem the spread of Covid-19.
While the Union Ministry of Home Affairs (MHA) allowed partial opening of non-essential shops in areas that hadn't been badly affected by the pandemic, jewellery manufacturing units are yet to run at full capacity. In order to maintain social distancing, the MHA has allowed factories to start operations with 30 per cent staff strength. Following this, some units started jewellery manufacturing in Surat and Jaipur. However, the Maharashtra government has not permitted factories in Mumbai to open.
Sumasundaram believes that luring offers like zero making charges on gold jewellery is not going to work going forward.
“Jewellers need to be more transparent about the source of gold, and must go for hallmarking and certification (although this does exist in some form). Customers behaviour will change. Jewellery purchase through selection of pictures will score over store sales. We believe the volume of gold sales will be impacted this year,” said Somasundaram.
The Covid-19-driven factory closure has caused job losses, and has hugely impacted the economy. It has compelled consumers to buy gold and diamond jewellery along with other luxury items online.
“For this, brand innovation and occasional appeal is required to improve jewellery sales in the post-Covid era,” said Colin Shah, vice chairman, GJEPC.
Meanwhile, there has been a dramatic shift in consumer behaviour. Spending is skewed in favour of descretionary spending on safety and survival products.
Sachin Jain, President, Forevermark India, a De Beers Group initiative said, “We will have to strengthen our supplier sources and stand with karigars and customers. Consumers' preference for diamond as an asset class and as an expression of love won’t change. This is the opportunity to connect with consumers as silence will be the biggest mistake.”
Vaishali Banerjee, Managing Director, Platinum Guild India, believes consumers will prefer platinum to gold.
Until few years ago, platinum was selling at a massive premium over gold. But that has reversed and platinum is now available at a huge discount.
“Our consumers are largely millennials, who would want the ornaments they purchase to enrich their lives. Jewellers need go adopt an omni-channel strategy to boost their sales going forward,” she added.