Virtual IIJS to see at least 50% of normal business

In the backdrop of the upcoming virtual India International Jewellery Show (IIJS), Colin Shah, Chairman, GJEPC, shares his expectations from the event with Samit Bhatta of The Retail Jeweller, and highlights the steps the Council is taking to bring back the positive sentiment to the industry.

 Samit Bhatta (SM): What, in your opinion, will be the significance of the virtual IIJS for the players of the gems and jewellery industry, both retailers and manufacturers?

Colin Shah (CS): The pandemic  hit India in March, and for the first three months, we, at the Council, and everyone in the world, hoped that a vaccine would be ready soon, the lockdown would be lifted, and we would  be able to host the physical IIJS. It was only by the end of May that it became clear that it would not be possible to host the physical edition of the event, and even if we did manage to have it, it would have to be postponed to the end of the year. So, we decided to host it towards the end of 2020. But  a couple of months back, we realised that even if we have the event late,  there is no escaping the fact that COVID is here to stay, the vaccine will not be ready any time soon, and business will need more time to go back to normal. At this point, we decided to opt for a virtual format.

Luckily, for us, Shailesh Sangani, and his whole team at the Council, had been looking for a solution very aggressively right from April. We scouted every IT company in Hyderabad, Bengaluru, Chennai, Mumbai and Gurugram, and we even checked out several solutions globally, especially companies which had done , Hong Kong, and other shows. Finally, we zeroed in on a solution which we think is the ideal one. We have the requisite tech know-how —  video camera facilities, internet bandwidth, IT expertise of our manufacturers and retailers, etc. Taking IIJS to the virtual world is a simple solution which will help our manufacturers and buyers to connect after many months. It will give them an opportunity to transact business. Of course, we understand that the scale and volume of business will not be equal to what can be achieved physically, but still, we really feel confident that at least 40%-50% business should be transacted, based on the current demand.

SB: In view of the pandemic, what are your recommendations to the Government to increase exports, and  help in furthering ease of doing business in the country?

CS: One of the key focal areas that the new Council members are now focussing on is the ease of doing business, because post-COVID, the government does not have the fiscal strength to give benefits to the industry in terms of reduction on duty, tariffs, taxes, and so forth. As it is,  our industry has some typical challenges when it comes to doing business. For starters, we  do not really have an executable e-commerce policy. Although it is there in some form, we don’t have the requisite infrastructure in place that could specifically help a manufacturer anywhere in India to sell on any platform globally. We are not able to collect payments on credit cards, we are not able to ship within 24-48 hours, we don’t have the Indian Post, which is geared up for taking precious cargo, the Customs-related paperwork is overwhelming, and the transaction cost is too high.

We are in the midst of discussions with the Government for bringing down the transaction cost and speeding up the movement of goods from India to other countries. Once these issues are resolved, we will be able to participate in the new economy, which is e-commerce-based to a very large extent. A few years back, e-commerce accounted for 3% to 5% of the global gems and jewellery trade, it then increased to 10% to 15% in the past 12-18 months, and estimates suggest it will reach 20% to 25% very soon. It will be a pity if Indian manufacturers are not able to take part in this exciting opportunity.

Secondly, we have been working passionately on the gold monetisation policy, which will help unlock tons and tons of old gold lying in the country that could be put to productive use. It will help the nation at large to reduce the trade deficit. In the long run, it might even help us to reduce the high import duty on gold. So far, the scheme that is in place does not really take care of the jeweller in any sense. If the Government accepts our recommendations, both jewellers and consumers will benefit, and the government will be able to save foreign exchange, as 200 to 250 tons of gold will be unlocked.

Apart from enabling e-commerce and monetising gold, we are also looking into the issues faced by the diamond industry, such as the turnover tax, roughs that are selling in special notified zones and SEZs, and so forth. The SEZ policy was made many years back. The sunset clause has already set in, and there are no more benefits left. So, if we seriously want foreigners to come and invest in the Make in India dream, if we want to make sure the Indian manufacturers stay in India and do not move operations to countries such as Thailand, China and Vietnam, then the SEZ policy needs a reboot. We have had several rounds of discussions with the Government on this, and we are hopeful that in the next two quarters, we will have a new SEZ policy in place.

Besides, we have taken on several small projects, such as  reducing paperwork related to Customs, making the input credit process of GST easy, simplifying the sending of goods abroad for exhibitions, etc. We are taking up all issues that impact industry players, and are working towards making things easier for them.

SB: The US has made a strong recovery in the midst of the pandemic, and this is good news for our jewellery industry. How would you assess financial year 2020-2021 in terms of exports?

CS: Before last year, our exports hovered around $ 39 billion to $ 40 billion. Last year was tough, and before the pandemic, we ended 2019 at $ 35 billion, which was 10% down. The first half of 2020  saw various lockdowns that impacted everything, including exports. The positive news now is that China and the US are making a recovery, and the Gulf is making a comeback, slowly, but surely. We expect the second half of the year to be much stronger than the first half. But yes, business will be 25% down, compared to the previous year.

SB: What is your message for Indian retailers and traders, who are expected to participate in large numbers in the virtual IIJS?

CS: Considering that it is a new format, there is likely to be some amount of reluctance on the part of the buyers to actually buy and place orders. In the few virtual formats where the Council has done buyer-seller meets, some buyers were hesitant, some were on the fence, while some were ready to take the plunge and buy. We want buyers to come from China, Korea, Thailand, Vietnam, and so forth. Trade is already happening – business to the tune of millions of dollars has been transacted, where our manufacturers actually got hard purchase orders, they shipped goods, got their payments, and everybody was happy. So what I would say to our retailers is that we all have gone through a difficult time on the health front in the past six months, and many families have been affected by the virus. On the business front, shops have been shut down, factories have been in lockdown. At this time, what the industry needs is a little bit of positivity and optimism. There are still consumers out there who love jewellery and want to buy it for weddings. Considering travel is down, it is up to us to get that share of the consumers’ wallet back to our industry.

So, the message would be that the retailers should come and place orders and that’s what the manufacturers need. They need to get business, and get their factories going. Workers have also suffered, and have gone back to their hometowns. Some have started coming back, so, in the end, the only solution is business. I would say let’s go and take that risk, and even though it’s online and they can’t touch and feel the product, they can still participate, they can still place orders, they can still transact business. Manufacturers are not going anywhere; they are going to be right here, running their business. A few quarters down the line, if retailers are not happy for any reason, they can always work things out with the manufacturers. This really is the time to go out and show some optimism and positivity. So, we are hoping that people will come and conduct some serious business.

SB: The pandemic is not going to go away any time soon. GJEPC had lots of plans. You were working on a B2C festival with the Indian government under the Make in India programme. How do you see all this panning out, and what kind of activities do you see the Council take up in the next two to three years?

CS: As a trade body, we intend to continue the good work we have been doing in the past 50 years.  We are going to work towards creating more demand. Moreover, we will be working closely with the Natural Diamond Council for diamond promotion. Besides, we will be associating with the World Gold Council, Forevermark, and other bodies linked to our industry in order to bring back the excitement for jewellery in consumers. One of our key goals this year is to conduct the shopping festival. The correct timing for this was before the physical IIJS, but that could not happen. However, we will definitely do it in the next couple of quarters, as soon as things start going back to normal.

The shopping festival should create a lot of excitement in the cities in which we conduct it. It will be along the lines of the Dubai Shopping Festival and the Singapore Shopping Festival. We will split the events into various parts, the virtual buyer-seller meet will continue, and probably we will be doing more of those on the export and domestic front. The physical IIJS will definitely come back next year in a nicer avatar. We will be coming up with retail films like last year for Dhanteras and Diwali. Considering the positive response we got last year, we will be working with more retailers. The films will be translated into regional languages as well. We will have stuff like why gold, and even diamonds, make for good investment.

In a way, the pandemic has been a blessing in disguise for gold, as we are seeing all-time high prices. We will be doing lots of promotional activity, and even as we work towards creating demand on the ground, we will be making more effort to promote digitisation. We are doing webinars with bloggers on how to use the social media better, and are even paying attention to things such as how to photograph a piece of jewellery in the best possible manner. In short, we are working on various fronts and doing whatever is possible to improve the digital experience of both manufacturers and retailers.

Courtesy: Retail Jeweller India News Service