Hit hard by the spread of coronavirus, jewellery sales are expected to take several years to return to pre-pandemic levels, said experts during a webinar organised by the Gems and Jewellery Export Promotion Council (GJEPC).
“Gold jewellery sales are going to see a dynamic change once the lockdown ends. Sales are going to come back, with gold being the preferred choice of asset handed over at a wedding. But, it will take several years to bring back jewellery sales to pre-Covid levels,” said Somasundaram P R, managing director, World Gold Council (India).
Jewellery sales across the country came to standstill because of the nationwide lockdown since March 25. Factories and retail and wholesale stores have remained shut for most parts of this period.
While the Union ministry of home affairs (MHA) allowed several activities in the third phase of the lockdown, jewellery units are yet to reach full manufacturing capacity. To maintain social distancing, the MHA has allowed factories to start operations with only 30 per cent staff strength. Following this, some jewellery units in Surat and Jaipur have resumed work. The Maharashtra government is yet to allow factories to function in Mumbai.
Sumasundaram cautioned that offers like zero-making charges on gold jewellery may not work going forward.
“Jewellers require to bring in more transparency like revealing the source of gold, hallmarking, and certification (despite they exist in some forms). Customers behaviour will change. Jewellery purchase through online selection will score over store pick-ups. Thus, we believe tonnage of gold sales is going to be impacted this year,” said Somasundaram.
Consumers are expected to buy gold and diamond jewellery, along with other luxury items online. “For this, brand innovation and occasional appeal are 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 discretionary products like 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 with full of romance and 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, favours consumers to buy platinum over gold.
Until a few years ago, platinum was selling at a massive premium over gold, but has reversed and the metal is now available at a huge discount.
“Our consumers are young and millennials...Jewellers need to adopt an omnichannel strategy to boost their sales going forward,” she added.