Zaveri Bazaar is back to business with slow demand and no workforce

Zaveri Bazaar reopened last week after 75 days of lockdown and according to industry sources, after suffering a loss of 14 to 15 thousand crores. Home to over 3,000 jewellery stores and about 30,000-odd manufacturing units, this otherwise bustling market has been sluggish these days. On a typical day, over five lakh buyers come here daily, but now there is hardly any activity here. It is a different scene now at Mumbai’s iconic jewellery market.

Such has been the fear of COVID-19 and to overcome that jewellers are adopting various social distancing and safety measures with full strictness. In the initial phase, either 10 per cent of the workforce or ten people, whichever is higher, are allowed inside the offices.

Mansukh Kothari, Director, Vasupati Jewellers, a manufacturer of gold jewellery, informed that a special task force ‘Jewellers fight Corona (JFC)’ has been set up, right after the lockdown, by manufacturers and traders of the Zaveri Bazar.

JFC has undertaken the initiative to sanitise the Zaveri Bazaar area regularly. “On the reopening of the area, distribution of safety kits consisting of masks, hand sanitiser, face-shields, etc. was carried out. A sanitising machine and liquid have been made available in all the buildings here,” Mansukh informed.

Regarding the safety and security of the Zaveri Bazaar, the JFC team has spoken to the police authorities and requested them to increase the patrolling. “The CCTVs, around 32 cameras that had conked off during the lockdown, were repaired. But only 32 cameras are not enough for Zaveri Bazaar.

So, the JFC team is in the process of setting a big network of 200 high-resolution cameras with a dedicated control room,” he added. Besides regulating the people and companies to abide by the Corona safety norms, it is also a step towards safeguarding the inventory which regularly moves within the market.

Demand starts Tricking in

Given that safety measures are in place, the businesses are ready for buyers, but if the first few days’ businesses are anything to go by, the picture does not look very hopeful. The effects of lockdown have started showing up.

Primarily, the orders before the lockdown are being fulfilled, revealed Vishal Jain, the Director of Shah Vanaji Kesaji & Co. “No fresh orders are coming in, as retailers are facing a liquidity crunch and there is not much demand from consumers,” he added.  The same is the case with Vasant Birawat, the Managing Director, Chain N Chains Jewels Ltd. But he believes that even though many jewellery shops and offices have opened in the Zaveri Bazaar area, “Due to restriction on the movement of public transportation, buyers are unable to travel.” 

Shineshilpi Jewellers Pvt. Ltd. had an encouraging start after reopening. Pramod Mehta, the Director of the company, has received lots of new enquiries mostly from retailers based in tier-2 and tier-3 cities and has secured few deals over video calls. “The initial feedback, which we have received from the retailers based in tier-2 and tier- 3 cities indicates that customers are buying jewellery and the sales have been reasonably good. It is almost 30 and 50 per cent of daily averages sales in the pre-lockdown days. And that is good news for the industry,” he shared.

“There is no demand from the North but Southern markets which have been open for almost a month now are currently doing business at 60-70 per cent of their regular sales,” confirms Mansukh of Vasupati Jewellers. ‘Fear of diminishing supply in the coming months is also partly triggering the demand at this stage,” he adds.

According to Birawat, “At the moment the threat of Coronavirus is ripe, people will be scared to come out of their homes. Plus, June-July is always a lean month as far as demand is concerned.” Besides, at the moment, the retailers can fulfil the demand with their existing inventory believes Kothari.

Slow demand, slower supply

Approximately 70,000-80,000 karigars are working in and around the Zaveri Bazaar, who belong to the large unorganised sector. Due to the Corona scare, most of them have already left the city. There is only about 10 per cent of workers in the city. “These workers are not sufficient to start back production. The entire ecosystem is missing. In handcrafted jewellery one needs karigras with varied skills, which is not the case at the moment,” informs Mansukh.

However, he is quick to accept that there is no dire need for these workers at the moment. “There is very little demand at the moment. Towards the end of this month, there will be a need for only about 30- 40 per cent of the workforce. And if and when the demand situation improves the workforce need will gradually build,” assesses Kothari.

“Besides, many factories are still closed due to several government rules and regulations,” says Prithviraj Kothari the Managing Director of Riddi Siddhi Bullions Ltd. and also the President of India Bullion & Jewellers Association (IBJA).

According to Kumar Jain, Vice President, Mumbai Jewellers Association, “Our major workforce is from Kolkata, and they have already left. The existing ones are asking for increased per day allowance, and we have no option but to accept their demands,” he filled in.  Mansukh agrees that the increased cost of labour will have to be passed on to retailers as gold manufacturers already operate on a very thin margin.

Few manufacturers who are receiving orders are already bearing the brunt of the labour shortage. “Due to the unavailability of the artisans, we are unable to manufacture new and fresh designs. We are trying to call them back, but I don’t think that they will come before July. Moreover, there is no public transportation on the roads plus, people are still scared to step out.” He believes manufacturing will remain restricted until Sept 2020.

Labour welfare measures for now and ever

At the peak of the crisis when the majority of the workforce was in Zaveri Bazar, the manufacturers in association with IBJA took great care of their workers. Mansukh updated that on the 5th of April, JFC organised a karigar relief camp in Zaveri Bazaar with Bengali Swarn Kalyan Sangh. The Foundation, along with all the trade associations of Zaveri Bazaar, collected emergency funds. They distributed 175 tonns of dry rations for almost 45 to 50 days and also provided medical help to the COVID-19 positive karigars.

Another significant work done so far by the Foundation is towards getting the material back in their safe custody. “On the 9th of May, the JFC took special one-day permission from the local administration for the movement of raw materials which were lying in the homes of goldsmiths and artisans. It needed tremendous coordination to mobilise the workforce on one single day during the lockdown period and make it happen within the safety clauses outlined by the government authorities,” informs Mansukh.

The team is also working on various initiatives for the rehabilitation of karigars, such as how to call them back, maintain social distancing inside workshops and factories, hygiene and group insurance policies for them.

To get their trust and confidence back, the JFC is in the process of setting up a permanent clinic inside Zaveri Bazaar. The clinic will empanel doctors and specialists from various streams of medicine including eye, skin, ENT etc. to provide health facilities to the artisans. With an initial set up cost of Rs 50lakhs, this facility will require an ongoing monthly expense which will be collectively borne by the manufacturers and traders in Zaveri Bazar.

It is too early to predict how sales will fare in the coming days, as the industry crawls out of this unprecedented situation. Still, even if the demand is slow, the reopening of Zaveri Bazaar is a healthy sign for the industry as it remains the nerve centre of the business and is one of the best barometers for gauging the trading sentiment in the Indian Jewellery industry.

Courtesy: Retail Jeweller India News Service.