Coronavirus impact: From wedding delays to no Akshaya Tritiya sales, jewelry industry counts its woes

During this time of the year, jewelry stores are packed with customers thanks to Akshaya Tritiya, an occasion when Indians spend on buying gold, silver or diamonds.

However, due to the lockdown in India, a step taken because of escalating coronavirus cases, Akshaya Tritiya is a lost opportunity.

“After weddings were washed away due to coronavirus and lockdown, Akshaya Tritiya is another major lost event. We see bumper sales in Akshaya Tritiya. There is huge demand for small items in diamond jewelry in the range of Rs 5,000 to Rs 50,000. But this opportunity is not going to come back. Unlike weddings, this can’t be postponed,” Saurabh Khandelwal, owner of Delhi-based Dhanvi Diamonds, told Moneycontrol.

However, Sachin Jain, President, Forevermark India, is optimistic and expects May to be a decent month in terms of business for jewelry industry “due the ripple effect of Akshaya Tritiya”.

But Khandelwal thinks that even after the lockdown when the business resumes, things will not be better as June-July is a lean period for the jewelry industry.

“Sales will only happen before Diwali so by October we will see normalcy in business. One quarter is washed and next quarter will be gone to rev up the credit cycle, demand and production,” he said.

Before Akshaya Tritiya, jewelry industry lost business due to wedding cancellations.

“As of now, we are seeing hundred percent cancellation of marriage bookings and there are no new orders. All our previous orders have been canceled and some are on hold. All marriage clients are saying they will be only able to replace the order once this situation is over and most of them have postponed their marriages to November-December,” said Bhuvan Goel, founder, SKA Diamonds.

While jewelry stores have lost two of the most important opportunities, owners are hopeful business to comeback in the second half of the year. However, Khandelwal pointed out that same is not the case for the manufacturing segment.

“The real problem is on the manufacturing side. Factories survive on daily production. But now they are sitting idle and until and unless there is production, they are unable to earn money and are finding it difficult to pay their workforce,” he said.

“Plus, many karigars have left for their hometown and will not be coming back soon. Also, restrictions might continue even after the lockdown is lifted in places like Delhi, Mumbai, Surat which are manufacturing hubs. So, we don’t know how soon business can resume even after the lockdown,” he added.

He further said for six months, the industry is badly hit. “The credit cycle is hit. Also, jewelry is no priority for consumers. So, this demand would be in the last phase. Export is badly hit and for next six months I don’t expect exports to pick up.”

Amid all the woes the jewelry industry is facing due COVID-19, Jain remains positive as he thinks that demand for jewelry will see a spike whenever the situation settles.

“Take Japan’s example,” he said. “When the Tsunami happened, the country was under lockdown for four months. But when they opened, people came back with a bang to buy diamonds. The relationship of consumers with jewelry is that people buy jewelry as an asset to the family,” he said.

But like every other service industry, even jewelry stores will have to work on bringing consumer confidence back.

“We will have to give a lot of comfort to the consumers to bring back normalcy and it is a journey, it will take time,” said Jain.

Goel thinks post the lockdown it will be better to focus on online sales but that too in lower price category.