Easing of Social Distancing Restrictions, Industry Promotion and Innovation Support Platinum Jewellery Market on Path of Recovery
PGI Platinum Moment 2020 Collection (China)
(2 September, 2020) Hong Kong – Despite a challenging start to the year, Platinum Guild International (PGI) reports positive signs of recovery in platinum jewellery markets in Q2. The pandemic accelerated the need for change across an industry that has been slow to evolve, however current metal prices continue to position platinum favourably giving industry partners time to mobilise and innovate. The latest Platinum Jewellery Business Review (PJBR) Q2 2020 indicates that industry players are seeing demand for platinum jewellery gradually return and growing interests of consumers in new designs and collections.
“The report shows that markets are starting to recover in mainland China and consumers may be willing to spend on jewellery post-COVID-19. With the restrictions on travelling and spending on experiences, this gives platinum jewellery an opportunity to gain a larger share of discretionary purchase if manufacturers and retailers continue to prioritise new collections and design directions to meet changing consumer needs for meaning and value,” says Huw Daniel, Chief Executive Officer of PGI.
In Q2, the gross domestic product grew, showing an impressive post-COVID-19 recovery. The decline of jewellery sales eased after lockdown measures were lifted in most cities and industry partners started reporting a platinum recovery driven by competitive pricing and the launch of new products which utilise innovative new technologies and designs that engage a new generation of consumers. PGI’s initiatives in China to engage with both the jewellery trade and consumers were proven extremely effective in accelerating recovery during post-COVID-19 with a +1% year-on-year growth in platinum jewellery fabrication.
The gross domestic product had the worst fall in modern history caused by the sudden halt of economic activities. Jewellers were struggling in the first half of Q2, but business started to recover in June after lockdown measures were eased.
However, retailers have had to accelerate their omnichannel experience for their customers in order for their business to survive and for long-term success. One of the consequences of the pandemic is consolidation, weaker stores will close, but the remaining retailers will be stronger, better managed businesses. While it will be a challenging road ahead until an effective COVID-19 vaccine is introduced, there could be a strong rebound in Q4 with the industry benefiting from a strong bridal season if the pandemic remains under control.
Despite overall weak jewellery sales in Japan, platinum was the best performer, supported by competitive prices of high-end jewellery and bridal demand. Seen as a metal that retains its value, sales of platinum jewellery in some contemporary chains picked up in June despite no tourists, non-store sales were taking share from overall jewellery sales during the national lockdown and the “New Me, Platinum” TV shopping initiative targeting affluent, mature consumers achieved encouraging sales in spite of the pandemic.
Store traffic and consumer demand dropped significantly as most of the jewellery business were closed in the majority of Q2. However, the PJBR reveals that once business resumes, platinum jewellery is likely to benefit from retailers’ focus on high margin categories and conversion of gold customers to optimise return.
As consumers around the world are putting more importance on family and meaningful moments in their lives, PGI is focusing on initiatives involving digital marketing and sales conversion that focus on creating meaning in order to capture discretionary spending. “In an unexpected turn of events, the high price of gold has made platinum more attractive for jewellers. We see partners seizing this opportunity through restocking and increasing platinum fabrication to launch meaningful collections. However, jewellers also need support by upgrading omnichannel strategies to better meet the consumers desire to see products inside the store while continuing to engage customers proactively through digital channels to enhance consumer identification and conversion,” says Zhenzhen Liu, Director of Global Corporate Marketing, PGI.
To download the report, please visit here.