Will Gems and Jewellery Industry Bounce Back?
Post the lockdown, how long will it take for the industry to begin seeing its golden days again? Industry veterans share their viewpoints…
‘Every cloud has a silver lining.’ As the situation eases and world regains normalcy the Indian gems and jewellery industry will recover its current losses.
“Man is hardwired as an optimist and we can safely say that Indian gems and jewellery industry will spring back into a profitable zone very soon,” says industry veteran Sankar Sen from Senco Jewellers, Kolkata. He adds, “Customers will throng jewellery stores, if prices of gold and other precious metals come down. If they stabilise at a high, this may not happen altogether. All the same, after stores reopen there will definitely be an escalation in sale.”
Online sales will see a boom
According to Ananth Padmanbhan, NAC Jewellers, Chairman GJC, “Gold purchase is rarely impulsive, especially buying for bridal jewellery. Budgets are earmarked and as the world comes back into action, like everything else, this industry too will enter a phase of boom.” Purchase of gold is customary among Indian households, before the actual buyers flock jewellery stores, they will go online and check out online buying options, as they are safer and will give them the liberty of their own time and convenience to browse through different products.
Online sales also offer buyers complete freedom to choose what they want. “Store owners should keep their online sale portals open and active, and cater to consumer demand quickly so as to retain most of their online clients,” informs Senthil Kumar from Sumangali Jewellers.
Banks and financial institutions should pitch in
In this situation banks, insurance companies and financial institutions can come together to help businesses mitigate losses. “Banks and financial institutions should offer EMI facility on purchase of gold, just as they do it for buying cars, or other white goods. It will increase the demand for gold considerably and empower the consumer to buy gold,” explains Pratap Kamath, Abaran Jewellers, Bangalore. It will be good for store owners as well. If proper documentation is maintained there is no risk in it. If gold prices come down drastically, customers will rush in to buy as much as possible. “If this doesn’t happen, there cannot be a major difference in buying pattern. Marketing strategies are often superficial, real recovery needs time,” Sankar Sen, Senco Jewellers, Kolkata.
Effective service and efficiency works best
Feels Senthil Kumar, “With good service and focused efforts we can recover our losses. It is just a matter of time.” Buyers are waiting for gems and jewellery stores to reopen, as many have postponed important life events like naming ceremonies, engagements, weddings, etc and in all of these gold gems and jewellery play an important part. “Therefore demand is there for sure, as soon as stores reopen, consumers will come forward to buy gold and diamond jewellery,” explains Kamath. We can name it as ‘revenge buying,’ however real spurt in demand will come through only if gold prices come down. “Indian middle classes wanted to buy silver, a while back when silver prices fell. Increase in demand for silver grew exponentially. For a similar trend in gold, jewellery stores will have to offer heavy discounts, or gold prices will have to come down,” explains Senthil Kumar.
Wedding season will bring a spurt in gold buying
Kamath asserts, “I envisage a decent increase in demand, once the lockdown is raised. India witnesses two distinct wedding seasons, one was now, till July and the other begins soon after Diwali. Since this one had to be forfeited. The next season will witness a boom in demand for gold. All families, those who have weddings scheduled in that season will rush to buy gold.” In support Sankar Sen says, “Many families have postponed buying gold for the wedding. Jewellery stores will have to stock up on quality bridal jewellery which will surely be in demand towards the second half of this year.”
Gold will continue to be a stable investment option
Since the past year or two, people have been looking at gold as a good investment option, even middle classes are investing in gold, so the demand for gold had increased and people were getting good returns on their investment as well. “Towards the end of this year, I feel the markets will bring back customers of gems and jewellery industry and there will be a rush to buy gold again,” says Surinderpal Singh Bir from Neelkanth jewellers, Pune. Investment in gold is sure to bring good returns. “Studying the graphs of gold prices, anyone can deduce that prices are increasing, this offers the promise of good returns for any investor,” he informs.
Though for gems and jewellery industry to recover the losses will take time,” opines Pratap Kamath from Abaran jewellers, Bangalore. In India since the past three to four years there has been a consistent rise in demand for gold coins and gold bars, so the same trend will continue after things come back to normal. “We have to maintain a positive frame of mind,” he feels.
Innovative marketing strategies will attract customers
Gold purchase is an ongoing trend, every family in India, regardless of social stature buys at least some gold. “Innovative marketing strategies can pull customers and get them to buy gold,” opines Singh.
According to Senthil Kumar, effective marketing strategies make the buyer feel important and assure him or her, that the store owner is concerned about the buyer’s interest as well. “This assurance usually works best to get buyers to actually come and purchase jewellery,” Senthil Kumar adds.
On the other hand, Sankar Sen believes that in reality sales will pick up with time and lower gold prices. Marketing strategies are often superficial when it comes to actual improvement in sales figures. “They can offer short term lure for customers, after a crisis like this one. We need time to help the business pick up holistically,” Sen feels.
All in all, the silver lining to these dark clouds is the promise that gems and jewellery market will pick up, once situation improves and the industry will flourish as before.