The pandemic led by Covid-19 has crippled the country’s economy and like many industries, the jewelry industry also has been hit, yet again, due to the second wave which led to partial lockdowns across states, canceled or postponed events, weddings, etc., for the next few months.
The outbreak led to huge losses given all the retail stores have been shut for weeks altogether and also due to the fear among consumers of getting infected from the virus. But like all segments, the jewelry industry too picked up, strategized on what would work currently, pivoted to stay relevant and in line with the changing consumer behavior.
The demand and sale of gold slumped to a more than two-decade low in 2020 although it bounced back in the first three months of 2021 courtesy of the drop in gold prices and a pick-up in economic activity in the country. As of January 2021, India’s gold and diamond trade contributed ~7.5 percent to India’s Gross Domestic Product (GDP) and 14 percent to India’s total merchandise exports. The gem and jewellery sector is likely to employ ~8.23 million persons by 2022, from ~5 million in 2020.
In fact, the government also declared the gems and jewelry sector as a focus area for export promotion and has undertaken various measures to promote investment and upgrade technology and skills to promote ‘Brand India’ in the international market.
According to IBEF, exports of gems and jewelry stood at US$ 25.30 billion in FY21 from US$ 3.42 billion in March 2021. US was the largest country (at 44 percent) to import gems and jewelry from India worth US$ 938.54 million in September 2020 followed by Hong Kong (~33 percent) and the UAE (~13 percent).
The pandemic is, however, changing the way Indians buy gold and gradually is taking a turn towards modern, organized retail stores. One such brand that started with five kgs of gold and a loan in 1993 in Mumbai by Rajmal Parekh, Parekh Ornaments has grown into one of the top jewelers in the city and has over 14,000 customers. Rajmal Parekh’s unique thought process of combining modern palettes of design with the help of the traditional workforce and craftsmanship helped the brand keep pace with the fast-changing architecture of the jewelry business and it evolved from one small shop into a two-story showroom in Vile Parle East, Mumbai.
In conversation with Raunak Parekh, Managing Director, Parekh Ornaments, about the brand journey, its survival strategies during the pandemic and plans, going forward...
Excerpts from the interview:-
What is the product range offered by Parekh Ornaments? What makes them special and saleable?
Raunak Parekh: Parekh Ornaments has a strong retail network of more than 14,000+ clients all over the world, and offers more than 10,000+ products under one roof. The brand makes jewellery pieces made of gold, diamonds, uncut polki, precious and semi-precious stones, silver coins and utensils. We source raw materials such as gold, pearls and coloured stones, locally as well as internationally. The manufacturing takes place at two units in Zaveri Bazaar and Vile Parle.
We are a mid-to-large-sized jeweler with a 40-year history in the space. My father and uncle have played a big part in our family business growth. The USP of our products lies in detailing and finishing, which varies from one product to another, as well as the rarity of raw materials, engineered technically and with high aesthetic value. We have jewelry that ranges from thousands and goes up to crores. We don’t repeat our products and are constantly designing new ones. We are very active on the social media platform Instagram where we interact with our consumer base and understand their needs on regular basis. We will be launching our own website very soon.
What has been the impact of Covid-19 on this segment and also the brand? What, according to you, can be the best strategy for survival now?
Raunak Parekh: Covid-19 has put the entire world on pause mode. People are scared of going out and purchase items. Footfalls are very limited. Even the jewelry that has been ordered is not getting picked up right now. Sales have definitely been affected and we are trying our best to stay in touch with our customers and provide great deals to them to reach our target sales. In November 2020, the adoption of digital distribution platforms among jewelers more than quadrupled to 55 percent from 13 percent before the pandemic, according to IBEF data.
In today’s time, it is very important to understand the needs of the customers. Being in touch with them regularly is the key here. The customer today has become tech-savvy and in order to retain him/ her, we have to understand their taste. Our plan of action in the future is actually going to be a mix of digital presence, new collection launch along with some major associations. So far, our products, on average, were priced between Rs 25,000 and Rs 40,000, with some premium designs retailing for crores of rupees. Now, we are planning to manufacture jewelry priced at around Rs 5,000 and sell it on our website.
Furthermore, the wedding season is extremely important for us. Also, this season is the perfect time for the jewelry industry to make a strong comeback. We expect nothing but the best from this season. We will soon be coming up with our bridal collection. Social media is going to be our best bet to promote our jewelry during this time (we can also look at offering some discounts to increase sales). A number of weddings have been postponed because of the pandemic, and this has given the brides enough time to purchase the jewelry for their wedding day. Overall, the average investment in a wedding might shrink, allowing customers to spend extra on the jewelry.
What are your plans for expansion in terms of retail presence and also product assortment?
Raunak Parekh: Today, everything is digitalized and customers are spoiled by choices. Consumer buying behavior is changing every minute – one particular style works now, and by the next day it is gone. So, I feel it is important to be a part of the ongoing changes and deliver the right product to the customer. It is important to have a positive attitude towards everything. Besides plans to launch our own website, we are planning on having another Parekh Ornaments brand by the end of the year. We hope to become India’s most affordable jewellery brand and create jewellery with a combination of quality and design.