Jewellery has been an integral part of Indian retail and this role has remained unchanged for decades. According to the IBEF, India’s gold and diamond trade generated 7.5 percent of the GDP and 14 percent of the total goods exports in January 2021. By 2022, the gem and jewellery industry is expected to employ 8.23 million people, up from 5 million in 2020. While the pandemic succeeded in transforming the face of every industry, including gold and jewellery, in the preceding year. The transition, on the other hand, was far from unpleasant. In terms of the industry, this signalled the start of a new age. A more customer-centric and user-friendly era has arrived.
Based on insights, let’s take a closer look at the trends that are driving the jewellery industry in 2021.
Shift towards e-commerce
Purchasing gold jewellery has always been a lengthy process. It involved making actual trips to jewellery stores or having jewellers come to your house, as well as hours of selection and testing. The jewellery was worn to verify for comfort, intricacy, weight, quality, and other factors once the choices were made. In many ways, it was akin to a big occasion. This is no longer the case as the advent of online shopping has changed the rules of the game.
A smooth, efficient, and easy purchasing experience is preferred by the new-age customer. People are beginning to make far more expensive purchases online than they were even a few years ago. There’s no need to go to a store to get the ideal piece with sleek and simple designs. A growing number of customers are finding it easier to purchase jewellery online and 3D try-ons; the use of technologies like AR/VR are making online shopping even more hassle-free and trustworthy. According to McKinsey & Company, Asia’s share of the online jewellery industry is expected to double by 2020, from 6% to 12%. By 2025, online sales are anticipated to account for around 18% of all sales, bringing the total value to $79 billion every year.
It is no longer business as usual in India’s jewellery segment, and retailers are starting to realize the enormous opportunity that exists for them in the online space.
Customs duty reduction
The Union Budget for 2021-22 had some favourable moves to offer a much needed boost to India’s jewellery industry. The customs duty precious metals that incudes gold has been reduced in the budget. The drop is from 12.5 percent to 7.5 percent, and it is expected to lower retail costs while also increasing jewellery exports and reducing smuggling. This move offers a much-needed impetus to the jewellery industry, especially for those retailers who are moving online towards international markets.
Better liquidity will come from more investment in banks, infrastructure, and agriculture, leading to increased consumer spending in the jewellery sector. According to IBEF, India exported diamonds and jewellery worth USD 3.37 billion in April 2021, compared to USD 36.11 million in April 2020.
Focus on ethics
It has become increasingly important for the jewellery industry to be ethically transparent. This is especially true among millennials who choose firms and items with a conscience. Millennials want to know about the origins of a particular piece of jewellery, the story behind it, and whether people, the environment, or animals were harmed in its making.
On the international front, DeBeers is utilising the blockchain to track diamond production, and IBM has deployed blockchain technology to validate the jewellery supply chain. Both are exciting discoveries, but they are still in their infancy. Precious metals and gems supplier Hoover and Strong has focused on introducing Fairmined gold and silver, which offers both traceability and positive social impact. Recycled gold and jewels may appeal to customers who can’t get past the environmental consequences of mining.
The road ahead
It’s been a while since India’s retail jewellery segment has undergone such a drastic change. This change also presents an opportunity for Indian jewellery manufacturers to focus on innovation to create lightweight and ethical jewellery that can appeal to modern consumers.