Based in Hong Kong, Sanjay Kothari is the Vice Chairman of the KGK Group and spearheads the century old establishment ensuring a global presence. Dynamic and passionate, he marks the entrepreneurial enthusiasm of the family’s fourth generation in taking the venture to attain newer milestones. In 30 years of him being the driving force of the group, he has not only accelerated the growth, but has also built a meritocracy for the enhancement of the company.
The COVID-19 outbreak has wreaked havoc on India’s economy. A long list of cancelled or postponed meetings, exhibits, and weddings in the coming months has hit the jewellery business hard, as it did to many others. Markets across the industries have been witnessing the downside. Fear of the virus spreading and getting the disease has brought the country’s jewellery industry to a halt. Even when the lockdowns were eased for a brief period in between the first and second wave, merchants reported fall in footfall. Still businesses are hopeful of making up for the lost sales, once the pandemic passes and wedding season begins.
Various investment paths that were not pursued due to the industry’s reluctance have culminated in a serious currency crisis. Prior to the pandemic, companies that were prospering due to steady demand, are now severely affected. The gems and jewellery sector has been significantly impacted by the closure of physical retail outlets around the world. Also, lethargy of the sector in terms of unexplored investment avenues has resulted in a serious currency problem.
On the plus side, it gave jewellers time to think about their ideas, strategize for the future, and focus on how to make this step exciting and unique for buyers. Because starting operations in the middle of a pandemic demands a great deal of preparation and determination, and because this disease is yet to be cured, new rules and societal norms will need to be established. There will be some changes in the jewellery sector once the stores reopen. With consumers becoming more comfortable transacting online for practically any product category, including jewellery, jewellery firms who previously lacked an online presence have ramped up their efforts to establish their e-commerce platforms thereby opening doors for trade even during lockdown.
Jewellers will have to wait for the buyers to settle down for a bit before returning to their normal routine. Consumer demand is likely to decline in the coming quarter as consumers are hesitant to make large investments, at least for the next three months. Things will take at least a quarter to settle down. Until then, it’s critical to cut costs, increase sales, and raise awareness of the existing predicament. Once the lockdown will be lifted, jewellery sales will realise a dramatic shift. Sales are going to revive, with gold being the preferred choice of asset handed over at weddings. Having said that, it will take some time for jewellery sales to reinstate at par with pre-Covid levels.
Following the lockdown, impending festival and wedding seasons will surely contribute in the restoration of domestic gem and jewellery sales. Concentrating on the e-commerce sale of low-cost, high-value-added jewellery will help to generate demand along with increasing profit margins. If the curfews/restrictions are lifted, the jewellery sector must ensure that its large staff returns to work gradually, aiding the economy’s engine to resume. In order to do so, the sector would have to ensure job security and availability. Maintaining manufacturing operations over the next two to three months will be crucial, and most businesses will need to conserve cash. As a result, in addition to government initiatives, the jewellery industry should unite to help and protect the industry’s significant human resource, joining hands to resurrect the business in the post-pandemic era.
Though the slower months had a significant influence on sales, they also provided an opportunity to focus on contemporary lightweight jewels for everyday wear and gifting. Customers who still wanted to buy diamonds chose for lower-value, higher-utility items due to the disturbance in the economic cycle, which had a negative impact on profits and incomes. But this same category performs exceptionally well in the gift market. This area has gained popularity in recent years, whether it’s a gift for loved ones or for a sense of self-pampering.