Before the pandemic outbreak sent shock waves to the world, the industries were functioning in full swing and the operations were occurring steadily. However, the epidemic changed the picture upside down and compelled governments to announce lockdown in various important markets for jewellery industry. Organically, there were orders placed for ongoing trade that were abandoned by the businesses overnight. The burning question raised by the industries is if those orders still stand or are to be considered post the lockdown.
According to the market landscape in India, the industry is divided on this issue as businesses are experiencing three months of unexpected revenue stagnation. to this, retail has been temporarily sealed during the lockdown leading to massive cancellations of orders. In Indian market, the co-dependency between suppliers and buyers results in an unfavourable situation where stock becomes inane unless there is retail footfall. By all means, it is of utmost priority for all patrons to ensure sufficient cash flow followed by access to consumer goods and daily essentials. As buying jewellery is an aspirational need, the jewellery industry has come to a complete halt nationally.
Impact on jewellery industry
From the global perspective, the most promising markets for jewellery have fallen under lockdown. The entire of Europe is under lockdown, US is partially under lockdown, Middle east and China are undergoing slow mode as the customers are not freely venturing out to retail yet. Currently, 80% of the international orders remain cancelled and only 15-20 % are being supplied. Optimistically, we expect the same pattern to prolong until the end of June and the retail to pick up pace in the next two - three months. We hope that the customers will resume their shopping by August with a feel good factor and free from paranoia of the coronavirus scare.
Taking about the weddings in India that dominates the jewellery purchasing in India, we are anticipating exponential growth in the second leg of the year. As a wishful thinking, we hope India is able to curb the spread of COVID-19 within the first half of 2020 as the customers need to be in a happy state of mind to aspire for luxury goods. The second leg of 2020 will constitute positioning back on track and the industries should be allocated time to revive itself financially and psychologically.
As jewellery industry is severely stricken by pandemic outbreak, all possible channels like miners and retailers have reached a stage of stagnancy. Talking about international tycoons, De Beers Group has suffered a whopping drop of 2 billion last year and it is unlikely they will be able to meet half of their targets by mid 2020. De Beers has adopted a softer approach towards miners considering they work on very rigid contracts. Whereas, Alrosa has not showed leniency and has restricted its orders to some extent. While every players has a different war to fight during these uncertain times, it is a common endeavour of every firm to stay afloat, maintain sales, keep the infrastructure intact and the efficiency of workforce in shape.