Business to business trade shows such as Baselworld, JCK Las Vegas and Vicenzaoro are important business events for jewellery manufacturers. They are crucial platforms to source jewellery, boost business transactions, enhance industry knowledge and to network. Due to the COVID-19 pandemic, one by one, international trade shows started cancelling their 2020 edition.
The Gem and Jewellery Export Promotion Council of India, the premier trade body that promotes Indian gems and jewellery in the country and the world, has put its own flagship event, the India International Jewellery Show (IIJS) on hold (it was scheduled to be held in August 2020).
It will take some time for international travel to open up and perhaps even longer for 40,000 – 80,000 people to come together in one place. The jewellery industry, like all the other sectors, is restrategising its plans and goals for the year and the way business is conducted.
Focusing on the domestic sector, exploring new markets and conducting virtual trade shows to boost exports are some of the things the industry is gearing up for.
Colin Shah, Vice Chairman, GJEPC gives us the lowdown.
How will jewellery consumption in India and the world change post the lockdown? We have seen demand contractions of 20 to 25 per cent across the globe and have missed the first buying season (of the year). There is a large impact on the entire industry. To be realistic, it will be a tough two or three quarters. We are going to see a strong rise in the savings culture in India. And jewellery is the best preserver of wealth as compared to other luxury products.
Post the lockdown, people will look for authenticity, pay attention to wellness and health; they will buy less, but real, precious, and expensive jewellery. So, natural diamonds and the three classic precious gemstones – emeralds, rubies and sapphires – is where the action will be in the coming months. There would be a rise in demand for gold jewellery as well because people have postponed their marriages.
China is seeing pent-up demand for jewellery in the post-COVID-19 scenario. I think there will be a rise in demand for the first four to five months once the lockdown is lifted. As there is a restriction on travel and tourism, people would spend on purchasing jewellery.
How is the jewellery industry going to cope with the new normal once restrictions are eased? It would be crucial to take precautions to ensure that customers, staff and jewellers are safe. Use of sanitizers and masks and maintaining social distancing at showrooms, disinfecting jewellery, if tried on by a consumer, are some of the practices that jewellers will have to follow. The industry will have an SOP in place to ensure that rules are strictly followed.
Do you think jewellery sourcing will now happen via digital mediums? Most jewellery trade shows across the world are cancelled or postponed until a cure or vaccine is found. It will be difficult to hold shows because of social distancing norms and restrictions on travel. It worries us as a trade body because, ultimately, it is important for buyers to touch and feel jewellery. However, we have to find a new way to do business. Perhaps we will now have to look at holding more virtual meetings, B2B virtual trade shows, and invest in better product images because that is how most jewellers will showcase their inventory to clients
While people would prefer physical trade shows because it gives them an opportunity to meet, network and understand other people and their business, they will now have to resort to digital mediums to source jewellery. E-commerce is going to be a strong segment in the years to come
How will the pandemic impact GJEPC’s flagship trade show IIJS? At this moment, it is a wait-and-watch situation. We will take a call as the situation unfolds in the coming months. Due to international travel restrictions, jewellery shows will concentrate more on local markets for now. But the capacity of our diamond manufacturing is enormous and for that, we will need to push exports. The domestic market is large, but it consumes just 10 to 15 per cent of what we (manufacturers) produce.
How has GJEPC been using the lockdown period? We have been relying heavily on virtual communication. GJEPC is in constant touch with stakeholders and trade members through a series of webinar sessions. This has helped us in reviewing the situation, sharing knowledge, contemplating, and implementing measures to adapt to new ways of doing business.
What does the future look like for loose diamond manufacturers? The industry collectively took a decision to halt rough diamond imports for a month starting from May 15th to stabilise diamond prices and clear the inventory. This industry has come out of every crisis with resilience. This time, it will take longer to find the new normal, which could be about 20 per cent below the pre-Coronavirus level in terms of value. However, we will have to find innovative marketing strategies to engage our consumers.
How will jewellery exporters such as yourself cope with the altered reality? We are definitely looking at exploring new markets such as Latin America and East Europe.
How are jewellery and diamond firms going to navigate these times of restricted cash flow? The Indian government has taken a host of immediate relief measures for the industry to sustain and cope with the current situation such as extending the date for filing GST and Central Excise returns for March, April and May 2020 to 30th June 2020 instead of March 31, 2020. Also, companies with a turnover of less than Rs5 crore will be exempt from paying interest, late fee and penalty. Companies with more than Rs5 crore turnover will be charged interest at a reduced rate of 9 per cent. They will also be exempt from paying a late fee and penalty.
Will the cash crunch impact jewellery manufacturing and production? Yes, finance is the lifeblood of any industry. A decrease in finances in the sector will certainly affect manufacturing and production. In the meantime, it is important for jewellers to protect their capital and reduce costs as survival is critical now. My message to the industry is to stay strong, stay motivated. Good times will come.