Diwali brings in promise, steepens jewellery demand curve

2019 has set a benchmark in the performance of the Indian fine jewellery industry pre-pandemic. This year, jewellers are confident of a Diwali market response that can surpass the favourable conditions two years before by quiet a margin. And the national council accords the same sentiment. Colin Shah, chairman, GJEPC, “Indian jewellery industry can rise from a current US$40bn market to a US$70bn market in 5 years, if India doesn’t fall prey to another pandemic.” Even De Beers Forevermark is upbeat about the turnout for diamond jewellery shopping at this time of the year and feels that sale of their responsibly sourced, rare diamonds may exceed that of 2019.

“While the year 2020 was a big setback due to the pandemic, we see the 2021 festive season to be the strongest one in a decade and expect to perform at 25-30% higher than 2019 which was our best year,” said Sachin Jain, MD, De Beers India, said.

Bridal Diamond goes lightweight 

Ahead of Diwali, De Beers Forevermark is hopeful of a jumpstart in diamond jewellery because of two recent traits of consumer behaviour. The first one is the conspicuous rise in popularity of lightweight jewellery. The second is minimalism.  It is the path to follow when it comes to fashion and the youth are looking for awe-inspiring designs that don’t make the jewellery piece too overwhelming to carry around. Diamond jewellery has witnessed several manufacturing innovations post-pandemic, for which retail jewellers are well equipped to serve the needs of the fashion-forward customer.

Such is the lure of lightweight jewellery nowadays, that Piyush Shah, Director, K Girdharlal, Mumbai, goes as far as to say that bridal jewellery, a segment unthinkable without big, chunky pieces signifying opulence, will be soon supported by lightweight jewellery for the necessary style-up.

Gold, the strongest catalyst

On the fashion front, wearability, flexibility and versatility have been the founding pillars of the new-age customer statement. Therefore, even gold is working wonders in the lightweight segment as manufacturers have shown great innovation to suit the discerning needs of the youth today. The price ascension of gold, according to Goutham Kothari, Founder and CMD, MRK Gold, has helped keep the demand on the rise. “The gold rate has also increased a bit, which also played a key role in the increase of demand. After the Covid crisis, the confidence in the customers, as far as gold is concerned, has grown,” Kothari said, estimating this year’s Diwali jewellery sale to increase by about 25-30% than that in 2019.

Serving pent-up demand

Another reason is the pent-up demand for jewellery purchase, which spreads across different verticals such as gold, diamond, polki, jadau, and platinum. The consumer sentiment has improved dramatically in the recent past and there is pent-up demand and consumers are seeking meaningful purchases.

According to Rahul Soni, Co-Owner, Mohanlal Narayan Das Jewellers, Bikaner, the previous Diwali went below expectations because of Covid restrictions, which impaired end-customers from buying jewellery as they do during festive times. “That demand has built up and we expect at least three times more jewellery sale in this Diwali as compared to 2019,” Soni maintained.

Infection dip saves market

The most important reason behind the positive market sentiment is the government’s ability to control the alarming rate of Covid-19 infection. Simply put, people are now habituated with masks everywhere outside their residences and are braving public places after getting vaccinated duly.

Jewellers such as Pramod Jain from SSVAR and Khushboo Ranawat from Swarnshilp have high hopes in the market turnout because of the customer’s strong faith in retail sector due to the success of vaccination drives. When asked what is his expectation on Diwali sales, Sanjay Sanghi, MD, Sanghi Jewellers, Hyderabad, said the pent-up demand is posing challenges before manufacturers to send deliveries on time. “In spite of increasing manufacturing capacities, we are struggling to cater to the immensely high demand from the retailers. We are expecting at least a 60-70% increase in jewellery sales during Diwali as compared to 2019.”

Abhishek Gilara, Director, Rambhajos, Jaipur, also believes that containment of Covid infections is the reason why there is such positivity in the market. “All sectors are doing well because of a dip in the Covid infection rates. We see a 50% rise in sales during Diwali as compared to the last year,” Gilara said.

Mitesh Gajera, Owner, Laxmi Diamonds, Mumbai, said that festive demands in jewellery have beaten expectations, proving industry apprehension of the second Covid wave fallout wrong. He attributes it majorly to the manufacturing support retailers are getting now. “Given the way our retailers are preparing for it, the infrastructure and support which we have created, this Diwali should be a very good one for our retail partners and of course, it has been great for us as well. We do anticipate this season to be very strong,” he said.

Wedding jewellery market thrives

Finally, festivity overlaps with the wedding season in India. Therefore, a lot of festive season buying also includes purchases for the upcoming wedding season at the end of the year. Chetan Kumar Mehta, CMD, Laxmi Diamonds, Bengaluru, believes that this is the reason why there is a handsome share of heavyweight jewellery in terms of customer demand now. “We are expecting a good demand for wedding jewellery during Diwali, as the end- customers have already started buying jewellery for the upcoming weddings,” said Praveen Agrawal, Partner, Geeta Shyam Jewellers, Jaipur.

Jewellery in India has had that innate bonding with the culture here, for which the dormant demand will be met as families prepare to buy new belongings such as property and jewellery in the luxury segment. On jewellery, the customer will never lose the sight of assured returns on investment, more so after the tumultuous and insecure pandemic times.

Courtesy: Retail Jeweller India News